NEWFOUNDLAND AND LABRADOR, like most of Atlantic Canada, suffers from two structural economic problems.
First, it has too many people living in rural communities: 43 per cent of NLers live in communities with less than 5,000 people (the Canadian average is 19 per cent). Unfortunately, too many of these rural communities lack the economic base to support full-time employment and end up with a high reliance on seasonal work. Further, that excessive ‘ruralness’ means that the cost of public service delivery is debilitatingly high. Think of the number of health care facilities that are currently in place as an example: more than 40 health care facilities, including 35 hospitals, for a population of half a million.
The second structural economic problem is its workforce composition. According to the latest Statscan numbers, 26 per cent of those employed in the province work for the public sector (the Canadian average is 20 per cent). If you believe that the private sector is most responsible for job creation, then Newfoundland and Labrador is essentially shorthanded in terms of growing the economy. It’s the same situation across the region and one of the reasons why the Atlantic provinces have trailed national growth rates for much of the last 60 years.
Too many rural communities lack the economic base to support full-time employment and end up with a high reliance on seasonal work. Further, that excessive ‘ruralness’ means that the cost of public service delivery is debilitatingly high.
In addition to these two problems, attitudinal barriers are preventing the types of changes needed to address the economic and social challenges in the province. As an example, despite a stagnant and aging population, nearly half of N.L. residents believe the province is equally or more diverse in its population as other parts of Canada. In fact, Newfoundland and Labrador has the smallest percentage of residents borne in another country: 2.4 per cent versus 21.9 per cent for Canada.
So, how to address these challenges? One suggestion is the creation of hubs focused on economic development and more efficient delivery of public services. Newfoundland has 12 urban centres, with populations of 5,000 or more, serving 90 per cent of the population (within 75 kms). Regional economic development strategies, including streamlined public service delivery (especially healthcare), should be sought.
The province also needs a strategy to increase its population by at least 4,000 per year over the next decade simply to replace those who will be leaving the workforce. Without population growth, the province’s economic future is bleak.
The province must also find a way to re-balance its workforce. One method of doing so is to outsource, on a competitive basis, non-essential public sector work to the private sector, as has happened elsewhere in Canada.
There is also a need to reduce the number of municipalities. There are currently over 270 municipal units in the province— far too many given the population.
Given the small domestic market, there is also a need to become more export oriented. This will require more investment in science and technology- oriented companies with a focus on national and international markets.
This is a now or never moment in the history of Newfoundland and Labrador. Boldness of action is an imperative if the province is to secure its economic future.