Major project investment down slightly

According to BC Check-Up: Invest, an annual report by the Chartered Professional Accountants of British Columbia (CPABC) on investment trends across the province, there were 309 housing starts in the Kootenays’ two largest municipalities in 2022, an increase of 5.5% from 2021.

“The number of housing units that began construction in Cranbrook and Nelson was the second highest on record,” said Mike Calder, CPA, CA, partner at BDO Canada. “However, it is a tale of two cities, with the increase concentrated in Nelson while Cranbrook saw a significant decline in the number of units started.”

In 2022, the 309 housing units under construction in Cranbrook and Nelson were well above the annual average of 208 started from 2015 to 2021. The decline was concentrated in Cranbrook, where the 132 units started was down 32.3% compared to 2021. In contrast, the number started in Nelson increased to 177 from 98.

Of the total started last year, 171 were detached units (up 5.5%) and 138 were attached units, such as condos or townhomes (up 7.8%).

“With the Kootenays’ population growing rapidly and many struggling to find affordable housing, the strong housing development last year is important,” continued Calder. “While the region has also continued to benefit from major project activity, it has been on the decline in recent years. Still, major capital investment provides significant economic activity to the region.”

The forecasted capital cost of all major projects in the Kootenays, those with a cost of over $15 million, was $6.6 billion in Q3 2022, down from $6.8 billion in Q3 2021 and $7.6 billion in Q3 2020.

The decline was primarily due to the completion of the Elk Valley Water Treatment Facilities ($400 million), Panorama Mountain Resort expansion ($250 million), and Upper Bonnington Refurbishment project ($32 million).

In total, there were 20 projects under construction, worth an estimated $2.6 billion in Q3 2022. The most recently started projects were the Glenmerry Elementary Replacement ($39 million) and Nelson/Castlegar Student Housing project ($31 million).

There were nine project proposals in Q3 2022 worth $2.6 billion, the largest being the Baldy Ridge Extension Project ($1.6 billion).

“Given that high interest rates are weighing down new investment, the fact the region has considerable major project construction underway will support our economy during a challenging time. However, even when interest rates were low the region did not attract enough investment,” concluded Calder.

“Given the importance major projects play in boosting economic growth and improving services for residents, it will be important for our region to foster an environment that can attract more capital investment.”

To learn more, see www.bccheckup.com.

Lead image: An apartment building under construction in Sparwood. e-KNOW file photo

Chartered Professional Accountants of British Columbia

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