The Thompson-Okanagan Development Region (TODR) has a total land area of 94,308 km 2 , and stretches from the US border in the south to just north of Blue River and Mica Creek, and from the Cascade mountains in the west to the Rocky Mountains and Monashee mountains in the east. In 2009, the region had 528,416 residents, 1 or 12% of BC’s total population. The TODR’s largest centres are Kelowna, Kamloops, Vernon, and Penticton . The TODR’s economy has diversified from a historic dependence on resources— especially forestry and mining—to a mix of industries. The Development Region is known for agriculture/viticulture, tourism and trade/services, and has recently become a centre of post-secondary education and manufacturing. Its attractive climate has also made the TODR a popular retirement destination, which has fostered substantial investment in development and construction activity in recent years. In 2009, the TODR’s population increased by 1.6%, or 8,362 residents. This was the third-highest rate of growth after the Mainland/Southwest (1.9%) and Northeast (1.8%) Development Regions. Population growth was positive in all Regional Districts in the TODR, with almost half of this growth occurring in the Central Okanagan (3,492). 1. Statistics Canada, Estimates of Population, by Sex and Age Group: Census Divisions and Census Metropolitan Areas - 2001 Census boundaries, Annual, CANSIM, Table 051-0036. 2010 BC Check-Up – Published by the Institute of Chartered Accountants of British Columbia 1 Thompson-Okanagan Development Region
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Thompson-Okanagan Development Region€¦ · 2 BC Stats, Tourism Indicators, March 2010. 3 BC Stats, Quarterly Regional Statistics. 4 BC Real Estate Association. 5 Kelowna Chamber
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The Thompson-Okanagan Development Region (TODR) has a total land area of
94,308 km2, and stretches from the US border in the south to just north of Blue
River and Mica Creek, and from the Cascade mountains in the west to the Rocky
Mountains and Monashee mountains in the east. In 2009, the region had 528,416
residents,1 or 12% of BC’s total population. The TODR’s largest centres are Kelowna,
Kamloops, Vernon, and Penticton .
The TODR’s economy has diversified from a historic dependence on resources—
especially forestry and mining—to a mix of industries. The Development Region
is known for agriculture/viticulture, tourism and trade/services, and has recently
become a centre of post-secondary education and manufacturing. Its attractive
climate has also made the TODR a popular retirement destination, which has
fostered substantial investment in development and construction activity in recent
years.
In 2009, the TODR’s population increased by 1.6%, or 8,362 residents. This was the
third-highest rate of growth after the Mainland/Southwest (1.9%) and Northeast
(1.8%) Development Regions. Population growth was positive in all Regional
Districts in the TODR, with almost half of this growth occurring in the Central
Okanagan (3,492).
1. Statistics Canada, Estimates of Population, by Sex and Age Group: Census Divisions and Census Metropolitan Areas - 2001 Census boundaries, Annual, CANSIM, Table 051-0036.
2010 BC Check-Up – Published by the Institute of Chartered Accountants of British Columbia 1
Thompson-Okanagan Development Region
2 BC Stats, Tourism Indicators, March 2010.3 BC Stats, Quarterly Regional Statistics.4 BC Real Estate Association.5 Kelowna Chamber of Commerce, Advocacy Summary – 2009 Year in Review.
2010 BC Check-Up – Published by the Institute of Chartered Accountants of British Columbia 2
The TODR’s economy, like the rest of the province, was affected by the economic recession in 2009. Tourism
room revenues were down by 10.5% last year compared to 2008.2 Building permits and housing starts were
25.2% and 43.6% lower. 3 The forest industry, which was already struggling with the pine beetle infestation, was
hit by major fires and record low lumber sales to the US, its principal market. These factors resulted in job losses
in both the goods and service sectors that pushed unemployment to a six year high (8.7%). One of 2009’s few
bright spots was a recovery in house sales in the second half of the year, due to low mortgage rates, pent up
demand, and lower house prices,4 that resulted in a 1.3% sales increase by year end compared to 2008.
W O R K I n d i c a t o r s
Job Creation
After seven consecutive years of expansion, in 2009, the TODR’s economy lost 8,300 jobs. Last year’s 3.1%
decline exceeded the provincial average (-2.4%) and was the fourth-highest after the Cariboo (-9%), Nechako
(7.9%), and Vancouver Island/Coast (-3.8%) Development Regions.
The TODR’s service sector lost 1,400 jobs last year. Four out of eleven service industries reported job gains, but
not enough to offset losses in six others. The largest gains were in professional, scientific and technical services
(2,500 new jobs), and finance, insurance, real estate, and leasing (2,400 new jobs). These gains can most likely
be attributed to growth in house sales in the latter half of the year. Public administration (1,200) and other
services (1,000) also added jobs.
