Port Alice

You can’t talk about Port Alice without talking about the pulp mill. For over a century, the mill was the town, a classic company town built on the rugged west coast of northern Vancouver Island. When it shut down for good, it fundamentally changed the community’s economic DNA. We see the fallout in the numbers today. An unemployment rate of 14.5% and a median household income of $59,200 are a world away from the major urban centers. The economy still leans on its old roots, with manufacturing and forestry accounting for nearly a quarter of all jobs. That’s a vulnerability in our book, as any downturn in the resource sector hits towns like this first and hardest.

What’s left is what was always there: the geography. Port Alice is wedged onto a mountainside overlooking Neroutsos Inlet, a gateway to the wildness of Quatsino Sound. This is the primary draw now. The economy is trying to find its footing in eco-tourism and outdoor recreation, capitalizing on the fishing, kayaking, and wildlife that make this coast remarkable. It’s known as Canada’s Sea Otter Capital for a reason. People who buy here aren’t looking for urban amenities; they’re buying into a quiet, self-reliant lifestyle. The community is small, with a population of 739, and tight-knit.

While the population has grown by over 11% since 2016, the demographic profile tells the real story. With a median age of 58.8 and a third of the residents over 65, it’s an older community of long-term residents and retirees, not a bustling hub for young families. The housing stock reflects its history. It’s a mix of single-family homes (53%) and row houses (29%) likely built during the mill’s operational decades, with a surprising 17% of units in low-rise apartment buildings. There isn’t significant new development, and the challenging terrain limits expansion.

From a lending perspective, Port Alice is a clear example of a market where we need a substantial equity cushion. The appeal is strong for a specific type of buyer—retirees, avid fishermen, or people seeking a remote lifestyle—but that buyer pool is inherently small and specialized. In a worst-case scenario, our exit strategy has to account for a longer sales timeline. We’re estimating 6 to 9 months on market and the real possibility of a 15-25% price reduction to attract a buyer. The local economy simply lacks the diversification to absorb shocks.

For these reasons, our risk assessment in Port Alice is conservative. We will look at deals here, but we’re underwriting to a maximum loan-to-value of 60.0%. We need to ensure that if we ever have to take a property back, there’s enough equity to protect our investors’ capital through a protracted sale in a thin market. A borrower needs to be strong, and the property needs to make sense for the lifestyle buyer who values this unique, remote corner of the island.