British Columbia (B.C.) is the third largest Canadian province by population and fourth largest provincial economy. Like other provinces in the Canadian federation, B.C. consists of both private and public institutions. However, as Canada's westernmost province, located between the Pacific Ocean and the Rocky Mountains, B.C. has unique economic characteristics that distinguish it from much of the rest of Canada.
Economic geography Geography has played a significant role in the province's economic development. B.C.’s location on Canada's west coast puts it at the commercial crossroads of the Asia-Pacific region and North America.
B.C. is geographically characterized by mountainous topography along with substantial areas of lowlands and plateaus. Though less than 5% of B.C.’s land is arable due to mostly mountainous terrain, the province is agriculturally rich. This can be attributed to relatively mild weather along the Pacific Northwestern coast and in various sheltered valleys.
There are eight economic regions within B.C. This includes: the Cariboo, Kootenay, Lower Mainland/Southwest, Nechako, North Coast, Northeast, Vancouver Island and Coast, and Thompson/Okanagan region. In addition to the many towns and cities in these regions, the province is home to over 200 First Nations.
According to the 2021 census, 85% of the population is classified as urban and is highly concentrated along B.C.’s southern coast. Around 60% of B.C.’s population resides in the Mainland/Southwest region which includes the City of Vancouver. West of the Lower Mainland across the Strait of Georgia lies Vancouver Island, which encompasses approximately 20% of the population, including Victoria, the provincial capital.
While service-based industries dominate its cities, resource-based sectors—principally forestry, agriculture, natural gas and mining, figure prominently as economic activities in less urbanized areas.
Economic history Indigenous peoples have lived in the area now known as B.C. for more than 10,000 years, where economic activities centred around fishing, hunting and food gathering. The area was home to thousands of Indigenous peoples when European explorers began to visit in the 1750s. However, the area was difficult for early Europeans to reach, so it was the last part of North America to be explored.
It was not until the first half of the 19th century that the Hudson's Bay Company expanded to the west of the Rocky Mountains and established trading outposts. The company traded with Indigenous tribes for sea otter pelts and animal furs. In 1849, Vancouver Island was colonized by the British and a lease was granted to the Hudson's Bay Company giving it exclusive trading rights on Vancouver Island. Soon after, the Gold Rush attracted tens of thousands of people to the interior areas of the province. B.C. remained a British colony until 1871 when it became a province of Canada. In 1885, the Canadian Pacific Railway was completed, linking the country from east to west. The railway increased trade and the movement of people and resources from the Atlantic to the Pacific.
Around the turn of the 20th century, entrepreneurs came to B.C. to develop the province's vast natural resources and agricultural potential, ushering a period of rapid economic expansion and population growth. Major dams were built to support a growing electrical grid and the Trans-Canada Highway was completed, allowing for easier movement of goods and services. As population increased, it became concentrated around the ports in the southwest part of the province. Management and financial activities related to resource development remained in these coastal cities during this time, including Vancouver. Consumer-goods manufacturing also began in southwestern cities, due in part, to the high cost of transporting manufactured goods from eastern Canada and the US at the time.
British Columbia has historically been a resource-dominated economy centred on the forest industry, with fluctuating importance in mining, farming and natural gas. About 60% of British Columbia is forested, accounting for approximately 19.5% of the forested land in Canada. Today however, B.C.'s economy is more diverse, with service industries accounting for the largest portion (75%) of the province's gross domestic product (GDP). Over the past several decades, employment in resource industries has fallen steadily as a percentage of employment, and new job growth has occurred mostly in the construction, real estate, leasing and rental, and the retail/service sectors.
Key economic indicators +British Columbia key economic indicatorsMetric202220212020GDP and TradeGross Domestic Product – GDP (Millions of CAD dollars)$322,862$311,143$290,575Real GDP (% change)3.87.1(3.1)Trade Exports (% change)6.46.4(10.2)Trade Imports (% change)8.08.8(7.4)Labour Unemployment Rate (%)4.66.69.1Labour Force (% change)1.03.3(1.9)Prices and Consumer ExpendituresConsumer Price Index (% change)6.92.80.8Population and MigrationPopulation5,319,0005,202,0005,155,000International Migration (people)150,78367,561(1,651)Interprovincial Migration (people)48127,22519,304 Sources:
2023 B.C. Financial and Economy Review, Government of British Columbia
Statistics Canada Table: 36-10-0222-01 Gross domestic product, expenditure-based, provincial, territorial, annual
Economic infrastructure
Transportation
Air
B.C. has six international airports, including: Victoria (YYJ), Vancouver (YVR), Kelowna (YLW), Abbotsford (YXX), Cranbrook (YXC) and Prince George International Airports (YXS).
