BC’s scheme to lure more Asian corporate offices to Vancouver could help offset the city’s loss of head offices – and the related high-paying jobs, according to local experts.
Premier Christy Clark’s recent throne speech promised a new organization geared at making “Vancouver and Canada’s West Coast the hub for Asian and South Asian corporate offices and investment activity.”
As of press time, no details had been released about the organization. But local business experts are optimistic that, if designed right, the plan could help Vancouver compensate for head offices lost to Toronto and elsewhere.
And the need is clear, says Greg D’Avignon, president and CEO of the Business Council of BC.
“A lot of places have lost head offices. But not only have we lost head offices – we’ve disproportionately lost the [high-paying] jobs that go with them.”
D’Avignon said Metro Vancouver’s $67,000 median household wage is the third lowest of Canada’s metropolitan centres.
“Yet we’ve got the highest cost of living, largely driven by housing prices, which are 8.4 times income in B.C.,” he said, noting that in many jurisdictions, housing is only four to five times income.
D’Avignon said Vancouver’s location, infrastructure and cultural ties to Asia make the city attractive to Asian companies looking to set up North American offices as Baosteeland China Southern Airlines have recently done.
D’Avignon said that, by proactively courting such companies, Vancouver could not only land itself new corporate offices – but also help develop supporting businesses such as IT or professional services providers.
Kai Li, a finance professor at UBC’s Sauder School of Business, agreed that the plan could generate benefits for Vancouver.
“Vancouver is not a big corporate headquarters in Canada, so it would be a great idea to attract Asian interest.”
Li added that Vancouver’s pitch should be well received in Asia.
“Given the location of Vancouver, the large number of immigrants from Asia and the [city’s] great reputation, it’s definitely going to draw some interest.”
Bruce Flexman is president of AdvantageBC, an industry-funded non-profit organization that promotes B.C. as a location for international business.
He said the government’s plan to chase Asian corporate offices complements AdvantageBC’s mandate and would increase the fiscal resources for attracting new foreign businesses to B.C.
Joseph Caron, a distinguished fellow with the Asia Pacific Foundation of Canada, said the challenge in attracting Asian corporate offices will be to identify ways Vancouver can stand out from the competition on bottom-line corporate decisions.
“You can’t go to the CEO and say, ‘We’re going to City X – it’s not a financial centre, but it has a great view,’” he said. “You’ve got to offer things that matter.”
Li cautioned that Vancouver doesn’t offer much of a business network to Asian newcomers.
“They’d still have to travel to Toronto or Calgary to do business.”
Li added that Vancouver would also need to ensure newcomers played by Canada’s rules and were substantive businesses.
“Some Asian companies are good at using a shell company while most activity is still back in Asia,” she said.
NDP attacks plan’s credibility
Jenny Kwan, NDP critic for small business, technology and economic development, says the government’s scheme to attract Asian offices is an election ploy.
“[The BC Liberals] have travelled to Asia, they’ve brought trade missions there, etc., and in none of their objectives have they ever talked about trying to attract corporation offices.
“Now we’re 10 or 11 weeks out to an election, and they all of a sudden say that this is what they want to achieve. So I think there’s a credibility gap here in terms of that claim.”
She added that a plan to lure the offices has yet to be released.
