Rural Canada economies evolving: Report

OTTAWA — Technology, prices and demography are key forces driving the economy in Canada rural areas, a study by Stats Canada found.

While not unique to rural Canada, these forces provide opportunities for rural areas relative to their urban counterparts, according to the study titled “Factors Driving Rural Canada’s Economy.”

The key factor is labor-saving technology, or the increasing value of human time, where the price of labor is rising relative to the price of machinery.

“This means there is an on-going incentive to adopt labor-saving technology to substitute machines for labor,” states the report. “Consequently, regardless of the price of outputs, such as wheat, lumber or nickel, communities dependent on primary sectors will have fewer and fewer people working in primary industries.”

In rural Canada, the cost of transporting information is
falling, while the cost of transporting people is rising.

In order to maintain their employment base, successful rural communities will be those that find new goods or services to sell on the market, the study finds.

Three long-term trends in terms of price — the cost of both transporting goods and transporting information is falling, while the cost of transporting people is rising.

Rural Canada has increased its share of Canada’s manufacturing employment over the past three decades. It suggests that the declining price of transporting goods is helping rural Canada to be even more competitive in manufacturing.

This is occurring not only in jobs related to resource commodities, but in newer jobs that are part of the network of just-in-time delivery.

However, the falling price of transferring information can be a double-edged sword for rural areas. “On the one hand, rural entrepreneurs can take advantage of new information technologies to sell their goods or services. On the other hand, rural consumers can choose to purchase from outside their local area,” states the report.

In terms of demography, the study suggests a number of trends.

First, Aboriginal people will remain a driving force for parts of rural Canada. In Saskatchewan, projections show that by 2017 Aboriginal people will account for 21 percent of the total population, compared with only 14 percent in 2001. Also, by 2017, Aboriginal children will represent 37 percent of all children in the province, up from 26 percent.

The vast majority of new immigrants to Canada choose to live in large metropolitan centers. But 2001 Census data show that a small number of rural regions were competitive in attracting immigrants.

In fact, 9 of the top 30 regions attracting new immigrants in 2001 were predominantly rural regions.