There are statistics, charts and tables that provide an overview of the economy of British Columbia compared to COVID-19. And then there is the Gabriel Stratulat timer.
At the start of March, the Vancouver tour guide had 22 reservations for the summer. He counted on at least 80 others by the end of August.
Today, he says, they are all canceled.
“And of course, because of the travel ban, no one will come to Vancouver. So that’s how affected we are, “said Stratulat, who runs a private travel agency called BC Grand Tours.
“From $ 60,000 to $ 70,000 to $ 100,000 a year, we earn zero. Not $ 1,000 – zero. So this is how we are affected. “
Looking at the months and perhaps years to come, Stratulat says he is currently depressed.
He is not alone.
The tourism industry is just one of the engines of British Columbia. an economy that was quickly ravaged by the new coronavirus as the pandemic closed borders, disrupted supply chains and plunged health systems into chaos as the world sought to curb its spread.
From forestry and filmmaking to mining and manufacturing, economists say it is difficult to predict the depth of damage or the time it will take for the province to recover.
That’s if it can be expected at all.
“This is completely unprecedented, so thinking about it really requires opening your mind and being creative and flexible,” said Ken Peacock, chief economist at the Business Council of British Columbia.
“Traditional models are simply not calibrated to produce estimates and to model what is going on. “
Difficult to predict
According to Statistics Canada, British Columbia’s gross domestic product (GDP) – the total value of goods and services produced in the province annually – was around $ 264 billion in 2018.
Experts in all fields say that determining how much COVID-19 can reduce this number is, at this stage, too difficult; no one can say for sure how long the measures necessary to fight the virus will be in place.
Provincial health worker Dr. Bonnie Henry has suggested that even when the restrictions begin to lift, some physical distance will still be needed to keep the disease under control.
But what does this mean in terms of attendance at restaurants, bars and hotels that employed nearly 200,000 people in the province in 2018?
Will universities still be able to open their doors to international students who provide much of their funding?
And will the borders be opened to export billions of dollars worth of forest and industrial products from British Columbia? must sell?
As Peacock explains, the B.C. economy is primarily driven by the goods and services sold in markets outside the province. It brings in money in British Columbia, and other domestic companies in turn supply goods and services to these exporters.
Natural resources – forestry, mining, and related products like aluminum – have always been the cornerstones of the province’s economy. But the real estate, housing and rental markets are also huge generators of GDP, as is the construction industry.
And in recent years, while the forestry sector in particular has fallen behind, other sectors, such as tourism, have developed.
“I cannot make payments”
The tourism industry in British Columbia generated $ 20.5 billion in revenue in 2018.
According to WorkBC, the sector employs around 160,000 people, mainly through local small and medium-sized businesses like the one Stratulat has been building since 2014.
Originally from Romania, Stratulat left a mechanical engineering career to become a tour guide. He has regularly built a solid reputation through his own business and ToursByLocals, a platform that connects tourists and guides, which was ranked as one of the best employers in British Columbia last year.
Much of his business is spent on cruise ship passengers who wish to spend a few hours – and a few hundred dollars – in the Vancouver area.
But all of that has dried up, and with it the money Stratulat needs to pay for the two Mercedes vans he uses to take travelers to scenic spots like Whistler, Banff, Victoria and Jasper.
“I have huge payments and, in fact, I can’t make the payments,” said Stratulat. “Fortunately, my wife is working, so she pays the mortgage. But for me, I have no income and it is very moving for me. I could lose everything. “
Should be temporary?
Peacock and his works council have made predictions regarding the impact of COVID-19 on British Columbia. economy based on two different scenarios.
The first would see the economy shrink by around 7% in 2020, based on a return to a kind of normal this summer. But the second would imply an 11 percent drop based on longer closings, widespread job losses and a deep global recession.
In contrast, Bryan Yu, deputy chief economist at Central 1 Credit Union, says he expects British Columbia’s economy to shrink by about 3.5% for the year.
That’s still a lot, but Yu says the province has large-scale infrastructure projects – such as the Site C dam and the development of LNG Canada’s liquefied natural gas project in Kitimat – that could serve as a buffer for a part of the loss.
It also highlights the recent diversification of the economy, which has grown in the high-tech and agricultural sectors.
Yu also expects unemployment to reach between 8-10% in 2020. “But in our opinion, much of this should be temporary,” he said.
In Peacock’s two scenarios, the hardest hit sectors should be the arts, entertainment and recreation, as well as accommodation and food services. And construction, manufacturing and wholesaling can all expect to contract in double digits.
Why not take a break?
So why can’t British Columbians – and Canadians in general – freeze the economy as they weather the COVID-19 storm?
Even if the question seems naive, Peacock and Yu say it is a question that many people have asked.
They both say that the federal and provincial governments have indeed tried to hit the pause button by providing tens of billions of dollars to help Canadians and unemployed businesses close the gap.
But this is where a time element comes in.
“When you talk about break times of a month or two months – maybe three outside – it’s a bit doable,” said Peacock. “It is another thing to take a six or seven month break: governments cannot fill the hole created by the recession. They just don’t have enough resources. “
And the longer people are out of work, he says, the harder it will be for them to re-enter the workforce.
“Many of the businesses people hoped to return to may not exist,” he said.
“Then there is the whole issue of rent and mortgage payments. You can postpone and delay them, but ultimately you have to pay them back. “
Another part of the COVID-19 economic equation comes down to how other countries are dealing with the virus.
About half of British Columbia’s exports go to the United States, with the remainder split between China, Japan, the rest of Asia, and certain other countries. China is slowly reopening its business, but the United States faces an uncertain future in terms of both its economy and the battle for public health.
If there is a growing industry in this pandemic, the Business Council of B.C. plans to be the government.
Peacock’s projections estimate that the share of general government in the province’s GDP could increase by six to nine percent, depending on the length of the crisis.
“An energy transition”
Iglika Ivanova, a feminist economist at the Canadian Center for Policy Alternatives, says she hopes all tax hawks in favor of the government cut will remember the role the province and Ottawa played in trying to save the economy.
She also believes that British Columbians should ask themselves what kind of economy they want to see on the other side of the pandemic.
This can include things like restructuring a long-term care system that has proven to be vulnerable to the virus. Or by offering better wages to janitors, caregivers, delivery drivers, grocery clerks and other front-line workers whose work proved invaluable in the storm.
And Ivanova said she believes the province should invest in renewable energy and green industries to weather the economic shock of the future.
“We all know that we have to make an energy transition,” she said. “In the medium and long term, why not launch it now that we are likely to provide a lot of support to businesses? … Why not support the type of business investment that we know will benefit us in the long term? “
In the meantime, people like Stratulat can do nothing more than follow the ever-changing news around COVID-19 and hope for the possible return of their portion of British Columbia. economy.
“If this thing doesn’t stop, with all the social distances and all that, no [until] October this year will allow people to book tours for next summer, “he predicts.
What if longer?
“It could be a year, it could be more. I do not know. “