Service industries that reported fewer positions last year were accommodation and food services (-2,400),
trade (-1,500), business, building, and support services (-1,400), transportation and warehousing (-1,300), and
education (-1,200). Although lower tourism volumes, less construction, and fewer lumber exports explain some
of these job losses, local businesses, especially in tourism and trade, reported difficulties in finding experienced
staff to fill positions,5 and thus lower job numbers may also reflect unfilled vacancies.
The TODR’s goods-producing sector suffered the bulk of last year’s employment losses, declining by 6,900
positions, and representing 88% of the Region’s total employment decline. Agriculture was the only goods
sector industry to add jobs (2,400 new jobs) last year. The largest losses were in construction (-2,700) due to
the decline in housing starts, and manufacturing (-3,300) as a result of lower lumber demand.
Table 1-1: Employment, Thompson-Okanagan Development Region, 2004 to 20096
Other services 10.6 8.2 8.4 10.8 10.0 11.0 0.4 1.0
Public administration 6.7 8.4 8.6 8.9 9.0 10.2 3.5 1.2
Source: Statistics Canada, Labour Force Survey Historical Review
Unemployment
In 2009, the unemployment rate in the Thompson-Okanagan Development Region rose by 3.2 percentage points
(ppt), to 8.7%. This was the third highest unemployment rate among the Development Regions last year after
the Cariboo (12%) and Northwest BC (10.4%). It was also the third-highest percentage point increase, after the
Cariboo (5.5 ppt) and Kootenay (3.9 ppt).
6 Industries with 0.0 are estimated to have fewer than 1,500 employed at that particular point in time, thus the numbers presented in the table may not add up to total sector figures, and job creation statistics can not be calculated.
2010 BC Check-Up – Published by the Institute of Chartered Accountants of British Columbia 3
Table 1-2: Unemployment Rate (%), Thompson-Okanagan Development Region, 2004 to 2009
Looking ahead, the Region has over $290 million in committed infrastructure stimulus projects in process,9 in
addition to its substantial backlog of residential, resort, and commercial projects. Building permits and housing
starts appear to be on the rise, buoyed by strong house sales and dwindling supply.10 However, prices are also
increasing and tighter mortgage qualification standards and higher borrowing costs could temper demand.11 For
these reasons, a cautious return to a balanced, rather than the over-heated sellers market of the last five years is
anticipated.
Incorporations and Bankruptcies
In 2009, the TODR recorded 749 fewer business incorporations than in 2008. This is not surprising given tighter
credit and lower investor confidence last year. While business incorporations were down in all the Development
Regions in 2009, the TODR’s decrease (-24%) was the third-largest decline after the Nechako (-39%) and
Northeast (-26.4%).
7 Ministry of Small Business, Technology and Economic Development, Major Projects Inventory, Quarterly Reports, 2008 and 2009.8 Ministry of Small Business, Technology and Economic Development, Major Projects Inventory, Fourth Quarter 2009.9 Building Canada, BC Infrastructure Projects.10 City of Kamloops and City of Kelowna, Building Permit Statistics.11 BC Real Estate Association.
2010 BC Check-Up – Published by the Institute of Chartered Accountants of British Columbia 5
Table 1-4: Business Incorporations and Bankruptcies, Thompson-Okanagan Development Region,
2004 to 2009
Percentage Change
2004 2005 2006 2007 2008 2009
5-Year
2004-09
1-Year
2008-09
Business Incorporations 2,039 2,948 3,196 3,446 3,124 2,375 +16.5% -24.0%
Business Bankruptcies 148 151 116 90 86 66 -55.4% -23.3%
Source: BC Stats and Office of the Superintendent of Bankruptcy Canada
Despite last year’s financial difficulties, bankruptcies in the TODR also declined for the eighth consecutive year.
The TODR’s reduction in bankruptcies ranked fifth among the Development Regions—outranking the Cariboo,
which saw bankruptcies decline 16.7%, and the North Coast and Mainland/Southwest, where bankruptcies
increased 20% and 11.6% respectively. This finding suggests that most entrepreneurs in the TODR were
sufficiently resilient to withstand last year’s economic downturn.
Business Establishments
The number of business establishments in the TODR increased last year for the seventh consecutive year.
Last year’s increase, while modest (1.2%), was nevertheless second only to that of the Vancouver Island/
Coast Development Region (1.4%). This growth resulted from an increase in self-employment (443) and small
businesses with 1 to 19 employees (103), that offset a loss in businesses employing 20 or more employees (-34).
The Region’s growth in self-employment is not surprising given its high number of retirees and semi-retirees,
who tend to undertake consulting work or open a one person business to supplement their retirement income. In
fact, self-employment accounts for approximately half of all business establishments in the TODR.
Table 1-5: Number of Business Establishments – all sizes, Thompson-Okanagan Development Region,
British Columbia 360,779 360,882 362,665 +0.5% +0.5%
Source: Statistics Canada
12 Statistics Canada has changed its methodology in measuring business counts, thus the data reported here are inconsistent with figures reported in earlier editions of this publication. Previously, the concept of a ‘statistical establishment’ was the measure that was used. In 2008, the concept of a ‘statistical location’ was introduced with data back to 2007 available. The change to business location counts was made because they provide a better measurement of actual business units. Due to this change, the reported number of businesses will be higher than would be the case if the earlier framework was still in use.
