Economic Planning Study
The Growth Management Plan (GMP) recognizes the importance of a healthy economy to the sustainability of the region. It recognizes that the economy of the region has undergone, and continues to undergo, substantial structural change. The Growth Management Plan recognizes that the way the region adapts to structural change in its economy needs to protect the qualities that draw people to the area such as the region's rural character and natural environment. The Growth Management Plan recognizes that the establishment of an equal number of jobs and homes in "nodal areas" can contribute to the economic vitality of the region consistent with environmental protection objectives. It also recognizes that the economy of the region will have to shift from an emphasis on physical capital to intellectual capital to respond to the changing global economy.
The purpose of the Economic Planning Study is to identify the major economic trends and issues facing the non-industrial economic sectors of the Regional District of Nanaimo, to identify feasible options to facilitate economic development and growth in the Regional District consistent with the intent and direction set forth in the Growth Management Plan, and to formulate an implementation plan using a consultative process that provides the Regional District with a "road map" needed to achieve the strategic objectives of the Growth Management Plan.
Part 1: Major Economic Trends and Issues
The first part of the Economic Planning Study identifies major economic trends and issues facing the non-industrial economic sectors of the Regional District of Nanaimo. Trends identified include:
- The Regional District of Nanaimo (RDN) remains one of the fastest growing regions in the Province. From the 1996 Census population growth data, the RDN experienced the fourth fastest growth rate of all regional districts in the province, increasing by 19.7% over the period 1991-1996 or 3.7% per year. The Squamish-Lillooet regional district experienced the fastest growth at 25.5% or 4.6% over the same period.
- Over the period 1991-1996, the RDN experienced a gradual aging of its population as the younger age groups continued to decline and older age groups increase. In fact, the RDN 65+ age group increased from 12.4% in 1981 to 17.2% in 1996, which suggests that many people find the RDN a desirable retirement location. This trend is expected to continue due to the aging of the baby-boomers and the migration of older residents into the region.
- The aging effect was moderated to some extent by a large number of newcomers in the 0-17 and 25-44 age brackets that moved into the region in the last six years. This inflow of younger newcomers was likely due to individuals within the province, particularly the Lower Mainland, moving into the region to take advantage of the region's desirable lifestyle attributes.
- Those communities which had the largest component of their populations represented by individuals of 65+ years, also experienced the largest annual increases in the 35-49 age group (i.e., Parksville and Qualicum Beach). Part of this linkage is likely due to individuals moving into the region to start businesses that service the needs of the growing number of retirees in the region, along with many in the 35-49 age group deciding to commute to other regions for work.
Income and Education
- Although the average income in the RDN is slightly less than the province as a whole, it is remarkably similar in distribution to that of the province. This is interesting given the fact that the RDN has a higher proportion of individuals 65+. This suggests that there is a large number of retirees with substantial retirement incomes moving into the region. This has marketing and retail implications for the Regional District's businesses.
- The number of individuals with trade certificates in the RDN increased by 34.0% over the period 1981-91. This very positive trend reflects the strong growth in the level of construction activity that the RDN experienced over the period 1986-91. Although the number of individuals attaining high-school completion or equivalency increased in absolute terms, as a share of the population 15+, the level actually fell. The proportion of individuals with university degrees fell slightly, although the number of individuals with some university training actually increased.
Employment and Economic Trends
- By 2021 it is expected that the population of the RDN will be 213,032. This represents a 75.0% increase or a 2.3% annual growth rate over the next 25 years. This forecast reflects an assumption that the growth rate of the RDN will slowly decline over the forecast period. This slowing in the growth rate is based on the view that net migration into the Regional District (the principal driver of the region's population growth) will begin to decline and then stabilize.
- The region's population is expected to continue to age. The median age is forecast to increase from 39.3 years in 1996 to 44 years by 2021. This general pattern of aging is consistent with the forecasts for Canada and most other industrialized countries.
- As a result of the aging trend, the RDN will likely experience an increased need for support services and in-home care assistance. The large number of newcomers into the Regional District suggests that there will be little if any extended family support to assist the older residents. This offers tremendous business opportunities for entrepreneurs in the RDN who can offer reliable caring services to these individuals.
- The greying of the RDN population will also mean changing recreational requirements, as older people stay active longer than in previous generations. Taxi and mini-bus services should see increased demand. The Growth Management Plan's focus on creation of self-supporting communities less reliant on cars is a positive step to helping elderly residents remain independent longer.
Employment and Economic Forecast
- Total employment in the RDN was estimated to be 55,170 in 1995. This represents a 15.5% increase over the Regional Districts 1991 levels.
- The RDN economy remains a mix of agricultural, primary, manufacturing and service industries. The service sector (which includes retail wholesale trade, transportation, financial insurance and real estate, business services, accommodation and food services and other services) remains the largest employer in the region, accounting for over 67.0% of overall employment, which is slightly higher that the Provincial proportion of 61.0%. The trade sector, which includes both retail and wholesale trade accounted for 20.5% of overall employment and reflects the growing trend for the RDN becoming the central retail hub of the Mid-Island.
- The Regional District has experienced a growing trend towards private sector employment. This is a very positive factor for the region's future growth. First, it reflects a strong and experienced entrepreneurial mindset within the RDN. This represents a vital source of skills that the RDN can draw on to help continue developing new jobs in the future. Second, as governments continue to reduce their services and employment, the RDN economy will be less susceptible to potential government cut backs.
