It has never been more competitive than it is right now, as the economy re-emerges from the pandemic.
Yesterday, at Bennett Jones Spring 2021 Economic Outlook, David Dodge, former Governor of the Bank of Canada noted that, provided that the virus does not continue to mutate, the Canadian economy will grow quickly in the last half of 2021. He noted that, “Output would return to its pre-pandemic level by the third quarter of 2021, and back to its pre-pandemic trend level by the end of 2022”.
For Canada, Bennett Jones notes that we can expect that “growth will accelerate in the second half of 2021, before slowing during the next two years. Real GDP would grow 5.5% during 2021 (i.e., between the fourth quarter of 2020 and the fourth quarter of 2021), 2.6% during 2022, and 1.9% during 2023”.
Below are insights from the presentation that I’d like to share:
- With the post-pandemic focus on ESG (Environmental, Social, and Governance) standards, to address social values, it matters how we engage our stakeholders, including government. At Bennett Jones’ session, William Osler talked about genuine collaboration and respect for effected stakeholders. I took away from his presentation that companies thinking ahead develop relationships, engage from the very start, and this simplifies the approvals process. In my view, his presentation highlighted that industry and government need to be working together from the inception of a project.
- Canada’s residential real estate sector accounts for over 9% of the country’s overall economic output in terms of GDP as of March 2021. The rate of growth for residential investments have far outpaced economic growth during the pandemic. This increase in demand has put upward pressure on housing prices. David Dodge noted yesterday that high levels of housing investment are anticipated to continue through 2022. For me, his presentation called attention to the fact that the work of government, private developers, and non-profit groups to radically increase supply of rental housing has never been more critical.
- David Dodge noted that China’s economic output will grow by 22% compared to 2019 levels by the end of 2023. Serge Dupont noted the importance of Canada increasing its sophistication in the export process. As the rules of global trade are negotiated, our businesses need to adapt their business strategies and investment plans. In my view, businesses ability to deliver innovative plans that make intensive use of port and municipal industrial land requires policy consideration by government stakeholders like Port of Vancouver, Metro Vancouver, and municipalities.
- Dr. Indira Samarasekera noted that the automotive industry is increasingly disrupted by growing demand for electric vehicles (EVs). Vehicles with combustion engines have the potential to pollute soil and storm water and service buildings require advanced ventilation systems. In my experience, EV sales and maintenance projects challenge land use policies that restrict automotive-related activities to industrial lands. EV projects should not fall under the same regulations as vehicles with combustion engines.
Given how much disruption is afoot, in my view, it has never been more competitive than now.
Do you have a well-articulated strategy for how and when you will engage government in your projects?
When I worked in government, there were literally stacks of files on my desk. When forced to decide what file to review, I would look for the file that I could clearly understand, or the one that had the highest probability of success.
Today, most government staff have more files than ever with real estate’s ever-increasing prominence in the economy. Where in the pile is your project? Is it a priority for government? How can your genuine collaboration enable government staff to be confident in your project? How can that enable timely approvals?
As William Osler said yesterday, “You are proactive by being proactive”. It’s time to be proactive in how you engage with government and stakeholders on your project.
The next municipal election is in just over a year (October 2022). After that, we will see turnover in who is elected, policies will need to be updated, and staff who are disengaged by this will change jobs. The election will have an impact on your project requirements and timeline.
I recommend engaging early and often.
Who is looking after your approvals process? Are you positioned to achieve your goals? If you need help, please call me.
Tegan Smith, MCP, RPP, MCIP (she/her)
Principal, Channel Consulting
Channel is located on the unceded territory of the Coast Salish peoples, including the territories of the Sḵwx̱wú7mesh (Squamish) and Səl̓ilwətaʔɬ (Tsleil-Waututh) Nations.