Operating Context

British Columbia (BC) is Canada’s fourth-largest economy, contributing 13%, or $272 billion, to Canada’s Gross Domestic Product in 2022. However, despite a strong post-pandemic recovery, the province’s economy performed below the national average in 2023 and growth is expected to remain low into 2024, forecasted at 0.3%. This is lower than the forecasted national average (0.5%).^{Footnote 1} From 2016 to 2021, BC’s population increased by 7.6% to 5 million, mainly driven by immigration.

British Columbians across the province see their communities and livelihoods under pressure on multiple fronts: a high cost of living, resource sectors in transition, and climate-related disasters. BC is currently – and is expected to remain – Canada’s least affordable province. This is driven in part by housing costs. By the end of 2023, the average home price in BC was $967,200, 47% higher than the national average ^2.

Rural and Northern BC faces more pronounced challenges, due in part to production declines in the forestry sector and the winding down of major projects such as the Site C dam and Coastal Gaslink pipeline. Smaller communities in the North and Interior also face more persistent labour shortages, ^{Footnote 3} and have more difficulty attracting immigrants, who often prefer to settle in urban centres.

In addition, over the last three years, forest fires and other climate-related disasters have caused destruction on a massive scale across the province. This has resulted in billions of dollars in damage, including the death of over a million farm animals, decade-long damage to fruit crops, backlogs at ports, and the destruction of critical infrastructure. The 2023 wildfire season was the worst ever recorded in the province.

Despite these challenges, there are many positive signs. Business conditions have been improving, bolstered by declining cost pressures and, in some regions, an easing of labour shortages.^{Footnote 4} Further, BC has a strong economic base, with the highest proportion of services as a share of exports among Canadian provinces (30.8%). BC is also a leader in clean energy, digital technologies, and life sciences, with strengths in advanced manufacturing and critical minerals. Natural resources contributed 6.3% of provincial GDP and created opportunities in other sectors such as manufacturing. For example, in 2022, value-added natural resources accounted for over 75% of manufacturing activity in the province.^{Footnote 5}  In addition, BC’s ports are a growing service, placing the province in a strong position for increased trade, including for energy products.

While British Columbians are facing a challenging short-term outlook, BC’s economy is diverse, supported by rich natural resources, strong industrial clusters, a growing skilled immigrant population, and deep talent pools. A young and growing Indigenous population coupled with government commitments to reconciliation present opportunities to advance economic inclusion and further grow the economy.