VANCOUVER—The scenic village of Canal Flats at the base of the Canadian Rockies is undergoing a “brave experiment.”
It’s been a year since the remote town of 800 people in southeastern B.C. began transitioning from a forestry-dependent economy to tech and trades with the launch of the Columbia Lake Technology Center.
The innovation hub, which aims to attract technology and manufacturing businesses, is located inside the skeleton of a century-old mill — once the town’s main employer. The buildings that housed log sorters and giant saws are now home to high-tech electrical equipment and cranes for lifting shipping containers filled with hundreds of data servers.
One of the centre’s tenant companies, PodTech, manufactures transportable data centres used for cryptocurrency mining and other purposes. Another tenant is the Bid Group, which manufacturers equipment like steel conveyors for forestry companies.
The leaders of Columbia Lake say the centre proves that it’s not only possible to run a tech company in a rural area but it’s actively beneficial. By following its example, they hope, other resource-based communities will find a way to survive economic upheaval.
In recent months, there’s been a slew of mill closures and production cutbacks across British Columbia. In April, one of the province’s largest forestry companies, Canfor Corp., cancelled nearly three per cent of its output, citing “low lumber prices.” The firm told Star Vancouver at the time that it’s having to slow work at every mill in B.C. except one, near Creston. More temporary closures ensued in the following months.
Earlier this month, Louisiana-Pacific Corp. announced an indefinite shuttering of its mill in the northeastern city of Fort St. John, affecting about 190 workers.
Canal Flats had nothing to lose after Canfor closed the town’s sawmill in November 2015, putting 75 people out of work, said entrepreneur Jean-Marc La Flamme. More than 80 others lost their jobs earlier that year. It would have been a “ghost town” if it didn’t look for an alternative.
La Flamme moved from Toronto to the mountainous city of Revelstoke, B.C., 10 years ago, bringing along 20 years of experience in web development to help the city adapt to the digital economy. He was also an adviser for the Kootenay Association for Science and Technology, which helped conceive the Columbia Lake centre.
If the “brave experiment” in Canal Flats succeeds, the model will benefit many more communities in B.C. that are watching the last days of a resource-dependent economy fly by, La Flamme said.
Though 75 layoffs might sound small, it was “devastating” for such a small community, said Lorri Fehr, CEO of the centre. It has 70 workers in the trades and tech fields such as welders, electricians, carpenters and specialists in data servers and artificial intelligence.
“It was really hard on families. It was hard on the economy. People had to leave, people had to search for jobs, and it became kind of sad,” she said.
The land the technology centre sits upon is part of 1,000 acres bought by Lorri’s brother, businessman Brian Fehr, after the sawmill closed in 2015.
When the technology centre opened, the community, businesses and Premier John Horgan had high hopes of a successful transition out of a resource-based economy into “a new era” of economic development data centres and new manufacturing plants.
Up until that point, most of the growth and expertise in the tech sector was concentrated in cities because of the presence of high-speed internet and start-up accelerators, Lorri Fehr said. The hope was that Canal Flats could carve a way out of its resource dependence by harnessing its abundance of renewable energy and cheap real estate to grow the tech sector.
The village of Canal Flats is located at the headwaters of the Columbia River, which runs southward into the U.S. Numerous hydroelectric dams were built in the Columbia Basin from the ’60s to the ’80s due to the river’s “large annual discharge and relatively steep gradient,” according to BC Hydro. The dams on the river and its tributaries “produce more hydroelectric power than on any other North American river.”
The servers used by technology companies need a huge amount of electricity to operate, Fehr explained. The hydroelectricity in Canal Flats is a green alternative to other sources like coal, she added.
Out of the construction of the dams, the provincial government set up a fund that would prioritize economic and community development for the towns that were impacted. It was through the Columbia Basin trust fund that Canal Flats got its superb internet infrastructure.
Brian Fry, a co-founder of the centre who also runs PodTech, said that while recruiting he’s had to fight the “myth” that all rural areas have poor internet connections.
“The reality is the internet both in the town and on site is world-class because of the infrastructure done through the (Columbia Basin) trust fund in building the fibre optic,” Fry said.
In addition, some of the challenges employers encounter in urban centres are eased in smaller towns, where there’s less competition for workers feeling the squeeze of high-cost living.
“Many of the tech companies that have trouble recruiting are struggling because they can’t pay a high enough wage for them to live, especially in Vancouver or Victoria,” Fry said.
Canal Flats, he said, is drawing interest from employers whose workers are looking to raise families in a community where they can afford a home.
Wide-open spaces are also attractive for companies struggling to find manufacturing and commercial space, said Fehr. In 2018, commercial vacancies in Metro Vancouver dropped to an “all-time low,” to about 1.4 per cent by year’s end, according to the commercial real-estate firm CBRE.
One company eager to open offices in small towns is Traction on Demand, a consulting and app development firm in Burnaby that opened an office in Nelson earlier this year.
Greg Malpass, CEO of the consulting firm, said the company set up a small-town initiative as workers were leaving urban centres in search of affordability and a better lifestyle for their families.
The company has a policy of supporting employees that want to relocate by setting up an office if at least five staff members are interested in a particular location. Malpass said some new office locations include Dayton in Ohio and Nelson and Vernon in B.C.
“There’s also somebody on the Island; that’s likely to come together in the Duncan area,” he said.
Although Malpass and Fry have discussed the possibility of setting up shop in Canal Flats, there hasn’t been a commitment from the Burnaby company thus far.
La Flamme is hopeful that the Canal Flats model could be replicated all over B.C.
“We need to glean on the experiments from Canal Flats and say, ‘That’s awesome, here’s the model.’ PodTech and Columbia Lake Tech Center stand to gain from basically perfecting that model and shipping that out to communities around the world.”
With files from David P. Ball and the Canadian Press