Canada is about to face a significant shift. Market forces, societal trends and technological innovations combine to create new economic opportunities in small and rural communities. The recent COVID-19 pandemic, while devastating, has also created opportunities that we must seize. Because of the combination of these factors, we now have a historic opportunity to make people’s economic future less dependent on where they live.
In a recent white paper produced by Bell Canada, we discuss these opportunities, the primary one being to drive economic growth and realize opportunity in small and rural communities across the country.
The Canadian economy, like other advanced economies around the world, is characterized by high urban concentration. Thus, over the past five years, nearly two-thirds of the net new jobs created in the country have been concentrated in Montreal, Toronto and Vancouver. If we add Ottawa-Gatineau, Calgary and Edmonton, this share rises to more than three-quarters of the jobs created. The trend is much the same for other key economic indicators, such as investment, business creation and income gains.
Many studies have been devoted to disparities based on location, and this problem is not exclusive to us. In fact, these disparities are part of a global phenomenon where the benefits of the knowledge economy have tended to be disproportionately concentrated in a small number of large cities. Richard Florida, a leading urban scholar, has called this phenomenon the rise of superstar cities. Economist Enrico Moretti called it “the great divergence”.
However, in Canada, the disparities by location have been particularly pronounced due to our unique economic geography. Just think that the average population density of the G7 countries is over 200 people per square kilometer while in Canada there are only four! Our big cities dominate our economy, our society and our politics.
Cities have been a tremendous strength for our country, and they will continue to do so. It is for this reason that many people from all over the world immigrate there. Cities are the seat of diversity and innovation, and they offer multiple possibilities. Their continued prosperity and dynamism will continue to be a key driver of our country’s progress.
However, too many regions have not been able to take advantage of Canada’s economic growth and opportunities. These disparities by location not only pose a problem for social cohesion and political stability, but can also compromise the fundamental Canadian goal of inclusion and economic opportunity for all.
The good news is that there are encouraging signs pointing in this direction. The first is the increasing availability of broadband technologies. Significant investments in broadband infrastructure – including a record $14 billion from Bell in the past three years alone – enable people and businesses to access global markets, regardless of where they live. residence or work.
We cannot stress enough the leveling effect of these broadband technologies: they can help Canadians have better access to basic public services, such as health care and education, empower entrepreneurs reach new markets and customers through digital commerce, and boost productivity in key sectors such as mining, energy, agriculture and agribusiness.
The interaction between technology and work is the second reason to be optimistic. Looking back, the historic disruption caused by the COVID-19 crisis laid the groundwork for significant changes in where and how we work. New technologies allow people and businesses to move from big cities to smaller communities. Recent data from Canada and the United States clearly support this view. While it’s hard to predict the extent of it at this point, remote working and hybrid working seem here to stay, to some extent.
The interaction between these different factors (including housing prices) can stimulate economic growth and opportunities in small and rural communities. Canadian policymakers need to think proactively about developing public policies that help capitalize on this historic opportunity.
A broadband policy is one example. Reducing disparities by location will require significant investments in broadband infrastructure in these communities. Government policies will need to create the conditions for these investments by allowing companies to earn a reasonable rate of return based on market forces. In fact, in its 2023 budget, the federal government recognized that “without an appropriate policy framework, Canada could face issues of underinvestment in critical areas and lagging in the development of new clean technologies” ( “Canada’s Place in a Changing Global Economy”, p. 22).
However, this desire to make large-scale investments deployed in real time contrasts greatly with the political choices that will lead to reducing measures in support of private sector investment, rather than strengthening them. Federal government and CRTC policy choices, such as those that mandate more wholesale access to cable and fiber optic networks, will skew investment decisions in favor of high-density cities that guarantee a return on investment, undermining the goal of stimulating growth and opportunity more broadly across the country.
Such a vision of inclusive economic growth and opportunity will not happen spontaneously. Achieving this will require consistent public policy, consistently applied at the federal level, as well as business-led initiatives. It is ultimately up to the private and public sectors to work together to seize this once-in-a-lifetime opportunity. Our communities and our country will be better for it.
