How COVID transformed the provincial economy
Scott Jacob has worked in construction for 30 years. He's seen a few recessions. But never the kind of meteor hit that happened last March, when pandemic lockdowns and panic arrived in B.C.
The company he and his brother run, Jacob Bros Construction, had a dozen contracts for various improvements—parkades, asphalt aprons—at Vancouver International Airport. They were cancelled instantly, stopped mid-project with an urgent request that Jacob get his crews offsite as fast as he could.
The Surrey-based company's other big specialty was hotel projects. “It was cease and desist any new work immediately,” Jacob recalls. “If anyone had told me our two anchor clients would disappear in a couple of days, I would have laughed.”
Almost a year later, Jacob Bros is afloat. It has kept on its 100 salaried staff and hourly workforce of about 200. It handed out bonuses at Christmas. But that took some clawing for any hold on the cliff face. Figuring out how to keep everyone safe on worksites. Going after jobs in new areas. Bidding on little contracts that the company hadn't considered before—and even losing out on some, as more than two dozen builders fight for the smallest scraps, like half-million-dollar
On the anniversary of B.C.’S coronavirus lockdown, the pandemic has left some industries languishing while others forge ahead
suburban utilities projects.
Jacob's experience is just one illustration of the erratic and rocky times facing B.C. businesses in an economic hurricane that has wreaked havoc like no other. It's one where the usual laws of downturns didn't always apply.
Typically in a recession, consumers pull back on buying tangible things, though they keep spending on certain services. But during the pandemic, because the federal and provincial governments turned on the income-support taps and because of the way COVID-19 affected behaviour, people ditched services and blew loads of money on things: TVS, cars, bikes, camping gear,
cooking equipment, office furniture, recreational vehicles, tennis rackets, gardening tools, crafting supplies.
“The goods sector has been surprisingly resilient,” says Ken Peacock, chief economist at the Business Council of B.C. This past November, exports actually reached higher levels than a year earlier.
The construction industry that Jacob Bros is a part of has done relatively well. There have been some job losses, but B.C. never shut down construction, even partially, as some other provinces and states did. Major projects stayed on course despite the COVID shock—skytrain in Metro Vancouver, LNG in the north. Residential real estate continued to thrive, for reasons no one fully understands. Tech, forestry and agriculture all stayed strong or even did better. Film and TV production, which was halted for a while, has come back with a rigorous regime of testing.
If the province is in better economic shape than most of the country, that performance disguises the fact that some important sectors—and many lives in them—have been devastated or seriously shellacked, with no end in sight.
Two major areas sustained most of the damage. One was international tourism, which includes airports, hotels, highend wilderness resorts, and luxury shopping in Vancouver and Victoria. The second was anything that runs on crowd events, from sports to theatres to music. Restaurants, which can be dependent on both, felt the secondary shocks, as did some personal services.
Within the Lower Mainland, some restaurant groups saw suburban business pick up while their dining rooms in the central city sat nearly empty. “Our downtown core is a big concern,” says Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade.
Small businesses have struggled the most, her organization's surveys keep showing: “They don't have the capacity or the resources to make the changes needed.”
The Lower Mainland saw more job losses than elsewhere in B.C., as forestry, mining and agriculture boomed in northern and Interior cities. But in smaller Interior towns without those industries, businesses shrank or grew depending on where pandemic money got channelled and how inventive operators got.
In Ashcroft, the hardware store is doing 30 percent more business than usual, says Deb Arnott, general manager of Community Futures, the nonprofit business-development service, in that area. The town councillor who runs the local bakery worked to entice customers, selling supplies, offering online lessons, and pushing pictures of her cinnamon buns, pies and fresh eggs on a Facebook page followed by almost 1,200 people in a place with a population of 1,600. But the diners that used to depend on highway traffic are hurting.
Tourism business varied wildly. Boutique hotels and specialty restaurants in Tofino, Whistler and Penticton were jammed until a health order in November advised against non-essential travel.
But smaller, more remote operations, especially those that rely on out-of-province customers, suffered. In Lytton, Braden Fandrich's Kumsheen Rafting—which usually employs 55 people—took on only about 15 staff last year. “Having no international tourists definitely affected us,” says Fandrich, who estimates that his business was down about 65 percent overall for 2020.
Scott Jacob lost nowhere near as much, but he still thinks it's going to be a hard slog, with perhaps 40 percent less work than normal. Though he's hopeful about one thing—2021 won't be as bad as last year. “I can't tell you I'm going to miss 2020,” Jacob says. “I do not remember a year where I worked so hard for a passing grade.”
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