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 – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
