Demographics & Labour

by Andrew Findlay

Vancouver Island is home to two of the fastest growing cities in Canada – Nanaimo and Langford – but are we still a retirement Mecca? The short answer is yes. Our mild winters, coastal lifestyle, and recreation amenities remain big draws for people looking for a pleasant placed to post up in their retirement years. But the demographic picture is a little more nuanced, and perhaps even a little less grey.

According to BC Check-Up Live 2023, a survey prepared by the Chartered Professional Accountants of British Columbia , in 2022 Vancouver Island/Coast (which includes the Gulf Islands and Sunshine Coast) welcomed 16,113 new residents. That’s a one-third increase in annual migration to the Island over the average of 11,845 people who moved here every year between 2017 and 2021. According to the most recent census data, a little over 6,000 people moved from other parts of BC while 6,140 moved from other provinces.

That put the total population of Vancouver Island at approximately 865,000 in 2021, a little under half of whom were in the Capital Regional District. Notably, among Vancouver Island newcomers, 85% of those coming from elsewhere in BC were under the age of 65, while more than 90% of out province newcomers were under 65.

However according to the Vancouver Island Real Estate Board , interest in relocating to the island continues to surge with Baby Boomers and Gen X’ers, two demographic groups that have accumulated significant wealth. In other words, we’re still old. With an average age of 45.9, Vancouver Islanders are 3.1 years above the provincial average. In addition, those 65 and older now make up more than a quarter of the population, up from a fifth in 2021. This aging demographic is reflected in negative natural population growth (births minus mortality) on Vancouver Island, something that B.C. also experienced this year for the first time in its history.

When BC Check-up Live surveyed businesses about the top challenges they face, respondents from across the province listed labour shortages, labour compensation and housing prices as the three biggest challenges they face.

So, what does housing affordability and our seniors-skewed population mean for the Vancouver Island economy and the employment market?

First let’s look at housing. Though not as acute as the Lower Mainland, housing affordability is an increasing challenge for Vancouver Island communities, from Greater Victoria north to Campbell River. Record 40-year high inflation and interest rate hikes that saw the Bank of Canada rate jump from 0.25% in 2022 to 5% in July 2023 have had a cooling effect on the real estate market. However, this has been offset somewhat by a surge in population, a drop new completed housing units, a lack of inventory, and strong demand. This is keeping rents and real estate prices high.

“As of August 31st, the total number of transactions in the Vancouver Island Real Estate Board (VIREB) trading area were down nearly 20% year over year. Total dollar volume for these transactions was also lower at just over $5 Billion representing a 27% decline year over year,” says Jason Yochim, CAE, CRAE , Chief Executive Officer of the Vancouver Island Real Estate Board. “A stabilizing of interest rates, lack of inventory and a strong demand for housing resulted in an active market over the summer.”

Last August, Campbell River, Cowichan Valley and the West Coast of the Island saw the biggest increase in sales. In August 2023, the price of a single family home in the City of Victoria reached $1,022,652, up 4.3% year over year. That’s comparable to the cost of a similar home in Kelowna and reflects the lack of inventory.

At the same time, a shortage of housing stock is making it tough for renters, which could have a ripple effect for businesses trying to attract and keep staff. Rents for one-bedroom suites in Greater Victoria were up 10.5% to $1,341 per month on average. The rental market is particularly tight in the Capital Region with the vacancy rate hovering around 1.5%, one of the lowest vacancy rates in Canada. Meanwhile in Nanaimo, average rents for a one-bedroom were up 12.6% in Nanaimo to $1,230 per month. Surprisingly both are slightly less than the provincial average of $1,431, which is driven largely by Lower Mainland rents.

So even though Vancouver Island struggles with housing access and affordability, price coupled with lifestyle is still attracting newcomers cashing out of more expensive real estate markets, especially in the Lower Mainland.

Now what about Vancouver Island’s older than provincial average population?

Analysts predict our aging demographic, a short supply of housing, and inflation will have a significant impact on businesses and the employment market in the coming years. Employee recruitment is top-of-mind for Chambers of Commerce members throughout Vancouver Island. Over the next decade, the Vancouver Island and Coast region is expected to have 176,700 job openings. A whopping 62 percent of those openings will come from positions vacated by retiring workers. Service sector jobs in retail, business and building support, computer systems, ambulatory health care, and food and beverage take the top-five spots in expected job openings through to 2032, according to the latest statistics from Work BC. Over that same time period, employment demand is projected to increase by an annual average of 1.5 percent, slightly faster than the provincial average of 1.3 percent.

For job seekers, these are boom times. From frontline retail and hospitality to the construction and health care, “help wanted” signs are a common sight. The job market is so hot that some employers are offering signing bonuses and other incentives to attract applicants.

Not surprisingly unemployment rates on Vancouver Island are well below the provincial and national averages. Victoria’s unemployment rate in August was 4 percent compared to the provincial rate of 5.8 percent, with 5,000 more full-time and 1,800 more part-time jobs over the previous month earlier, while Vancouver Island/Coast’s overall unemployment rate sat at 4.1 percent last May, down from 4.3 percent a year earlier.

While it’s a good time to be looking for work on the Island, for businesses, Crown Corporations, government, and not-for-profits, these are unprecedented and challenging times. Retail and hospitality businesses that weathered the extremely difficult COVID-19 pandemic economic slowdown continue to face staffing issues, forcing some to adjust opening hours due to a lack of staff. Island Health Authority is struggling with a critical shortage of primary care staff that has hampered emergency care on the North Island, particularly in Port Hardy and Port McNeill. Similarly, over the past year, BC Ferries Corporation has cancelled numerous sailings due to crew shortages.

Andre Gailits , an economist and researcher with MNP , says through COVID, there was an increase in younger people and families moving to the region. The pandemic also prompted an increase in retirement in the 55-plus age group. Though there’s no hard data set to draw from, Gailits says anecdotally, remote work is likely a factor in the Vancouver Island job market.

“If someone is working remotely for a company based in bigger urban centres like Vancouver and Toronto, then Vancouver Island may be a relatively affordable option,” Gailits says.

It also means remote workers are bringing their work with them when they move here and aren’t filling Vancouver Island job vacancies. So, with employment levels rebounding to near pre-pandemic levels, and with more than 60,000 people set to retire in the coming decade, businesses could continue to face recruitment challenges.

“Businesses might have to pay more to attract staff, and that could mean some closures,” he says. “It could be especially difficult for businesses looking to fill those front-of-house service positions.”

That statistics tell the story: every year Vancouver Islanders are getting older. How the business community adjusts to this reality remains to be seen.