A Look into the Effect of COVID-19 on BC’s Economy

Central 1 Credit Union

Without a doubt, the COVID-19 pandemic has strongly affected the economies of nearly every country and region in the world. Despite the many challenges imposed on BC by this pandemic, its economy has fared considerably well.

British Columbia’s economy has always been quite unique compared to the other provinces and territories of Canada. Due to its geographical and geological traits, as well as its unique flora, the province’s economy heavily relies upon its agriculture and manufacturing sectors. These sectors have not been affected significantly from the pandemic. The reduced human interactions in their operations were minimal compared to other sectors, reducing the amount of restrictions they were subjected to. However, other sectors, such as the film industry, which plays an important role within the economy, have been greatly affected by the COVID-19 pandemic.

Over the years, BC has become a hot spot for the film industry, informally referred to as Hollywood North. In 2019 alone, a year prior to the start of the pandemic, BC’s film industry grew to a record-high $4.9 billion in valuation. This growth and success stopped abruptly with the start of the pandemic, which forced all film and television production to cease operations in March of 2020. By October of 2020, operations were allowed to continue, recovering most damage done to this sector of the economy by 2021. In fact, by December of 2020, over 60 projects were being filmed in BC—even busier than operations prior to the March shutdowns.

The service sector has not been as fortunate. Like the film industry, the service sector suffered the most starting in late March of 2020. Between February and April of 2020, over 350,000 jobs had been lost across the province with the unemployment rate rising drastically from 4.3 per cent to 11.5%. Additionally, nearly half the respondents of a survey conducted by the BC Chamber of Commerce, Greater Vancouver Board of Trade, and Business Council of British Columbia had reported laying off staff or reducing hours to maintain the operations of their businesses. Even with the reopening of many services such as movie theaters and dine-in with the inclusion of a vaccine passport, the service sector is very much struggling.

Other sectors, specifically the real estate sector, remained virtually unaffected by the pandemic. With BC’s real estate sector being one of the most expensive in the world, many expected it to recess along with the rest of the economy. However, contrary to these expectations, the real estate sector continued to grow, as evidenced by data from the BC Real Estate Association. In 2020, more homes were being sold at a higher price. The number of homes sold jumped to 94,000, a 21.5 per cent increase from 2019. The average price also rose to $782,000, a 11.7 per cent jump from 2019. This sector has remained unaffected by the pandemic, and has continued showing signs of growth into 2021.

While the COVID-19 pandemic has affected sectors very differently, BC’s economy was negatively affected as a whole. With the province’s economy being made up of so many unique sectors, the damage caused by the COVID-19 pandemic was minimized and is being steadily repaired.