Although big corporations are often talked about as bad guys, almost everyone seems to want the kind of jobs they provide. These include high paid executives, senior professionals like accountants and lawyers, managers and the many people who actually produce the goods or services being sold. Such jobs tend to offer better pay, more benefits, more hours and more security than in smaller operations.
These kinds of jobs come tied to head offices. Compared to other larger Canadian centres, the Vancouver area does not have many. The number of head offices in Canadian metropolitan areas is not keeping pace with the population. Only in Calgary is that ratio increasing and this trend will be dampened by low energy prices. Even so, Calgary is way ahead of Vancouver. As the table shows, we are barely keeping up with Winnipeg.
Business and political leaders have long wished for more head offices in Vancouver. Not only do big companies create jobs, but they also pay a significant amount of taxes. They also are at the top of the go-to list when seeking funds for hospitals, sports teams, arts and culture and other philanthropy.
The Business Council of British Columbia (BCBC) is taking positive steps to attract Asian corporations to locate their head offices in the Vancouver area. The council is providing funding and in-kind support valued at $1,221,000 – the Federal Government, through Western Economic Diversification Canada, is providing funding of $1,951,750 and the Provincial Ministry of International Trade is providing both funding and in-kind support valued at $3,385,250 – into its HQVancouver campaign, which was launched last February. This initiative puts Vancouver in competition with cities around the world that are competing to get these and other firms and the benefits that come with them.
Vancouver has several positive factors in attracting companies, especially compared to many Asian countries. You can drink the water and breathe the air. Streets are clean and safe. There is political freedom and the rule of law. We keep the lights on and the Internet connected. We are also a beautiful place to live.
On these dimensions, we are way ahead of most Asian cities. Vancouver stands out for its natural beauty and for repeatedly showing up as one of the best places in the world to live. It is very conveniently located with direct flights to most major centres in Asia, the United States and Europe.
All these factors may not be sufficient to counteract some less positive elements and to attract the businesses we want away from all the other cities that would like to have them. Lack of industrial land has been a factor in discouraging new developments, although the problem has been reduced. If we consider the greater Vancouver area and not just the City of Vancouver, more land is available. Many of today’s businesses, especially in communications and technology, can operate effectively in what we would consider office space. Fewer and fewer businesses are the big, noisy, smelly industrial operations of the past.
Ease of doing business is important when attracting companies. How complex are the rules and regulations? Do they keep changing? How long does it take to get a license or anything else you need from government or other bodies? Vancouver compares with many Asian cities, but not necessarily with our competitors on this continent.
When corporations provide jobs, they need to fill them. We have an excellent system of universities, colleges and institutes that turn out high-calibre graduates, but we are still short of trades workers, technicians, technologists and STEM (science, technology, engineering and mathematics) graduates we need.
Graduates are, by definition, inexperienced. To thrive, companies need at least some experienced workers, not only in the fields mentioned, but also those with experience working with large organizations in a competitive global setting.
Both the federal and provincial governments have been taking steps to make it even longer and harder to get and keep such workers from outside the country. We are looking at people to fill positions that cannot be filled by Canadians at this time. Limiting access to people from outside the country will not create jobs for Canadians, but will discourage corporations who might have provided such jobs.
[i] Corporate headquarters in Canada, by Alex Gainer, the Fraser Institute. http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/articles/corporate-headquarters-in-canada-sept2011.pdf. The author used data from the Financial Post’s list of top 500 Canadian Corporations (by revenue), as well as Statistics Canada’s population estimates for the five Census Metropolitan Areas, to calculate the ratio.
Troy Media columnist Roslyn Kunin is a consulting economist and speaker.