Canada West Foundation Blog

By: Robert Roach, VP, Research

In an article in today’s Globe and Mail, John Ibbitson argues that "One question will define national politics in our time: Are Western Canadians prepared to sacrifice for the sake of the nation, now that Ontario is less able to help?"

In addition to incorrectly implying that western Canadians chipping in to help the rest of the country is a new phenomenon, the question is the wrong one to ask.

The question Canadians should be focused on is how to ensure that the nation successfully adjusts to the evolving global economy. It is a mistake to start with a negative question that assumes the need for "sacrifice"—whatever that means—or puts pressure on the nation’s fault lines by immediately assuming that regional wealth redistribution is the solution to central Canada’s problems. This is the old way of thinking and this is not the time to bring it back.

The West knows what it is like to have its interests and economic prospects ignored and how damaging this is to the country and its potential. It will not, therefore, make the same mistake that central Canada has made in the past and be blithe to the blight of the other regions.

The West gets it—all regions benefit when all regions are heard and respected. The West will do its part, as it always has.

Ensuring Canada’s prosperity will happen naturally as the western economy continues to provide jobs and returns on investment. It will also happen at the political level through the equalization program, a strong tax base in the West that helps fill the national treasury, and by ongoing efforts by Canadians to ensure strong regional representation within the national government.

Ultimately, however, the economic recovery of Canada's industrial heartland will depend on the efforts of individual Canadians and their ability to harness the changes happening at a global level.

By: Michael Holden

The 2008-2009 recession and the still-fragile economic recovery in western Canada have amplified the urban-rural divide in regional labour markets. That large cities have been responsible for the majority of job creation in the West is hardly a recent development—the region’s nine Census Metropolitan Areas (CMAs) [1]have accounted for nearly 80% of all job growth in western Canada since 1997. However, the gap in employment growth between those nine cities and less populous areas has widened in recent years.

Not only did the West’s largest cities, on average, emerge from the recession relatively unscathed, but they have since posted much stronger job gains as well. From its pre-recession peak (November 2008) to the lowest point of the economic downturn (August 2009), western Canada lost just over 110,000 jobs. Even though our nine CMAs were home to about two thirds of all employment in the region, they accounted for just one third of those losses. Conversely, when the region began to add new jobs, it was mostly in the large cities. Since August 2009, there have been 119,000 positions created in western Canadian CMAs compared to 42,100 elsewhere in the region. In fact, smaller urban centres and rural areas have, on the whole, yet to recover their pre-recession employment levels. Meanwhile, the CMAs collectively did so in August 2010 and have been expanding ever since.

Of course, this is not to suggest that all the region’s big cities have been engines of job creation. Two cities—Vancouver and Edmonton—have been the primary drivers of employment growth, creating more jobs post-recession than all other CMAs combined. Regina and Kelowna have also posted impressive job gains, although their smaller population base means their affect on regional job creation is somewhat muted. At the other end of the spectrum, Calgary, Victoria and Abbotsford-Mission have all seen strong employment growth within the past 12 months, but there are still fewer people working in those cities today than before the recession began. In Saskatoon, there have been only modest job gains in recent months and employment remains well below pre-recession levels.

Even though most new jobs in western Canada are being created in big cities, this does not mean that employment prospects elsewhere in the region are necessarily bleak. In Manitoba, for example, employment growth outside of Winnipeg has been a lot stronger than in the province’s largest city since even before the recession began. Similarly, job creation outside of Alberta’s major urban centres has kept pace with the 4.3% average employment growth rate in Edmonton and Calgary over the past two years.

Moreover, as much as employment in western Canada’s CMAs has been rising, this increase has been counterbalanced by strong population growth; through the combined forces of urbanization, immigration and interprovincial migration, people continue to flock to our cities. Employment gains in our major centres since August 2009 has been just sufficient to absorb the growth in the urban working-age population in western Canada. Meanwhile, while job creation has, broadly speaking, been slower elsewhere in the region, so too has population growth.

These concurrent trends have created a favourable balance in western Canadian labour markets. While there remain pockets of weakness in some areas, the general situation is one where excess labour capacity in the region is moving to our major cities to absorb the growing demand for workers. As a result, the unemployment rate in urban and rural areas in western Canada has been virtually identical for several years.

