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A terasse on Richmond Street Thursday, Aug. 2, 2007 in Charlottetown P.E.I. (CP PHOTO/Jacques Boissinot) CANADA (JACQUES BOISSINOT/Canadian Press)
A terasse on Richmond Street Thursday, Aug. 2, 2007 in Charlottetown P.E.I. (CP PHOTO/Jacques Boissinot) CANADA (JACQUES BOISSINOT/Canadian Press)

Economy Lab

Atlantic Canada needs more urban growth Add to ...

Atlantic Canada is one of the most rural jurisdictions in the developed world. On Prince Edward Island, some 54 per cent of the population lives in rural areas (2011) and in New Brunswick rural areas account for nearly half the provincial population (48 per cent). In Nova Scotia and Newfoundland and Labrador, the rural population accounts for more than 40 per cent of the total population. Across Canada, less than 19 per cent of the population lives in rural areas (as defined by Statistics Canada).

One of the great debates in Atlantic Canada relates to how the region should address its urban-rural divide. This divide has broad economic, demographic and social dimensions. The rural population has much higher unemployment and considerably lower average incomes. Due to a chronic out-migration of younger population, rural regions are also increasingly much older compared to the urban centres.

A timely illustration of the urban-rural divide is the difference in utilization of the Employment Insurance (EI) program. According to the 2010/2011 Employment Insurance Monitoring and Assessment Report published by the Canada Employment Insurance Commission, there is a significant spread between the rate of EI usage in rural areas compared to urban areas across Atlantic Canada.

In St. John’s 19.8 per cent of all earners received EI benefits in 2010/2011 – not much higher than the national average. Across the province, however, a full 45.7 per cent of earners received EI benefits.

The same pattern can be found in the rest of Atlantic Canada. In Halifax, only 14.8 per cent of earners received EI benefits in 2010/2011 while nearly 34 per cent of earners in eastern Nova Scotia availed themselves of the program. In New Brunswick, 19.8 per cent of Moncton-Saint John-Fredericton workers received EI benefits in 2010/2011 compared to over 40 per cent in the mostly rural region of Restigouche-Albert.

Contrast this with the rest of Canada. In the EI region of Northern Ontario, 21.1 per cent of workers received benefits compared to 15.2 per cent in the Toronto region (a less than six percentage point spread). Thirteen per cent of earners in Winnipeg received EI benefits compared to 19 per cent in Northern Manitoba.

Many people point to high unemployment and EI usage and say Atlantic Canada needs to hasten the migration of population out of its rural areas. Think tanks in Alberta would prefer this population to move to western Canada and those in Halifax encourage migration to Atlantic Canada’s urban centres.

I have a slightly different view. In my opinion, the problem is that Atlantic Canada hasn’t focused enough on growing its urban centres and this has very little to do with the emptying out of rural areas.

Across Canada, the rural population has not been in decline – in fact it has grown by 950,000 people since 1951. Over the same period, Canada’s urban population grew by 19.5-million people. In other words, Canada’s urbanization has not come by reducing its rural population but by dramatically increasing its urban population.

Contrast that with New Brunswick. The rural and urban population since 1951 increased at roughly the same pace (well below the growth rate across Canada).

If New Brunswick had witnessed the same level of urban growth as the rest of Canada since 1951, there would be well over a million people living in the province in 2011 and more than 65 per cent of them would be located in urban areas. If the urban population had grown as fast as the top quartile of urban centres across Canada, there would be 1.3-million New Brunswickers and 72 per cent of them would be urbanites.

If New Brunswick had grown its urban population, the province would be a profoundly different place today with a stronger economy, far more immigration and a much better fiscal situation. I would argue the same argument can be made for the other three Atlantic Provinces.

The lesson of the past 60 years should be learned in this generation. Atlantic Canada needs a robust and sustained urban growth agenda. If we want the entire region to move from a moribund and struggling economy to a dynamic and growing one, the bulk of the growth must happen in its urban centres.

I am not downplaying the challenges in rural areas of Atlantic Canada. These challenges are important and we need long term solutions but if they become a distraction to fostering urban growth, it jeopardizes the potential of the whole region.

Click here to view a recent presentation outlining my case for urban growth in New Brunswick.

David Campbell is an economic development consultant and columnist based in Moncton, New Brunswick. He also authors a daily blog on economic issues in Atlantic Canada which can be found atwww.davidwcampbell.com.

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