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the total population living in rural areas across Canada increased by a healthy 2.7 per cent from 2001 to 2006.

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It's fashionable these days to sing the praises of urban living and forecast the death knell for rural communities in Canada. As someone who lives downtown in a mid-sized urban centre, I know firsthand the benefits of urban living. In addition to restaurants, grocery stores and coffee shops; my doctor, dentist, optometrist, pharmacist, barber and church are all within walking distance of my house.

Despite the country's a growing urban population, there isn't much evidence that rural Canada as a whole is in any sort of broad-based decline. From the census we know the total population living in rural areas across the country increased by a healthy 2.7 per cent from 2001 to 2006.

Using data from Statistics Canada's Labour Force Survey, we can track trends in rural and small town employment since 2006. Nationally, total employment (urban and rural) increased by 3.8 per cent from 2006 to 2010 as the economy made back the lost jobs during the 2007/2008 recession.

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Interestingly, employment in the rural fringe around urban centres increased at more than double the national growth rate from 2006 to 2010 (8.4 per cent). In fact, in many regions across Canada rural areas in close proximity to urban centres have been growing population and employment at a brisk pace. I believe there is an important symbiotic relationship between urban hubs and their rural periphery.

Even employment in small towns has outperformed urban areas with a 9.1 per cent growth rate from 2006 to 2010.

Only rural areas outside the influence of an urban hub (and not classified as small towns) witnessed an employment decline in recent years (-0.4 per cent from 2006 to 2010).

It appears the rural economy will continue to be critical to Canada's prosperity as a nation. This does not mean I'm playing down the importance of the country's urban-centred services economy. This must continue to be a fundamental economic driver.

But you can't eat a credit default swap or drink a fine bottle of derivatives. You can't fertilize your crops with Tweets and you can't fuel your car with management consulting.

Despite the proliferation of services, we still live in a world that requires hard goods: food, oil and gas, minerals and manufactured goods. That is where rural Canada has and will continue to add real value to the national economy. While rural Canada only makes up about 20 per cent of the national population, by my estimates it accounts for some 50 per cent of the value of total international exports (not including services).

It is critically important; however, for rural Canada to have a solid economic foundation. In Atlantic Canada the rural economy has been hit in recent years by declines in forestry, mining and manufacturing. This loss of core economic activity and employment income has led to negative secondary impacts across the economy (supply chain and services) and that has the potential to feed into a vicious cycle of decline and disinvestment.

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This has touched off a vigorous debate with urban advocates contending government should not prop up rural regions either by subsidizing industries or by keeping public services at unrealistic levels. Rural advocates counter by insisting they have a right to the same quality public services as everyone else.

In the medium to long term, rural Canada must have an economic reason to exist. Those who want to completely separate the capacity of rural Canada to generate tax revenues from the provision of public services will end up losing the argument. If the rural economy declines so eventually will rural public services.

The long term trajectory of global demand for our natural resources is upward. At the same time, in Canada there is increasing interest in sourcing local food and other products for environmental and logistical reasons. In addition, pervasive rural broadband means that many jobs can be performed from anywhere.

For these reasons and more, on the whole I am optimistic about the future for rural Canada.

Authors Note: There are some fairly big differences in urban/rural employment trends depending on where you live in Canada. Visit my blog to see the data on a province by province basis.

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 at www.davidwcampbell.com.

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