1. In order of population size, western Canada’s nine Census Metropolitan Areas are: Vancouver, Calgary, Edmonton, Winnipeg, Victoria, Saskatoon, Regina, Kelowna and Abbotsford-Mission.

by Robert Roach, Senior Researcher and
Director of The West in Canada Project

Like Canadians in general, western Canadians tend to be uncomfortable when it comes to tooting their own horn. It is worthwhile, therefore, to take a moment and celebrate some of the incredible strengths possessed by the West as outlined in the latest edition of the Canada West Foundation’s “State of the West” report.

Western Canada is often described as a small economy. The way we talk, you would think the region’s economic output was on par with Estonia or some other tiny place (no offence to our Estonian friends, of course). In fact, if western Canada is placed on the list of the world’s largest national economies, it would be eighteenth (Canada is eleventh).

Western Canada’s economy is much smaller than, for example, the US or German economies, but it is hardly a bit player on the world stage. At well over half a trillion US dollars in 2008, western Canada’s economic output is nothing to snuff at.

Western Canada is also a major player when it comes to international trade. The West exported just over $180 billion US dollars worth of goods in 2008. This would place it twenty-sixth on the list of the world’s leading export countries (Canada is once again just out of the top ten in eleventh spot). We may not be the Sidney Crosbie of international trade, but we are still playing in the big league.

When it comes to the natural resources the global economy is hungry for, western Canada is home to some of the largest reserves and industries in the world. Alberta’s oil sands place it second only to Saudi Arabia’s oil reserves and Saskatchewan is one of the world’s largest suppliers of uranium and has the world’s largest reserve of potash (a key ingredient in the fertilizer that helps feed the world).

The region’s stock of human capital is also very impressive with over 1 in 5 western Canadians holding a university degree. When university and college education is combined, the western provinces have higher education levels than places like Germany, France, the UK, and Australia. BC’s education level is second only to Ontario’s and is higher than in both the US and Japan.

Western Canada is a magnet for international and domestic migrants. BC’s net international migration rate is more than double the average for the European Union. Between 1971 and 2008, 671,543 more people moved to the West from another part of Canada than left. Vancouver and Calgary appear on the Mercer ranking of the cities with the best quality of life and the urban West is growing at a nice pace.

Western Canada is a cosmopolitan, dynamic, growing, economically powerful and highly educated place. It is ideally situated as Canada’s gateway to the growing economies of Asia, it is blessed with abundant natural resources and it is a major driver of the Canadian economy and, increasingly, of the Canadian identity.

None of this is meant to gloss over the many challenges faced by the region. If the West is to take full advantage of its current assets, it has a lot of work to do. The global economy is getting more competitive, not less. Social challenges such as the high unemployment and low education levels that dog the West’s Aboriginal population and the constant need to innovate and step up our economic game remain critical concerns.

Nonetheless, it is worth stepping back from both the day-to-day and long-term challenges and celebrate our strengths. Too much modesty can result in missed opportunities. Western Canadians need to see that their region has the skills to compete in the big league and recognize the importance of honing those skills so they can continue to do so.

Download State of the West 2010.

Robert Roach is Senior Researcher and the Director of the Canada West Foundation’s The West in Canada Project. Canada West Foundation is the only think tank dedicated to being the objective, nonpartisan voice for issues of vital concern to Western Canadians.

This last month celebrations were held for the 125^th anniversary of two significant and unrelated events to western Canada: the creation of Banff National Park and the Métis Northwest Rebellion led by Louis Riel.

If you aren’t familiar, here’s a little bit of the history:

• Banff National Park was created in 1885, the first national park in Canada and the third such park in the world. The park was created to protect the Banff hot springs, which had been discovered by two railway workers in 1883 and were the focus of conflicting commercial plans. Instead of allowing the hot springs to be developed, John A. Macdonald declared the area a protected space. Banff is now one of the primary tourist destinations in Canada and the world, receiving almost 5 million visitors a year.
• The Northwest Rebellion was a brief and, ultimately, unsuccessful uprising by the Métis people. It was some 15 years after the Red River Rebellion, but the issues were much the same. The Métis people were concerned about the distribution of land following the influx of immigrant settlers, the effects of poverty and the fate of the buffalo, which were being hunted to extinction. There were numerous skirmishes and battles—including the Battle of Batoche, where Métis people gather annually in July to celebrate their culture and heritage—that resulted in the defeat of the Métis people and the hanging of Louis Riel.

Both of these events are significant to the character and development of western Canada and for this reason alone they are important to remember. It also strikes me that the larger issues they represent are still ones that we are dealing with as a region today. Namely, we are still trying to figure out how to balance environmental conservation with economic development, the rights and roles of aboriginal people in western Canada and everything in between.