Railways, Highways and Roads British Columbia is the only gateway on the west coast of the Americas served by three continental Class 1 railways (Canadian National, Canadian Pacific, and BNSF), connecting ports on the Atlantic, Pacific and Gulf coasts to key markets throughout Canada, the United States and Mexico. British Columbia has six railways crossings into the United States.
The provincial highway and railway network makes transporting goods and services to North American markets reliable. The highway system allows trucking across Canada and access to interstate highways in the United States. Computerized traffic management and integrated rail-truck terminals ensure effective freight transfer.
Sea
The Port of Vancouver is Canada's largest port and the third largest port in North America; it is responsible for Canada's trade with more than 170 world economies. The ports of Vancouver and Prince Rupert, which are ice-free year-round, are Asia's closest ports of entry on the west coast of North America—saving shippers more than two days travel time as compared to other west coast ports.
Energy More than 98% of the electricity generated in British Columbia comes from clean or renewable resources. Electricity rates in British Columbia are also among the lowest in North America.
British Columbia also has an abundance of natural gas, estimated at over 2,900 trillion cubic feet of marketable shale gas reserves. For more than 50 years B.C. has ranked second only to Alberta in natural gas production in Canada. In recent years, B.C. has begun to expand natural gas export capacity to markets beyond North America in the form of liquefied natural gas (LNG) that can be shipped to Asia.
In 2018, the Government of British Columbia launched CleanBC, a plan to reduce emissions, advance the clean tech sector and grow B.C.’s low-carbon economy.
Communications and networks British Columbia has the highest rate of broadband and overall Internet connectivity in Canada. An extensive fiber-optic network and LTE services span the province. However, due to predominantly mountainous terrain, many sparsely populated areas of the province offer no cellphone or internet services. An advanced communications infrastructure also provides telephone, broadcasting, cable, wireless and other information services.
Health and education B.C.’s education system includes 25 public post-secondary institutions with 165 campuses, satellites or learning centres, including 6 research universities. There are also 350 private career training institutions with more than 50,000 students attending yearly. British Columbia's trades training system currently serves more than 38,000 apprentices. The quality of education in British Columbia is considered very high and Canada has the highest proportion of working-age adults who have been through higher education among developed countries in the world.
The B.C. Ministry of Health is a provincial government body responsible for the administration of British Columbia's public health system. The ministry works with health authorities, health care providers, agencies and other organizations to guide and enhance the province's health services. The quality of healthcare in British Columbia is relatively similar to other Canadian provinces. In Canada, public health insurance is available to all eligible Canadian citizens and permanent residents who can apply for provincial health coverage. In B.C., public health insurance is called the Medical Services Plan (MSP) and is managed by the Ministry of Health.
Government and institutions Canada, and in turn, British Columbia's system of government, is based on the British parliamentary model. Exclusive legislative powers are delineated between federal and provincial levels of government as defined by the Constitution of Canada. Municipal powers are delegated by each respective provincial legislature.
Legal tender used in B.C. is the Canadian Dollar, managed at the federal level by the Bank of Canada, which is also responsible for oversight of the Canadian financial system, including banking and monetary policies.
The B.C. government's annual budget is tabled for debate and vote in the provincial legislature every year in February. The Budget and Fiscal Plan is the main budget document that outlines the Province's three-year fiscal plan, including economic outlook, revenues, spending, tax measures, risks forecast and assumptions. The fiscal year runs from April to March. Healthcare, education and social development programs have historically been the largest B.C. government expenditures.
British Columbia's general corporate income tax rate is 12%. When combined with the federal rate, B.C. businesses pay a general corporate income tax rate of 27%. B.C. has the lowest provincial personal income taxes in Canada for single individuals earning up to $125,000 (CAD). The sales tax rate for purchased retail goods in B.C. is 7% (PST). Both goods and services are also subject to a federal goods and services tax of 5% (GST).
B.C. has one of the highest credit ratings among Canadian provinces, reflecting a strong balance sheet and depth and diversity of a fiscally stable economy. Agencies such as Moody's, Standard and Poor's, and Fitch rate B.C.’s debt as AAA and stable. As of March 2019, total provincial government debt stood at $66.0 (CAD) billion – representing 22.3% of B.C.’s nominal GDP.
Trade and investment Trade agreements Companies with operations in British Columbia enjoy duty-free access to the world's largest marketplaces in Asia, North America and Europe thanks to the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP), the North American Free Trade Agreement (NAFTA) and the Canada-EU Comprehensive Economic and Trade Agreement (CETA). In 2018, Canada, the US and Mexico negotiated a new trade agreement to supersede NAFTA, the Canada-United States-Mexico Agreement (CUSMA, also known as USMCA) which currently awaits ratification by governments of Canada and the United States.
Domestically, British Columbia, is a member of the New West Partnership Trade Agreement, which creates a single economic region encompassing British Columbia, Alberta, Saskatchewan and Manitoba: a marketplace of more than 11 million people and a GDP of more than $700 billion.
Exports