The Demographic Crisis in Atlantic Canada

By James O’Keefe-Daw (AIMS on Campus Student Fellow) 

Atlantic Canada is facing a demographic crisis, coupled by an aging population and outmigration of youth. If creative solutions are not found, this crisis will lead to further serious economic problems in the future.

Atlantic Canada

Atlantic Canada is comprised of four provinces, Newfoundland and Labrador, Nova Scotia, New Brunswick and Prince Edward Island. In 2014, Newfoundland and Labrador, Nova Scotia and New Brunswick experienced more deaths than births, and this trend is still continuing. A recent Statistics Canada’s publication shows that if the current demographics in Atlantic Canada persist, the population share of the provinces in 2063 could account for less than 5% of Canada’s population.

The population’s aging is accelerating as a result of baby boomer immigration to the region. Seniors are being enticed to move east by Atlantic Canada’s inexpensive real estate, slower pace of life and easy commutes. The region is attracting individuals who are looking to retire and settle down more than those prepared to work.

An Atlantic Provinces Economic Council report found that conversely, 1.3% of the youth population is leaving Atlantic Canada. This is causing the demographics to shift even more in favour of an older population. Job opportunities and higher wages are among the reasons why youth are leaving. Young workers make $20.49 hourly relative to the national rate of $23.55. Also, male and female youth earn 24% and 10% more respectively than their peers who stayed.

Newfoundland and Labrador

The problems Atlantic Canada is facing are more pronounced in Newfoundland and Labrador. Recent findings from Memorial University’s Harris Centre research on the population shifts and projected effects on the province are alarming.

The Harris Centre found that from 2016 to 2036, Newfoundland and Labrador is projected to have more deaths than births and the overall population is expected to decline by nearly 8% even when migration trends are accounted for. Furthermore, even a replacement of 70% of the current labour force would not be sufficient to maintain the workforce population to 2036.

Interestingly enough, however, the North-East Avalon’s population is projected to increase by 15.36% in 2036. Those moving within the province are relocating closer to urban centres. Rural Newfoundland and Labrador is not faring well. The Northern Peninsula’s population is expected to decrease by 40% with an average age of 54 years old.

Economically, operating communities in rural Newfoundland and Labrador costs taxpayers. For example, it was recently disclosed that the ferry service in St. Brendan’s, a small community of 114 people, costs $6 Million a year to operate.

 

Consequences of the Demographic Shift

The parliamentary budget officer’s 2017 fiscal sustainability report found that Newfoundland and Labrador currently must increase revenue or reduce spending by roughly $2 billion to be sustainable fiscally. The demographic shift adds to this problem where the increased population will increase the province’s health-care expenses by almost 7% of the current GDP (the largest in the country.)

Nova Scotia’s youth outmigration is costing the province $1.2 billion less in lifetime after-tax income and an estimated $46.4 million in net future taxes. With the province spending $250,000 by the time a student graduates university and likely experiences outmigration, it is causing problems.

Recommendations

Reallocation of Resources

A combination of fewer youth and an increasingly aging population means that the reallocation of resources to accommodate the demographic shift would be worthwhile. Michael Haan, an associate professor at the University of Western Ontario argues that the demographic situation has led to an “infrastructure mismatch.” Effectively, he argues that due to their being fewer young people there is not a need for as many schools. He suggests that “Converting schools to retirement homes is something to think about.”

An AIMS report on demographics argues that rather than focusing on the “cost” of the population aging, one should look at how to reallocate resources to accommodate the shift in demographics. This leads to questions that planners should keep in mind such as how many teachers are required and are there enough services available for older people and the like.

Being proactive about planning for the future is critical to assuring that Atlantic Canada is equipped to handle the demographic shift.

Increased Job Opportunities for Youth and Immigrant Retention

International students in Newfoundland and Labrador leave the province after graduation because of the poor availability of jobs in the province, isolation and the high cost of living/low pay.

Job opportunity is lacking in Nova Scotia as well where 42% of university degree holders aged 25 to 34 work jobs that do not require a degree.

If Atlantic Canada were to have higher wages and more job opportunities for youth and immigrants in the region, it could retain them.

Conclusion

Every province in Atlantic Canada is aware of the demographic problems in the region and each government is crafting a plan to solve the problems. The situation in Atlantic Canada is difficult and is projected to only get worse. However, careful planning on where to allocate resources and strategies to retain youth and attract immigrants are steps that can be taken to can help the problem at hand. Atlantic Canada is resilient and, hopefully, will persevere through such trying times.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s