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L I V E I n d i c a t o r s
Educational Achievement
Educational achievement has a significant effect on labour force productivity, and in the longer-term, purchasing
power. In 2009, the percentage of the TODR’s labour force with post-secondary education increased from 57.5%
to 61%. Last year’s improvement of 3.5 percentage points (ppt) ranked second among the Development Regions,
only marginally behind that of the Kootenays, which improved by 3.7 ppt.
Educational attainment in the TODR ranked third-highest among the Development Regions for the fifth
consecutive year, behind the Mainland/Southwest (65%) and Vancouver Island/Coast (61.9%), but has narrowed
its gap with the two leaders by 5.4 ppt and 4 ppt over the last five years.
Table 1-6: Percent of Labour Force, Age 25-54, with a Post-Secondary Certificate/Diploma or Higher,
Thompson-Okanagan Development Region, 2004 to 2009Percentage Point
British Columbia $32,323 $33,430 $35,569 $37,110 $36,406 +12.6% -1.9%
Source: BC Stats, British Columbia Neighbourhood Income Demographics
Within the TODR, real income growth among the Regional Districts over the four-year period was fairly
consistent, ranging from 12.4% to 13.6%, except for the Central Okanagan Regional District, where it was
substantially higher (16.9%) due to population growth and development. 2008’s contraction was also fairly
consistent across the TODR, ranging from -2.1% to -2.8%, with the exception of the Thompson-Nicola Regional
District (-1.0%).
14 Rates are as of September for each year, and data is unavailable for years prior to 2007. These figures include those on temporary assistance, but exclude those on continuous assistance (disabled or with persistent multiple barriers to employment), children in the home of a relative, and OAS/seniors and aboriginal people living on reserve.
15 As of September 2009, BC Stats has revised these statistics to include only a subset of those receiving Employment Insurance to better align with Statistics Canada’s Employment Insurance Releases. These figures now include those receiving regular benefits, fishing benefits, work sharing, employment benefits, and support measures and excludes those receiving sickness benefits, maternity benefits, and parental benefits.
16 Pre-tax income is deflated by the Consumer Price Index, with a base year of 2002. In previous editions, we have used real income per capita an indicator; however, the recent release of census population figures has shown that, in some cases, population estimates made by statistical agencies between census years significantly diverge from census counts. Therefore, we have used the number of taxfilers as the denominator in this edition of the report, as it is more accurate. Data source: BC Stats, British Columbia Neighbourhood Income Demographics. See the glossary at the end of this report for definitions of “pre-tax income” and “taxfiler.”
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While the fourth quarter of 2008 marked the start of the economic downturn, its full impact was felt in 2009.
Job losses, rising unemployment and lower investment income in the TODR last year will undoubtedly be
reflected in future income data.
C o n c l u s i o n s
Last year’s economic recession took its toll on the TODR, as it did on the entire province. Tourism was down.
Capital investment, construction and new housing starts in particular, which led economic growth and job
creation in the TODR over the last five years, were depressed throughout the year. As well, the already struggling
forest industry was hit by major fires and record low demand for lumber. All of this led to substantial job losses
and the highest unemployment and dependence on unemployment insurance and social assistance in over
five years. Not surprisingly, business incorporations were also down, but existing businesses held their own,
as bankruptcies fell to their lowest level in a decade and the number of establishments grew for the seventh
straight year.
At the same time, the TODR has shown some early signs of a turnaround. Housing sales have recovered since
last summer, buoyed by low mortgage rates, lower prices, and pent-up demand. Dwindling house supply appears
to be coaxing a rebound in building permits and construction. Predictions of a modest increase in US housing
starts17 and increased overseas demand, especially from China, also bode well for higher lumber demand in 2010.
Added to this is the increase in the TODR’s labour educational attainment, which furthers the region’s ability to
diversify its economy and support value-added enterprises. Most economists agree that recovery will be slow
and return the economy to a more moderate level of activity.
17 Conference Board of Canada.
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G l o s s a r y o f D e f i n i t i o n s
Business establishments:• Production entity or group of entities that produces goods or services, does not
cross provincial boundaries, and provides data on value of output and input costs to the government.
Employment income:• Includes wages and salaries, commissions from employment, training allowances, tips
and gratuities, and all income from self-employment (business, professional, farming, fishing income, and
commissions).
Job creation: • Change in number of employed individuals between two given years.
Pre-tax income: • Comprised of labour force income (employment income, wages and salaries, income
from self-employment, and employment insurance benefits), pension income, old age security, CPP/QPP,
superannuation, family allowance income, interest and other investment income, limited partnership income,
rental income, other income (such as alimony and income for non-filing spouses), RRSP income, non-