Today, Canada’s environmental record is one of the worst among OECD countries and the West contributes substantially to that record. Across 25 environmental performance indicators used by the OECD, Canada is not among the five best countries on any measure and is among the five worst on 17 of them. We have a resource-based economy that relies on high energy and water inputs and extraction techniques that are detrimental to environmental conservation. There is an ongoing debate between industry, governments, NGOs and citizens on precisely where the balancing point between economic development and environmental conservation should be.  One of John A. MacDonald’s legacy from this debate was the creation of Banff National Park. I wonder if we can hope to be as successful in carving out a positive legacy from today’s environmental debate?

Similarly, across every measure of social and economic well being, the Aboriginal population in western Canada fares poorly compared to the general populace. According to census data the Aboriginal population is three times as likely to not have a high school education, more than twice as likely to be unemployed, roughly half of all Aboriginals survive on an annual income of $10,000 or less, over 20% report some form of physical or sexual abuse, they are much more likely to be incarcerated, have a diabetes prevalence rate of 3-5 times the general populace, and there are many other equally depressing statistics.  Many of these statistics reflect the symptoms of poverty, the same thing Aboriginal leaders were concerned about in 1885.

My point is that we have been dealing with the similar issues around the environment and Aboriginals for 125 years. While we pause to recognize these historic events, now is perhaps also a good time for new, out of the box, thinking and creative approaches. We should be looking very carefully at the policies and programs of other countries (e.g., Australia and New Zealand) with similar challenges to find and implement their best practices. Maybe we should create a policy platform to educate and then employ aboriginal people in environmental conservation. That might help both the social conditions of Canadian aboriginal peoples and our environmental record.

Whatever we do, we need to get serious about it now, 125 years seems long enough.

Posted by: Shawna Ritchie

The West Will Not Grow Its Way Into Greater Importance in Canada

Here in the West, you occasionally hear people talking about the region growing its way out of what many see as our second class status in Confederation. Ontario and Quebec dominate national politics because way more people live there than in the West. The combined population of Ontario and Quebec (21 million) is double that of the West (10 million). Strong population growth in western Canada will cut deeply into this advantage—or so the theory goes.

The problem is that the numbers do not support this theory.

Western Canada is currently home to 30.8% of Canadians. On the one hand, this means that the West is a significant part of the Canadian family; on the other hand, it remains a minority within the country. What’s more, the region’s share of the national population is not projected to change much over the next 25 years.

Some History

Western Canada’s population was very small in 1901 at just under 600,000 people—only 11.1% of Canadians called the West home at that time. Massive waves of immigration caused the region to grow at a rapid pace. By 1931, the West had over 3 million residents and accounted for just under 30% of the national population. The region grew by a whopping 410% between 1901 and 1931 while the rest of Canada grew by a more modest 54%. Saskatchewan, for example, jumped from 91,000 people to 492,000 in the 10 years between 1901 and 1911.

The West’s demographic fortunes took a turn for the worse during the Great Depression. The region continued to grow (though Saskatchewan saw its population shrink), but the rest of Canada grew faster. Hence, the West’s share of the national population dropped to 26.4% as of the 1961 Census. Ten years later, the West was once again growing faster than the rest of the country and its percentage of the national population began to rise. This time, however, the rise has been much less dramatic than in the first part of the 20th Century. In terms of population growth, Canada is currently tilted west, but the incline is modest rather than steep.

About a Third Today, About a Third Tomorrow

Statistics Canada’s projections do not indicate a radical shift in the relative demographic weight of the West in Canada. The West is currently home to 30.8% of the national population and the projections show that this number will be between 32% and 34% by 2036. Barring major unforeseen changes in immigration, fertility, internal migration and other factors, the West is expected to be home to roughly the same percentage of Canadians as it is today. Our share will be slightly higher, but not much.

Although the time lag is long (the current planned redistribution of seats in the House of Commons will not take place until well after the 2011 Census results are in), the West’s slightly higher share of the national population in 2036 should translate into a few extra seats in the House of Commons. But if the plan is to wait until the West has the demographic weight to have more influence on national politics and policy, it is likely to be a long time before this happens (if it ever does).

This another reason why it makes sense to continue to work toward better representation of all regions within the national government regardless of their population size.

The demographic and economic trends that have shaped and will shape the West are collected and analyzed in the forthcoming edition of the Canada West Foundation’s State of the West 2010 report. Chapters from the report will be released on the Canada West Foundation website over the summer with the full report available in September.

Posted By: Robert Roach