HOW NELSON, B.C. (POP., 10,500) IS BENEFITTING FROM CORPORATE COVID MIGRATION.

NELSON (POP. 10,500) IS ONE OF MANY SMALL CANADIAN CITIES THAT COULD BENEFIT FROM COVID CORPORATE MIGRATION

THE PAUSE IS WE CAN'T GET PEOPLE IN OFFICES EN MASSE RIGHT NOW. THE SMALL-TOWN INITIATIVE IS NOW INFLUENCING EVERYTHING ELSE.

— GREG MALPASS, FOUNDER OF CONSULTING FIRM TRACTION ON DEMAND

Greg Malpass grew up playing in the outdoors of Nelson, a small city tucked in the Kootenay region of the B.C. Interior, and a multi-hour drive to the nearest major centre. But in 1994, the future tech executive moved away for university to the Lower Mainland, where in 2007, he founded Salesforce consulting firm Traction on Demand. Over the years, the company expanded, with headquarters in Burnaby and offices in Toronto, Montreal and abroad to house much of the company's hundreds of staff.

Several years ago, well before the COVID-19 pandemic upended the corporate-office model, Malpass had a realization: that setup did not make sense. In major cities, soaring house prices and long commutes left many workers dreaming of life in a community like his hometown. Their jobs often prevented such a move.

He held the power to remove that obstacle, which he reasoned could help not only his employees, but also the Nelsons of Canada, the kind of languishing small towns for which he held a soft spot. These once-booming locations heavily depended on fledgling resource-extraction industries, and needed to pivot to prevent citizens from fleeing elsewhere in search of employment.

He decided Traction would abandon the big-office system and instead shift to smaller workspaces scattered throughout major cities like Vancouver, as well as in more remote locations. Traction's Nelson office opened in early 2019, occupying much of the historic Legion building. Already, eight Tractionites work there, a mix of locals and newcomers; the goal is to fill the space with dozens of employees in the near future, and to open two more B.C. locations for the company's so-called “small-town initiative” within the next 12 months.

There's been an undeniable shift by at least some major companies away from traditional offices thanks to COVID-19. Shopify CEO Tobi Lutke called it “digital by default.”

Traction employees just started earlier. Even before concerns around COVID compelled most employees to work from home, Malpass said, some of his staff had moved away from Vancouver or talked about doing so. “Now that we've established Nelson, the Island and Vernon are hot to follow, in terms of B.C.,” he said.

Nelson being his hometown “was part of the driver,” Malpass said as to why he chose to start there. He had watched the once-thriving community struggle during his life, and wanted to help boost it.

“There's a conversion going on in these small towns … where forestry and mining — the traditional industries — are really shrinking.”

Nelson's origin story begins with a failed quest for gold. In 1886, a group on a fruitless search stumbled upon a copper and silver deposit on Toad Mountain, just southwest of modern-day Nelson. Soon, hundreds descended into a tent city in what would become Nelson. The Silver King mine started soon after, and Nelson — named after the province's lieutenant-governor at the time, first name: Hugh — incorporated in 1897.

People built more permanent structures, and the lumber industry edged out mining as the area's economic workhorse. A sawmill opened, as did factories making wood products. Nelson thrived. Hotels, churches, stores, a hospital, a school and other amenities dotted its streets. It owned an electric utility. By the 1950s, it even boasted a university.

The early '80s, however, brought a reversal of fortunes. The local Kootenay Forest Products sawmill closed. “Our community was literally on its knees,” said John Dooley, Nelson's mayor, serving his fourth (non-consecutive) term, about the “enormous amount of job loss” at the time.

Before Dooley's first mayoral tenure began, Nelson had started to transition away from its heavy dependence on industrial operations to more diverse ways to drive its economy. Education became a focus, as did tourism, thanks to the city's quick access to bountiful ski slopes and mountain-biking routes. The city leaned into its historical charm and restored buildings to create picturesque streetscapes. Local lore tells of how that drew the eye of Hollywood's Steve Martin, who shot much of his 1987 film Roxanne in the city.

How Nelson arrived at adding technology to its economic repertoire is a bit of a chicken-and-egg story. Shaking up the economy and highlighting Nelson's appeal to outdoor enthusiasts attracted younger people in their 20s and 30s to the city, explained Dooley. “That really was a turning point for us,” he said. The young transplants included risk-taking entrepreneurs, who brought new ideas along with their skis and mountain bikes.

In the last dozen years, Dooley said, Nelson leaders honed in on the community's technological infrastructure, which needed updating. The first big move came in 2014, when the city took advantage of roadwork to install broadband fibre downtown to give businesses access to high-speed internet.

“That was the first step in the tech sector actually paying some attention to us,” Dooley said. In 2017, its broadband connectivity and other projects, such as a hackerspace with technology programs for local youth, earned it recognition from the Intelligent Community Forum. The think-tank, based in New York City, awarded it a smart-city designation that year; at a population of just over 10,500, Nelson was the smallest of the 21 communities on the list.

At the same time, multiple groups worked for years to bring a technology community hub to Nelson, and this July, the Nelson Innovation Centre (NiC) first opened. Though COVID-19 temporarily closed it, the centre partially reopened in early November. It aims to provide support and resources for local entrepreneurs and tech workers, as well as networking opportunities, said Karen Kornelsen, NiC's community and events manager and the marketing and communications manager at the Kootenay Association for Science & Technology, which manages the centre. The space will soon host Kootenay's first pitch competition, with round one planned for Nov. 12.

