The latest regional economic data from the past few months indicates the South Island economy has been rattled by the COVID-19 pandemic, with Greater Victoria experiencing its highest unemployment rate in history.
An Economic Recovery Dashboard created by the South Island Prosperity Partnership (SIPP) and launched in May, tracks the region’s economic status during the recovery phase of COVID-19. The data, released monthly, provides snapshot of certain indicators from the last few months such as unemployment, building permits, hotel occupancy and ridership on BC Transit and BC Ferries. The dashboard provides data that is as close to real time as possible and is supposed to help the recently launched Rising Economy Taskforce track the region’s economic fallout and recovery in the months to come.
“What we’re seeing is that the pandemic is having quite a catastrophic impact on us already,” said SIPP director of economic development Dallas Gislason.
The unemployment rate for the region hit a historic high of 10.1 per cent in May while only a few months earlier in February, Greater Victoria was reporting the lowest unemployment rate in Canada at 3.2 per cent. To put it in perspective, the last time the Victoria Census Metropolitan Area’s unemployment rate peaked was after the 2008 recession at 7.4 per cent.
However, as the province enters phase three of reopening, Gislason said he is hopeful the unemployment rate will begin to decrease.
An indicator of particular concern is related to tourism and travel since Greater Victoria is so reliant on that sector.
For example, Gislason said the extremely low hotel occupancy is troubling as hotels are just breaking even or operating at a loss by staying open. The report from SIPP said hotels are also charging lower rates than normal which is affecting their bottom line.
“Hopefully, with some domestic travel, we can help those hotels stay alive,” Gislason said. “They’re major employers and taxpayers in the region which municipal governments need to rely on.”
Approvals for building permits are also down, but Gislason said that could be because processes and projects have been delayed due to the pandemic. Typically, the region approves just over $20 million for building in a month but right now that number is sitting at just under $4 million. Gislason said these numbers will be followed closely over the coming months in the hopes that investors have not lost confidence in the local economy.
A figure of note, Gislason said, is that the construction industry in Greater Victoria employs more than 15,000 people so if projects are dropping off, unemployment as well as household spending could be impacted, creating a ripple effect in the economy.
When it comes to ridership on BC Transit, Gislason said that anecdotally, numbers are starting to return as people go back to work or feel confident to use public transit. However, boarding numbers do rely on students and with classes remaining online for the University of Victoria and Camosun College in the fall, BC Transit won’t be returning to typical numbers any time soon. Gislason said.
As for BC Ferries, numbers this year will likely be driven by domestic travellers rather than tourists. Gislason said he doesn’t think the ferry corporation will hit its typical numbers for ridership either.
Despite all this, Gislason said the popularity of Greater Victoria as a place to live is likely not going to change and could even become stronger as B.C. has been one of the best in the world at managing the pandemic. If more people are attracted to the region, it could drive demand on a number of things again.
In order to recover, Gislason said businesses need to be protected from complete failure and bankruptcy, especially those that rely on tourism since the border may not open any time soon. That protection lies in the hands of the government, he said. Additionally, he said diversifying the workforce to take advantage of different opportunities will be important. This could mean moving laid off workers into different sectors such as technology, local food systems or the ocean and marine economy.
“This is a temporary hit on the economy that’s painful and frustrating,” Gislason said. “But we can weather the storm and have done well so far. We have the right ingredients in place to survive and thrive.”