British Columbia capitol

I would think it was placed as Capital for strategic purposes, as it is a very large city. Victoria is on the islands, right?

With Victoria being population of 80,000 - and Vancouver 600,000 - it is easy to assume it was placed as Capital in the game for the strategic production etc

This is very true, but they did not make them exactly true to life. For example, on the new map, Las Vegas is not the capital of Nevada, but it was just the most logistical city to put it in.