Demographic Headwinds Threaten Atlantic Canada Economies

For the umpteenth time - you can't have a strong economy without strong families:

TORONTO – The twin demographic challenges of an aging population and slow workforce growth will affect Canada’s Atlantic provinces more acutely than other regions of the country, according to a study released today by the C.D. Howe Institute. In “Stress Test: Demographic Pressures and Policy Options in Atlantic Canada,” authors Colin Busby, William B.P. Robson and Pierre-Marcel Desjardins warn that many years of low birthrates and youth outmigration mean that the Atlantic region faces diminished workforce growth and a fiscal squeeze as fewer taxpayers support a growing bill for public programs.

The authors outline the likely evolution of the size and age-structure of each Atlantic province’s population and highlight the potential impacts of international and interprovincial migration trends on living standards and fiscal sustainability in the years ahead. Finally, they canvas some policy tools to deal with the challenges.

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And yet, even under their most optimistic scenario, Atlantic Canada is going to face a declining workforce and a prolonged period of population decline. Here in New Brunswick, the number of deaths has already caught up with the ever declining number of births. Next year, the province's natural growth will be negative; there will be more deaths than births. (And yet, nearly a thousand of unborn New Brunswickers will be slaughtered before they get a chance to see daylight - at Morgentaler's, for a fee or in our hospitals, under the guise of "medical necessity", at taxpayers' expense.)

By 2050s, according to the Howe Institute's prognosis, the ratio between the people of working age and the seniors will shrink to just over 2:1. Again, that's under their most optimistic scenario. Under a pessimistic scenario, the old age dependency ratio in some provinces could climb to almost 70%, which means - for every 2 seniors there will be only 3 people of working age to support them.

But you don't have to wait until 2050s to see the effect of the demographic disaster that awaits Atlantic Canada. New Brunswick is already in a situation of a "mom and pop" enterprise that is being bought out by a chain store giant next door. Yes, I'm talking about the recent acquisition of the key NB Power assets by Hydro Quebec.

And yes, the deal, if you look at it from the business prospective, seems perfectly reasonable. Obviously, with the population of mere 750,000 scattered across 72,000 square kilometers, a separate generation system and transmission grid is simply not worth maintaining. (Not to mention that the fossil fuel plants are going to be shut down anyway, due to environmental constraints and the province just can't afford to build new ones.)

Sure, a bigger company is going to do the job more efficiently and provide electricity at lower rates. (Currently New Brunswickers pay 60% more than Quebecers.) But in return, the province relinquishes its control over a vital part of its infrastructure, granting the ability to make key decisions over the power supply and the transmission grid to its next door neighbor.

Could New Brunswick ever buy back those assets, let's say with the help of the Bank of Canada? Not with that kind of demographic prognosis. Unless the four Atlantic provinces succeed in reversing the trend, they could end up being incorporated into larger jurisdictions or - downgraded to the status of federally-managed territories.