Bridging NL’s Urban/Rural Divide

Newfoundland and Labrador (NL), throughout history, has faced several economic impediments. The most famous of these impediments is the collapse of its cod fishery in the 1990s, which placed the viability of coastal communities in question. For instance, from 1991 to 2001 (following the federal government’s 1992 cod moratorium), NL’s rural population as a percentage of the province’s total population dropped 18%.

The primary driver behind the province’s rural population decline is a lack of employment. NL’s key economic determinants (and their jobs), for instance, are chiefly located in urban areas where employment opportunities are greater. Without taking proactive steps, this trend is likely to continue.

Although there is an emergence of specific industries, such as aquaculture, in NL’s rural areas, the biggest concern is the province’s ‘brain drain.’

Of those in rural communities whom choose to continue their studies, a large portion leave and few ever return home. This creates a vicious cycle, the result of which is a shortage of highly trained individuals in the province’s rural areas (thus, limiting innovation and constraining organizations that would otherwise consider operating rural communities).

There are, however, several potential solutions for reducing the gap between NL’s rural and urban communities and, subsequently, growing NL’s rural economies:

1)      Infrastructural development
2)      Labour market assistance
3)      Encouraging immigration

If you build it, they will come.

One potential solution for attracting new talent to the province is to advance research programs and build the additional capacity necessary for extending these programs into the province’s rural communities. The province, for instance, recently became an advocate for extending research and development (R&D) programs, incorporating entities such as the Research and Development Corporation (RDC), which “provides leadership, strategic focus and investments in order to strengthen and improve the research system throughout the province.”

Although it is unlikely that NL will become an R&D hub (like, for instance, Singapore), it is uniquely located for specialized studies, for instance, in aquaculture, Arctic relations, and natural resources development.

Furthermore, the provincial government is capable of improving its labour and immigration market. Firstly, tax-rebates afforded to companies that are establishing themselves can create jobs in the province’s rural areas and, secondly, escalating the province’s immigration recruitment strategy can provide capital for NL’s rural areas that have experienced population decline.

Although these initiatives are cost-intense, the current upkeep rate of NL’s rural infrastructure (and other government services) as a percentage of the province’s GDP is growing annually, requiring greater economic output. Bridging this gap is crucial, therefore, not only for sustaining NL’s current demands, but also for reaching the province’s full economic potential.

Tyler Power is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute

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