OUT ON A LIMB: Catch a wave and we’re sitting on top of the world

Consider Campbell River one big experiment in Keynesian economics over the next few years

Consider Campbell River one big experiment in Keynesian economics over the next few years.

Here we have a community that used to be driven by big resource production: huge pulp and paper output, massive amounts of lumber, tons of salmon and truckloads of valuable minerals. Salmon Capital of the World? Campbell River was a resource extraction capital.

No longer. The mines are still producing, albeit at a reduced rate, but the lumber’s gone, the pulp and paper output is being dismantled as we speak and the fish are depleted.

The only thing replacing any of these big-money industries is salmon farming and after Wednesday’s Cohen Inquiry findings, don’t expect it to reach the potential output it could have.

But despite that, the employment outlook for Campbell River over the next few years could be pretty rosy.

That’s because two massive construction projects are about to get underway and will generate – and I quote – a “jobs tsunami.” A massive wave of tradespeople, labourers, technicians and, inevitably, engineers will wash upon our shores as work gets underway on the new hospital and the billion-dollar John Hart Dam upgrade by BC Hydro.

It will be one great big experiment in government stimulus. Invest government money in infrastructure and the spinoff into the economy is massive, the theory goes. Well, we’re going to prove or disprove that.

Without a doubt, during the life of these construction projects, the Campbell River economy will boom. All those workers – 400 or so on the hospital alone – will result in rental income, property purchases, grocery procurement and everything else to help a modern working Canadian get through their life. The projects will require supply purchases, much of which will be local. For every dollar invested in the projects, the spinoff will be multiplied two, three or more times.

The question will be, of course, does it have any staying power beyond the life of the construction projects? The curious thing about this economy is it’s one built on a one shot deal. The unique thing is it’s a two-shot deal in this case thanks to a lucky convergence of aging infrastructure – a hospital that’s too small and out of date plus a dam that’s too old and doesn’t meet modern earthquake safety standards. Being old and rundown worked in Campbell River’s favour this decade.

But what happens after? Will this stimulate more permanent economic activity or do we slip into being a sleepy economic backwater? Will the spinoffs reach a critical mass  that attracts investors and services that can feed on themselves rather than on these two projects? Time will tell.