- The main driver of the RDN economy is small business. A small business, defined as a firm employing less than 20 employees, accounted for 91.4% of all businesses operating in the RDN in 1995. This is a very positive factor, given that the majority of new jobs in the province were generated by small businesses.
- The relative share of manufacturing employment fell from 9.5% in 1991 to 8.2% in 1995. This trend should not be allowed to continue, and ways of maintaining the manufacturing base should be discussed with business leaders.
- Tourism actually saw a reduction in the levels of employment over the period 1991-95. This trend is not expected to continue, as more development in this area is expected to occur as the region transforms itself into a destination location. The presence of a regional airport is a positive factor and could help bring visitors into the region.
- Employment is forecast to increase by over 55.0% by the year 2021. The service sector is expected to show the strongest growth, however, employment in the agricultural and other primary sector should decline slightly. Manufacturing is expected to experience modest growth, increasing at approximately half the rate of the service sector. Construction will see positive employment growth along with business services. Given the anticipated aging of the RDN's population, health and social services along with other services will likely see significant increases in employment opportunities. It is expected that employment in these two sub-sectors will almost double over the next 25 years.
- It is becoming more and more obvious that the only real solution to sustainable economic growth and development in any community is to harness and foster the drive, imagination and skills of local residents. The fundamental structure of the RDN's economy is therefore a positive factor and should aid in future growth. Consistent application of principles and development direction (i.e., GMP goals) is essential to generating a climate that is positive to continuing economic growth.
Part 2: Options to Facilitate Economic Development and Growth
The second part of the Economic Planning Study identifies options to facilitate economic development and growth in the Regional District consistent with the intent and direction set forth in the Growth Management Plan. Recommended economic development initiatives include:
- The consideration of improving and marketing the region's strengths including regulation and infrastructure (i.e. fiber optic links, airport facilities, possibility of high speed ferry links, informational and directional signage, container handling capabilities);
- Value-added processing activities (i.e. wood village, remanufacturing, thin slice veneer and manufacturing building components);
- Knowledge-based industries (i.e. recruitment, developing a high-tech park);
- Providing services and goods that match the demographics of the region (i.e. congregate care, assistance and care services, high quality personal services, unique retail establishments, recreational activities that appeal to older, active people, construction of wider variety of multiple-dwelling unit housing types to meet the changing market needs, specialized transit and private transportation services);
- Tourism (i.e. establish a regional focus to market the whole area to increase the length of visitor stays, establish a one-stop regional tourism information center, establish a regional tourism web site, develop ways of informing tourists of area attractions away from the main highways).
The third part of the Economic Planning Study includes an implementation strategy based on consistency, coordination and cooperation.
The implementation strategy includes specific recommendations regarding regulations, infrastructure requirements, the pursuit of value-added and high-tech economic opportunities, economic activities to match the demographics of the region, and tourism.
The implementation strategy also includes an "initial action plan" that consists of the following nine steps:
- Issue joint policy statement: A joint policy statement from the highest community and regional political levels should be made, specifically stating that there is political support for pursuing positive economic progress in keeping with the intent of the region's Growth Management Plan.
- Assign staffing: An individual from each community should be identified as the key contact person for economic development issues.
- The Regional District should investigate the potential for fulfilling an overall economic development coordination role: The Regional District can play an important economic development coordinating function within the region.
- Initiate dialogue and establish a meeting and reporting schedule: The assigned liaison coordinators will call each other and arrange an initial meeting. The initial meeting should determine a schedule for regular meetings and identify potential business organizational participants.
- Build on established lines of communication with business: It is important that key business leaders and organizations be included in the process.
- Determine the nature of the organizational structure: Regional economic development can either be pursued by an independent group or an existing group. The preferred approach needs to be discussed.
- Identify a suitable initial project that the liaison development group can undertake: A project that the group can jointly pursue should be identified and acted upon.
- Fees-for-service should be used to fund joint projects: Consider using a fee-for-service structure to develop projects. Potential sources of funds from existing community, regional and provincial sources should be investigated.
- Issue development group direction statement: The economic development group should issue an organizational statement outlining its goals and philosophies. This will help focus the group's activities and may help attract further business leader interest and input.
The Economic Planning Study concludes that the Regional District of Nanaimo (RDN) has a number of distinct advantages that if used correctly, in a targeted development strategy, can foster economic development that is in keeping with the broad goals of the Growth Management Plan. It notes the real competition for economic growth and prosperity is not with communities within the RDN but with communities outside (i.e., Abbotsford, Coquitlam, Burnaby, Washington State and Oregon State, etc.). The RDN is in the enviable position of being able to offer a mild marine climate, shopping, recreational and cultural activities (theaters, nature, bike and walking trails, marine/boating activities, etc.) that are comparable to those found anywhere in the Lower Mainland, but are not associated with the urban sprawl and gridlock of the Greater Vancouver area. This is a remarkable factor, which opens a window of opportunity for the Regional District to attract positive economic development. However, it must be recognized that this window will not remain open forever, and that coordinated action must be taken now.
The Economic Planning Strategy report may be purchased at the Regional
District of Nanaimo offices for $25.00 (plus applicable taxes).