Population is growing faster than the economy can handle, says National
Canada is caught in a “population trap” for the first time in modern history and needs to limit immigration to escape it, say economists with the National Bank of Canada.
A population trap, according to Oxford dictionary, is when the population is growing so fast that all available savings are needed to maintain the existing capital–labour ratio, making any increase in living standards impossible.
National Bank’s report joins the growing chorus of concern that the influx of newcomers over the past two years, many of whom are temporary workers or students, is too much for the economy to handle. Others caution there could be economic repercussions if Ottawa cuts off the flow too quickly.
Canada’s population grew by 1.2 million in 2023, a “staggering” amount when you consider that the next biggest surge was when Newfoundland joined the nation in 1949, says the report by National Bank economists Stéfane Marion and Alexandra Ducharme.
From a global perspective Canada’s population growth of 3.2 per cent last year was five times higher than the average of Organisation for Economic Co-operation and Development nations.
“We currently lack the infrastructure and capital stock in this country to adequately absorb current population growth and improve our standard of living,” said the economists.
No where is this strain more evident than in housing, they say.
National says the shortfall has reached a record of only one housing start for every 4.2 people entering the working-age population. The historical average is 1.8.
Government programs are underway to address this, but to meet demand and reduce housing inflation, Canada would need to double its housing construction capacity to about 700,000 starts a year, “an unattainable goal,” according to the economists.
“More worrisome is the fact that the decline is not simply due to a lack of housing infrastructure,” they said.
Excessive population growth is also impeding economic well-being, they argue. A fact they say is underscored by real gross domestic product growth per capita stagnating for six years in a row.
Capital stock, the physical and financial resources used to create value in an economy, has failed to keep up with population growth. Private non-residential capital stock has been falling for seven years, National says, and is now is at the same level as in 2012, while it is at a record high in the United States.
According to National calculations, capital stock per capita plummeted to about 1.5 per cent in 2023, compared with a high of almost 4.5 per cent in the 1960s.
“This means that our population is growing so fast that we do not have enough savings to stabilize our capital-labour ratio and achieve an increase in GDP per capita,” the economists said. “Simply put, Canada is in a population trap for the first time in modern history.”
If Canada is to improve its productivity, policy makers must set population targets against the constraint of our capital stock, they argue.
“At this point, we believe that our country’s annual total population growth should not exceed 300,000 to 500,000 if we are to escape the population trap.”
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Average asking rents in Canada hit a record high of $2,178 in December 2023, up 8.6 per cent from the year before. Over the past two years, rents have increased by 22 per cent or an average of $390 a month, said Urbanation in its January Rentals.ca report.
One-bedroom apartment rents increased the most, rising 12.7 per cent over the past year to reach an average of $1,932.
But British Columbia kept the distinction of Canada’s most expensive market for apartments. The average rent here was $2,500 in December, even after slipping 1.4 per cent lower in 2023. The year before B.C. apartment rents soared 18.5 per cent.
Nova Scotia RCMP say their investigation into two suspicious deaths earlier this month has concluded that one man died by homicide and the other by suicide.
The bodies of two men, aged 40 and 73, were found in a home in Windsor, N.S., on Sept. 3.
Police say the province’s medical examiner determined the 40-year-old man was killed and the 73-year-old man killed himself.
They say the two men were members of the same family.
No arrests or charges are anticipated, and the names of the deceased will not be released.
RCMP say they will not be releasing any further details out of respect for the family.
This report by The Canadian Press was first published Sept. 16, 2024.
The Canadian Press. All rights reserved.
For the first time in their history, members of the Cree community of Nemaska received a visit from a sitting Quebec premier on Sunday and were able to share first-hand the story of how they were displaced by a hydroelectric project in the 1970s.
François Legault was greeted in Nemaska by men and women who arrived by canoe to re-enact the founding of their new village in the Eeyou Istchee James Bay region, in northern Quebec, 47 years ago. The community was forced in the early 1970s to move from its original location because members were told it would be flooded as part of the Nottaway-Broadback-Rupert hydro project.
The reservoir was ultimately constructed elsewhere, but by then the members of the village had already left for other places, abandoning their homes and many of their belongings in the process.
George Wapachee, co-author of the book “Going Home,” said community members were “relocated for nothing.”
“We didn’t know what the rights were, or who to turn to,” he said in an interview. “That turned us into refugees and we were forced to abandon the life we knew.”
Nemaska’s story illustrates the challenges Legault’s government faces as it looks to build new dams to meet the province’s power needs, which are anticipated to double by 2050. Legault has promised that any new projects will be developed in partnership with Indigenous people and have “social acceptability,” but experts say that’s easier said than done.
François Bouffard, an associate professor of electrical engineering at McGill University, said the earlier era of hydro projects were developed without any consideration for the Indigenous inhabitants living nearby.