“There's quite a thriving tech sector here,” she said, noting Nelson is filled with digital nomads and tech companies such as Traction. Kornelsen counts herself among the area's entrepreneurs. She started her business in the nearby Slocan Valley, running it full time from her home for two years with “a really weak internet connection and no cell service.” A place like NiC, she said, could have solved those troubles.

Nelson also worked on developing its local talent pool. In September 2019, Selkirk College launched an eightmonth web-development program out of its Nelson campus to help fill tech positions in the region and beyond.

All these investments, and a commitment to growing and nurturing the tech industry, laid the groundwork to enable Malpass's plan of a hometown office. But it didn't hurt that the Kootenays appealed to much of his staff.

Traction has been asking employees if they want to relocate somewhere, and is increasingly hearing the Kootenay region in response. “That was a major — kind of — point,” said Malpass.

Will Buchanan started working for the company about two-and-a-half years ago in a small Colorado town. “I like small towns,” he said.

When he first heard Traction wanted to open a Nelson office, it piqued his curiosity. He talked to his wife, as well as his employer, over several months. The couple soon decided to move their family — a busy household with three young boys — to the Canadian city.

“We felt it was a very good fit for our family in general,” he said, listing off the draws: small town, access to the great outdoors, a vibrant tech scene.

They arrived about a year ago, and have no plans to leave in the foreseeable future, with not much to complain about so far. Both the city and the people are “nice,” he said. While the office has been closed temporarily out of concerns around COVID-19, when it's open, the commute will be a breeze.

Local real estate has its own set of issues, including low vacancy rates, but prices remain much lower than in Vancouver. In Metro Vancouver, the benchmark price for all types of residential properties in September was $1,041,300, with apartments at $683,500 and detached homes at $1,507,500, according to the Real Estate Board of Greater Vancouver. Housing prices are “not as lofty” as Vancouver, said Buchanan, and the cost of living is a lot lower. His family rents now, but would buy if they find the right home.

The access to the outdoors has been great for a family that loves to be active in nature. “I found I can be a lot more effective at work if I have true weekends where I unplug, and I'm not checking my phone, and I get out.”

Colleagues considering a similar move have started reaching out to him to ask about Nelson and rural life in general, especially as the spread of COVID-19 promises to shift the nature of office work permanently.

Not all, however, want to make Nelson home. Some favour the ocean over the mountains. Sara Dickson and her partner, who both work for Traction, knew they wanted to live in Tofino on Vancouver Island one day. But with jobs in the company's Burnaby office, they weren't sure when and how they could make that dream a reality. In September 2019, they went out on a limb and purchased a home in Tofino. They planned to rent it out while figuring out how to move there.

When the COVID-19 pandemic struck and Traction, like many other employers, sent staff home indefinitely, the duo made the leap to the Island, and now work remotely from Tofino. After work, they often jump into the car for a two-minute drive to the beach, where one surfs while the other walks their 95-pound dog. It's a great improvement over spending half an hour, on a good day, commuting each way to and from the office.

These types of moves into smaller communities are becoming increasingly common in the company, said Dickson.

Malpass estimates the company will open locations in Vernon (a city of roughly 50,000 people about 300 kilometres northeast of Vancouver) and Mill Bay (a town of just over 3,200 on the east coast of Vancouver Island, about 29 kilometres northwest of Victoria) within the next 12 months. A “very, very conservative estimate” if the company struggles to find facilities would be 18 months, he said, but it's unlikely to take that long. Each office would have about 40 people and be roughly 4,000 to 5,000 square feet.

He also sees potential for smaller offices in Alberta and Nova Scotia, as well as Ontario's Hamilton and Barrie, and outside Montreal.

One obstacle, though, is trust. As a hometown boy, Malpass had the advantage of being well known in Nelson. He's now using it as a template to alleviate concerns other communities and their leaders may feel about a big tech company moving in. Traction, after all, boasts 700 employees and eight offices worldwide.

“Where the fear and threat comes from is … you're going to do what Amazon does to you in the city,” he said. The worry is that slick newcomers may take talent away from local businesses or run up house prices.

Malpass hopes his company's investments in his hometown will help smooth the way for Traction in other smaller cities and towns. He said he tries to highlight what Traction adds to Nelson's community by hiring locals for jobs and internships, for example, or sponsoring the upcoming pitch competition. He hopes that helps establish trust with the future cities and towns in which Traction wants to build a presence.

In a way, COVID-19 has both accelerated and paused Traction's office transformation. “The pause is we can't get people in offices en masse right now,” he said. As for the acceleration? “The small-town initiative is now influencing everything else.”

Before the coronavirus, Traction contemplated moving into a 140,000-squarefoot facility around the Burnaby area. “We've completely thrown those plans away,” Malpass said.

He's now considering upwards of 16 smaller office spaces throughout the Lower Mainland, giving Vancouverites some ability to enjoy the same benefits as workers in the company's small-town initiative offices, such as shorter commutes. He has similar plans for the company's office in the Greater Toronto Area, where he said some people commute 90 minutes, making for a “completely impractical” situation. He imagines about seven or eight locations there, specifically moving north toward Barrie.

“If we need a big space for everyone to be together?” he asked, assuming it is ever safe to do again. “We'll rent it.”

COURTESY TRACTION ON DEMAND Traction on Demand's Nelson, B.C., office opened in early 2019 in the city's historic Legion building. It's the first of many smaller-scale locations planned by the technology company.