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Introduction

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As one of the largest geographic areas in the province, the Northeast Development Region (NEDR) accounts for almost one quarter of British Columbia’s land mass. The region spans both the Peace River Regional District and the newly-established Northern Rockies Regional Municipality[1] (formerly the Northern Rockies Regional District), and had a population of 68,247 in 2009, an increase over the previous year.[2] It includes the major communities of Fort St. John, Dawson Creek, Chetwynd, Tumbler Ridge, and Fort Nelson.

Resource exports, especially oil and gas exploration, are the economic mainstay of the Northeast. Most mining in the region is coal-based and is situated around and to the south of the Peace River Development Region, which also produces 90% of BC’s grain, and 38% of its hydroelectric power.

The NEDR, and the entire province, felt the economic ramifications of the global financial crisis that occurred in late 2008. Dampened consumer demand and investor confidence led to a North America-wide credit crunch and slowdown in exports and housing prices that extended throughout 2009.

In 2009, BC’s real GDP contracted by 2.4%[3] and unemployment rates rose in every region. The NEDR’s economy felt the effects of a turbulent resource sector, which continued to founder throughout 2009: natural gas prices declined due to weakened domestic and industrial demand, and a large North American inventory; coal prices declined (the second quarter being the exception) as market demand, particularly in China, tapered off; and lumber prices continued to slide, despite renewed housing demand in Canada and the US.

This “perfect storm” of conditions resulted in layoffs throughout the Northeast, which experienced its highest rate of unemployment (6.8%) since 2002.

While the NEDR was vulnerable to the global economic events of 2009, it was to some extent buttressed by exploration and development in the gas sector and, at least in the first half of the year, by ongoing Chinese demand for coal. With the discovery of the Horne River Basin shale gas deposit, exploration and development has ramped up, with several companies leasing large tracts of land during the past year. The outlook is improving for resource commodity prices, and at least one of several proposed wind power projects is going ahead in 2010 – the Dokie Wind Project near Chetwynd resumed construction in February 2010.

Footnotes

1. Established in February 2009, combines the town of Fort Nelson with the Northern Rockies Regional District.
2. Statistics Canada, Population Estimates as of July 1st, CANSIM, Table 051-0036.
3. Estimate from TD Bank Economics, Provincial Economic Forecast, November 3, 2009.