“We live in a much different world now,” he said. “Any kind of hydro development, no matter where in Quebec, will require true consent and partnership from Indigenous communities.” Those groups likely want to be treated as stakeholders, he added.
Securing wider social acceptability for projects that significantly change the landscape — as hydro dams often do — is also “a big ask,” he said. The government, Bouchard added, will likely focus on boosting capacity in its existing dams, or building installations that run off river flow and don’t require flooding large swaths of land to create reservoirs.
Louis Beaumier, executive director of the Trottier Energy Institute at Polytechnique Montreal, said Legault’s visit to Nemaska represents a desire for reconciliation with Indigenous people who were traumatized by the way earlier projects were carried about.
Any new projects will need the consent of local First Nations, Beaumier said, adding that its easier to get their blessing for wind power projects compared to dams, because they’re less destructive to the environment and easier around which to structure a partnership agreement.
Beaumier added that he believes it will be nearly impossible to get the public — Indigenous or not — to agree to “the destruction of a river” for a new dam, noting that in recent decades people have come to recognize rivers as the “unique, irreplaceable riches” that they are.
Legault’s visit to northern Quebec came on Sept. 15, when the community gathers every year to remember the founding of the “New Nemaska,” on the shores of Lake Champion in the heart of the boreal forest, some 1,500 kilometres from Montreal. Nemaska Chief Clarence Jolly said the community invited Legault to a traditional feast on Sunday, and planned to present him with Wapachee’s book and tell him their stories.
The book, published in 2022 along with Susan Marshall, is filled with stories of Nemaska community members. Leaving behind sewing machines and hunting dogs, they were initially sent to two different villages, Wapachee said.
In their new homes, several of them were forced to live in “deplorable conditions,” and some were physically and verbally abused, he said. The new village of Nemaska was only built a few years later, in 1977.
“At this time, families were losing their children to prison-schools,” he said, in reference to the residential school system. “Imagine the burden of losing your community as well.”
Thomas Jolly, a former chief, said he was 15 years old when he was forced to leave his village with all his belongings in a single bag.
Meeting Legault was important “because have to recognize what happened and we have to talk about the repercussions that the relocation had on people,” he said, adding that those effects are still felt today.
Earlier Sunday, Legault was in the Cree community of Eastmain, where he participated in the official renaming of a hydro complex in honour of former premier Bernard Landry. At the event, Legault said he would follow the example of his late predecessor, who oversaw the signing of the historic “Paix des Braves” agreement between the Quebec government and the Cree in 2002.
He said there is “significant potential” in Eeyou Istchee James Bay, both in increasing the capacity of its large dams and in developing wind power projects.
“Obviously, we will do that with the Cree,” he said.
This report by The Canadian Press was first published Sept. 16, 2024.
NEMASKA – For the first time in their history, members of the Cree community of Nemaska received a visit from a sitting Quebec premier on Sunday and were able to share first-hand the story of how they were displaced by a hydroelectric project in the 1970s.
François Legault was greeted in Nemaska by men and women who arrived by canoe to re-enact the founding of their new village in the Eeyou Istchee James Bay region, in northern Quebec, 47 years ago. The community was forced in the early 1970s to move from their original location because they were told it would be flooded as part of the Nottaway-Broadback-Rupert hydro project.
The reservoir was ultimately constructed elsewhere, but by then the members of the village had already left for other places, abandoning their homes and many of their belongings in the process.
George Wapachee, co-author of the book “Going Home,” said community members were “relocated for nothing.”
“We didn’t know what the rights were, or who to turn to,” he said in an interview. “That turned us into refugees and we were forced to abandon the life we knew.”
The book, published in 2022 by Wapachee and Susan Marshall, is filled with stories of Cree community members. Leaving behind sewing machines and hunting dogs, they were initially sent to two different villages, 100 and 300 kilometres away, Wapachee said.
In their new homes, several of them were forced to live in “deplorable conditions,” and some were physically and verbally abused, he said. The new village of Nemaska was only built a few years later, in 1977.
“At this time, families were losing their children to prison-schools,” he said, in reference to the residential school system. “Imagine the burden of losing your community as well.”
Legault’s visit came on Sept. 15, when the community gathers every year to remember the founding of the “New Nemaska,” on the shores of Lake Champion in the heart of the boreal forest, some 1,500 kilometres from Montreal. Nemaska Chief Clarence Jolly said the community invited Legault to a traditional feast on Sunday, and planned to present him with Wapachee’s book and tell him their stories.
Thomas Jolly, a former chief, said he was 15 years old when he was forced to leave his village with all his belongings in a single bag.
Meeting Legault was important “because have to recognize what happened and we have to talk about the repercussions that the relocation had on people,” he said, adding that those effects are still felt today.
Earlier Sunday, Legault had been in the Cree community of Eastmain, where he participated in the official renaming of a hydro dam in honour of former premier Bernard Landry.
This report by The Canadian Press was first published Sept. 16, 2024.
The Canadian Press. All rights reserved.
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