Highways 16 and 97 dissect British Columbia east and west — north and south. They share a similar history: first as Indigenous trade routes for thousands of years, then wagon trails and now industrial corridors.
The industrial era arrived rapidly in the decade following the Second World War. It was built around hydro and forest products, an aluminum smelter and a few mines.
A chart compiling Statistics Canada’s censuses from 1921 to 2021 charts the close correlation between population growth and local manufacturing. Also connects sharp declines in population to the demise of the forest industry.
In communities north and west of Prince George, populations began to soar by 1956. They peaked in 1996 and then fell sharply by 2006. The hardest hit were Prince Rupert (down 25 per cent), Kitimat (35 per cent), and Mackenzie (45 per cent). Communities south of Prince George have, so far, maintained their populations — but the forest industry there is increasingly under pressure today.
What happens when an industry collapses in a region?
The loss of industry spreads through municipalities like a cancer. First, industrial workers leave. They are followed by independent contractors such as plumbers, carpenters, electricians, and roofers who depend heavily on industrial customers.
The market then shrinks for professional and personal services — accountants, lawyers, restaurants, hairdressers, and retail. The remaining residents are left underserved. Recruitment and retention for remaining jobs is now very difficult.
The digital economy compounds the problem. Professional services for both industry and individuals are increasingly delivered remotely or by fly-in providers. Real-time operations and maintenance for some industrial equipment can now be carried out remotely.
As the economy contracts, units within all categories of property tax — industrial, light industrial, business and residential decline. There is little prospect of new developments.
Urban centres, by contrast, benefit from population growth, development charges, transit revenues, and other secondary sources that rural communities do not. In fact, Urban centres are increasingly collecting property taxes that were once collected in rural areas.
Government revenues are tied to commercial transactions. There are taxes on income, sales, and profits. There are royalties, fuel, transit and various surtaxes.
Property taxes were meant to reflect a municipality’s share of the economic activity within its boundaries. Today, many of those transactions occur online and are fulfilled with little, if any, physical presence in the community.
The provincial government provides temporary top-ups at their discretion. They call it sharing resource revenues. What’s missing is predictability.
British Columbia’s Northern Industrialization Project 2.0
A new wave of infrastructure investment — comparable in scale to that of the 1940s and 1950s — is about to begin. Today, there is no obvious replacement strategy for forest products. It is hard to imagine mass timber replacing filling the gap.
Municipalities along the Northern Interior Corridors cannot rely on extraction and tourism alone. Long-term stability still requires refining, resource extraction, and manufacturing — no less today than in 1956.
Understandably, there is little discussion of manufacturing beyond forest products. Change is hard, especially in regions shaped for generations by logging and milling. The first step is systematically assess the situation and discover what is possible.
What has changed in international trade for Canada?
In the early 2000s, expanding trade was relatively easy. Supply chains were stable and predictable. We were trying to lure North American imports away from US ports and increase commodity exports. We were successful.
Today, trade is being reshaped by disruption, geopolitics, and supply-chain insecurity. Now, we must increase exports of both commodities and goods. Success will be hard.
The task may be aided by Canada’s growing role as an energy exporter to the Asia-Pacific region. It should increase our trade leverage in the region.
The lesson of Prince Rupert’s Fairview Container Terminal
In the early 2000s, Prince Rupert residents were not looking for change. They hoped to restart the pulp mill and rebuild fish processing.
Fortunately, the Prince Rupert Port Authority (PRPA) had undeveloped land and a mandate to expand West Coast export and import capacity.
At that time, the four terminals in Prince Rupert and Port Edward handled only bulk commodities: logs, grain, pulp, and coal — all suffering from depressed markets. Something new was needed.
The PRPA had been tracking global trade trends and made a bet on container shipping. Container terminals are less dependent on local economic cycles than bulk exports.
It might seem that, following China’s admission to the World Trade Organization, a deep-water port at the terminus of a continental railway would be an obvious location for a container terminal. It wasn’t. The container industry itself was skeptical. There were few early movers, and it needed serious persuasion.
It took years of research and case-building to convince shippers, railways, governments, and investors that a direct ship-to-rail container terminal could succeed without a large local market.
Fairview broke the mould.
The lesson is simple and hard: look outside the box — and do the homework.
What now?
If new manufacturing is to be brought to Northern BC, the search must begin now, if we are to be ready when the next round of construction is finished.
A list is needed to guide the ‘intelligence gathering’ and ongoing monitoring. Among other items, the list should include:
- the technological and physical future of manufacturing;
- what’s happening within Canada’s trade environment;
- the requirements of different products and manufacturers;
- the environmental implications of different manufacturing and processing methods; and
- what assumptions about where manufacturing can and cannot be located must be challenged for success.
- Are there examples of success in similar efforts around the world?
The same work is needed for metal and mineral smelting and refining: how the technology has changed, and what scale options now exist, etc.
Shifting from an industry based on a single feedstock to more diverse, advanced manufacturing is a major transition.
Looking forward, BC’s current manufacturing strategy largely focuses on strengthening southern clusters — aerospace, advanced mechanics, life sciences — which are difficult to replicate in rural regions. But partnerships with northern universities and colleges offer a starting point.
On the coast, there may be opportunities for medium-scale shipbuilding. In the interior, maybe defence vehicles and equipment.
There may also be potential to unlock value-added aluminum manufacturing, as in Quebec, or to refine critical minerals locally, and perhaps to do more with Canada’s copper resources.
The purpose of the studies is to educate communities and First Nations about what is possible and what the trade-offs are — and to build a shared baseline of understanding before specific projects are sought or proposed.
The infrastructure upgrades are today’s priority. Intelligence work done in the background would build knowledge, discover options, and build confidence.
The future of Highways 16 and 97 will be different, best to be out in front of the puck.
