From Resource Works

Where the money comes from isn’t hard to see – if you look at the facts

In British Columbia, the economy is sometimes discussed through the lens of a “new economy” focused on urbanization, high-tech innovation, and creative industries. However, this perspective frequently overlooks the foundational role that the province’s natural resource industries play in generating the income that fuels public services, infrastructure, and daily life.

The Economic Reality

British Columbia’s economy is highly urbanized, with 85% of the population living in urban areas as of the 2021 Census, concentrated primarily in the Lower Mainland and the Capital Regional District.
These metropolitan regions contribute significantly to economic activity, particularly in population-serving sectors like retail, healthcare, and education. However, much of the province’s income—what we call the “first dollar”—originates in the non-metropolitan resource regions.

Natural resources remain the backbone of British Columbia’s economy. Industries such as forestry, mining, energy, and agriculture generate export revenue that flows into the provincial economy, supporting urban and rural communities alike. These sectors are not only vital for direct employment but also underpin metropolitan economic activities through the export income they generate.

They also pay taxes, fees, royalties, and more to governments, thus supporting public services and programs.

Exports: The Tap Filling the Economic Bathtub

The analogy of a bathtub aptly describes the provincial economy:

• Exports are the water entering the tub, representing income from goods and services sold outside the province.
• Imports are the water draining out, as money leaves the province to purchase external goods and services.
• The population-serving sector circulates water within the tub, but it depends entirely on the level of water maintained by exports.

In British Columbia, international exports have historically played a critical role. In 2022, the province exported $56 billion worth of goods internationally, led by forestry products, energy, and minerals. While metropolitan areas may handle the logistics and administration of these exports, the resources themselves—and the wealth they generate—are predominantly extracted and processed in rural and resource-rich regions.

Metropolitan Contributions and Limitations

Although metropolitan regions like Vancouver and Victoria are often seen as economic powerhouses, they are not self-sustaining engines of growth. These cities rely heavily on income generated by resource exports, which enable the public services and infrastructure that support urban living. Without the wealth generated in resource regions, the urban economy would struggle to maintain its standard of living.

For instance, while tech and creative industries are growing in prominence, they remain a smaller fraction of the provincial economy compared to traditional resource industries. The resource sectors accounted for nearly 9% of provincial GDP in 2022, while the tech sector contributed approximately 7%.

Moreover, resource exports are critical for maintaining a positive trade balance, ensuring that the “economic bathtub” remains full.

A Call for Balanced Economic Policy

Policymakers and urban leaders must recognize the disproportionate contribution of British Columbia’s resource regions to the provincial economy. While urban areas drive innovation and service-based activities, these rely on the income generated by resource exports. Efforts to increase taxation or regulatory burdens on resource industries risk undermining the very foundation of provincial prosperity.

Furthermore, metropolitan regions should actively support resource-based industries through partnerships, infrastructure development, and advocacy. A balanced economic strategy—rooted in both urban and resource region contributions—is essential to ensure long-term sustainability and equitable growth across British Columbia.

At least B.C. Premier David Eby has begun to promise that “a new responsible, sustainable development of natural resources will be a core focus of our government,” and has told resource leaders that “Our government will work with you to eliminate unnecessary red tape and bureaucratic processes.” Those leaders await the results.

Conclusion

British Columbia’s prosperity is deeply interconnected, with urban centres and resource regions playing complementary roles. However, the evidence is clear: the resource sectors, particularly in the northern half of the province, remain the primary engines of economic growth. Acknowledging and supporting these industries is not only fair but also critical to sustaining the provincial economy and the public services that benefit all British Columbians.

Sources:

1. Statistics Canada: Census 2021 Population and Dwelling Counts.
2. BC Stats: Economic Accounts and Export Data (2022).
3. Natural Resources Canada: Forestry, Mining, and Energy Sector Reports.
4. Trade Data Online: Government of Canada Export and Import Statistics.

From the Fraser Institute

By Jock Finlayson

Late last year, Statistics Canada reported that Canada’s population reached 41.5 million in October, up 177,000 from July 2024. Over the preceding 12 months, the population rose at a 2.3 per cent pace, indicating some deceleration from previous quarters. International migration accounts for virtually 100 per cent of the population gain. This includes a mix of permanent immigrants and large numbers of “non-permanent residents” (NPRs) most of whom are here on time-limited work or student visas.

The recent easing of population growth mainly reflects a slowdown in non-permanent immigration, after a period of increases with little apparent oversight or control by government officials. The dramatic jump in NPRs played a key role in pushing Canada’s population growth rate to near record levels in 2023 and the first half of 2024.

Amid this demographic surge, a public and political backlash developed, due to concerns that Canada’s skyrocketing population has aggravated the housing affordability and supply crisis and put significant pressure on government services and infrastructure. In addition, the softening labour market has been unable to create enough jobs to employ the torrent of newcomers, leading to a steadily higher unemployment rate over the last year.

In response, the Trudeau government belatedly announced a revised “immigration plan” intended to scale back inflows. Permanent immigration is being trimmed from 500,000 a year to less than 400,000. At the same time, the number of work and study visas will be substantially reduced. Ottawa also pledges to speed the departure of temporary immigrants whose visas have expired or will soon.

Remarkably, NPRs now comprise 7.3 per cent of the country’s population, a far higher share than in the past. The government has promised to bring this down to 5 per cent by 2027, which equates to arranging for some two million NPRs to depart when their visas expire. There are doubts that our creaking immigration and border protection machinery can deliver on these commitments. Many NPRs with expired visas may seek to stay. That said, the total number of newcomers landing in Canada is set to drop significantly.

According to the government, this will cause the country’s total population to shrink in 2025-2026, something that has rarely happened before.

Even if Ottawa falls short of hitting its revised immigration goals, a period of much lower population growth lies ahead. However, this will pose its own economic challenges. A fast-expanding population has been the dominant factor keeping Canada’s economy afloat over the last few years, as productivity—the other source of long-term economic growth—has stagnated and business investment has remained sluggish. It’s also important to recognize that per-person GDP—a broad measure of living standards—has been declining as economic growth has lagged behind Canada’s rapid population growth. Now, as the government curbs permanent immigrant numbers and sharply reduces the pool of NPRs, this impetus to economic growth will suddenly diminish.

However, Canada will continue to have high levels of immigration compared to peer jurisdictions. The lowered targets for permanent immigration—395,000 in 2025, followed by 380,000 and 365,000 in the following two years—are still above pre-pandemic benchmarks. This underscores the continued importance of immigration to Canada’s economic and political future.

Instead of obsessing about near-term targets, policymakers should think about how to ensure that immigration can advance Canada’s prosperity and provide benefits to both the existing population and those who come here.