Vehicles drive along main street in Eganville, Ont. on May 24, 2018.Fred Lum/the Globe and Mail
Scott Stirrett is the founder and chief executive of Venture for Canada, a charity devoted to fostering entrepreneurial skills.
In Suzanne Collins’s The Hunger Games, a stark division exists between the Capitol’s opulence and the struggling districts, vividly portraying a world rife with both economic and political disparities. This metaphor is a cautionary tale for Canada, where a growing economic divide between urban and rural areas precipitates deep rifts.
In the past decade, Canada’s largest metropolitan areas – Montreal, Toronto, Vancouver, Ottawa-Gatineau, Calgary and Edmonton – have become increasingly prosperous. While these regions are home to 47 per cent of Canada’s population, they created approximately three-quarters of all new jobs between 2016 and 2020. In stark contrast, some rural and remote communities have not recovered employment from the 2008-2009 global recession. This economic disparity is more than a statistic; it’s a catalyst for a widening political divide, threatening the fabric of our country.
Rural inhabitants, who often face limited opportunities, can feel neglected by policymakers in urban centres. This sometimes leads to frustration and anger, which contributes to heightened political polarization.
Canada’s current political divides are largely based on the rural-urban split. In the 2019 Canadian federal election, the median population density for the 157 Liberal ridings was more than 38 times higher than that of the 121 Conservative ridings. Research by professors at the University of Calgary and Western University found that there is “clear evidence that Canadians are currently experiencing the most profound urban-rural divide in support for the major political parties in the country’s history.”
Around the world, similar economic disparities have fuelled resentment, tension, and division, leading to political upheaval. As Mirko Bibic, CEO of BCE Inc., writes, “place-based disparities are not only an issue in terms of our social cohesion and political stability, but they may also undermine the fundamental Canadian objective of broad-based economic inclusion and opportunity.”
Challenges in smaller communities create a cycle of economic and political marginalization that is difficult to break. Youth migrate to cities for opportunities, leaving aging populations and declining local economies behind, which in turn diminishes political representation of these regions, meaning rural regions have progressively less influence in policymaking.
The rural-urban economic imbalance also disproportionately affects Indigenous Peoples, as 60 per cent reside in rural and remote communities. Catalyzing economic growth outside of major urban centres is essential to ensuring Indigenous Peoples can meaningfully participate in Canada’s economic benefits.
The federal, provincial, and territorial governments, alongside the private sector, have crucial roles to play. To bridge this divide, policymakers must understand that solutions suitable for urban areas may not be effective in rural contexts. We need tailored strategies that account for the distinct economic and political landscapes of these communities. This involves not just infrastructure investments and business incentives, but also ensuring rural voices are heard and represented in national policy discussions.
Opportunity Zones, which are insufficiently used in Canada, offer a promising avenue for spurring rural economic development. These zones provide tax incentives for investments in underdeveloped areas that can attract new businesses and jumpstart local economies. As Sean Speer writes, “Opportunity Zones represent an economic development model that aims to strike a balance between a desired political economy goal and the inherent benefits of a decentralized market economy.” In the United States, between 2017 and 2020, the equity investment in Opportunity Zones totalled at least US$48-billion.
These investments can support a range of sectors crucial to rural communities, from agriculture to eco-tourism, and from renewable energy to natural resources projects. The ripple effects of such investments mean not just more jobs, but also better services and an enhanced quality of life, which in turn can attract and retain talent.
Fostering innovation and entrepreneurship in rural Canada is also vital. Supporting local entrepreneurs can lead to job creation and renewed community engagement, helping to alleviate the sense of political alienation. Likewise, initiatives are needed that support young people to acquire and grow existing businesses, given the “silver tsunami” of aging entrepreneurs in rural communities.
The economic gap between urban and rural areas in Canada is more than a challenge; it’s an urgent call to action. Let this be a moment for all Canadians – policymakers, business leaders, and citizens – to work together in bridging both the economic and political divides. In doing so, we not only secure our economic future, but heal deep divisions that risk tearing our country apart.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
