December 7, 2015 - The demographic shift is upon us, and has been for a while. Our overall population is falling and our total population is aging. Indigenous population is on the rise but, even there, we see early indications that as economic and social improvements occur population growth slows.
So, do we need more people? It depends on your point of view.
There are multiple schools of thought about the ongoing demographic shift. Some think it is a good thing. That a smaller population will ease human pressure on our ecosystem and will benefit future generations of Northern Ontarians. Allowing a better balance between humanity and the natural environment. Others see it as our best chance in generations to finally fully engage those who have been trapped in unhealthy social and economic situations for far too long. Another group see it as a doorway to “Canada 2.0”, an opportunity to bring in a massive influx of new Canadians. Still others see a chance to again give families the pride of place in society that they once had, before the baby boom made making babies less of a priority.
Your view on whether we need more people also depends on where you live in the North. In the last decade or so some areas have actually grown in population. The districts of Manitoulin, Kenora, Parry Sound, Greater Sudbury and Nipissing have all seen measurable growth in the last ten years. Much of this growth is likely due to urbanization and indigenous population expansion (or in some cases the urbanization of the indigenous population). But, for those communities, it is growth nonetheless.
Population growth, however, does not necessarily translate into greater community sustainability. That depends to a large extent on something called the dependency ratio. This is the number of people who are willing and able to work versus the number of people who need to be supported by those people. You can’t just have population growth, you have to have population growth in the working ages and larger growth in the working ages than in the non-working ages. This is exactly the opposite of what we and most other developed and indeed developing countries are experiencing right now.
Most successful or sustainable economies have dependency ratios somewhere close to the .5 to .75 range. They are close to having two workers for every one dependent. Economies that are unsustainable or in decline tend to be the inverse, having a ratio of 1 to 1.5 or greater. Approximately two dependents (or more) for every one worker. According to recent projections completed for Northern Policy Institute, by 2041 two of our “growth” districts, Parry Sound and Manitoulin will exceed a dependency ratio of one. So they will be growing, and aging, into unsustainability.
We have done similar projections for all of Ontario and for every northern district. At present our dependency ratios are all in the sweet spot around that two workers for one dependent. Ontario over the next thirty years will go from a dependency ratio of around .5 to around .7, still sustainable. Just to match that trajectory, most of our eleven districts will need some population growth. That means greater immigration and birth rates now, so that we have a larger, younger, population down the road. We will still have to enhance the skills and social inclusion of those already here, but that simply isn’t enough to address the problem, even if we had a 100% success rate.
Notice I said just to match the provincial decline we will need more people. In Thunder Bay, to slow our decline to the provincial trend, we need approximately 1000 new working age people a year for the next fifteen years. Algoma needs nearly 700 a year. Cochrane and Greater Sudbury need close to 500 a year, Timiskaming around 250 or so. Every year, for fifteen years. If we wanted to keep our current worker to dependent ratios we would need, in some cases, upwards of three to four times the level of immigration and new births than we need just to slow our descent.
Those births have to start next year, and continue for the next thirty. So really immigration is our primary short term response. Here is an idea. The province of Prince Edward Island, with a population of 125,000 or so, is allowed to nominate for expedited entry 400 immigrants a year. In a simple per-capita formula, that means Northern Ontario, with roughly 800,000 people should be able to nominate 2500. Right now, we can nominate exactly 0. The province of Ontario and the federal government should partner to immediately assign at least 2500 immigrants annually for expedited entry to our region. It is a simple, achievable and necessary change. Let’s get it done.
Charles Cirtwill is President and CEO of Northern Policy Institute. An independent social and economic think tank based here in Northern Ontario. Originally published in Northern Ontario Business.
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2 Reader Comments
Does NO Need More People?
Posted By David Robinson on 12/13/2015 2:08:15 PM
The Northern Ontario economy is still based on industries that are shedding labour. As a result, young people have to leave and the population is older than the provincial average. A weak economy and improiving social services encourage retirement in thee region, so the dependency ration rises. But income for retirees is coming from savings acrued earlier and in other areas, so the calculated current, instantaneous, local dependency ratio is probably misleading. The dependency ratio for seniors homes and Snowbirds in Florida is similarly high. That the current working population in Norhtern Ontario is not supporting the elderly in Norhtenr Ontario means that the high dependencyratio is not of itself a problem.
I would argue that the core problem for the region really lies in the barriers to expanding downstream processing in the forestry industry and upstream production for mining.
a few things
Posted By Charles Cirtwill on 12/14/2015 2:51:16 PM
Thanks for sharing your thoughts. I am not sure we can reliably say anymore that the "Northern Ontario economy is still based on industries that are shedding labour". With forestry and mining representing well south of 10% of the workforce, even allowing for indirect and induced jobs (which would bump that number up), I don't think "based" quite cuts it anymore. Certainly those industries define why our communites are where they are, but in many areas a diversified economy has or is beginning to take hold - tourism, cultural industires, specialized manufacturing do not depend on forestry and mining. The public sector is also huge, with education and health services/research a very large part of both our GDP and our value add. Yes, those facilites would likely not be there but for the mills and the mines, but they are there now and they have their own insitutional interests to protect - and they generate their own economic spin off and self sufficency (just ask Mt. A and Sackville NB).
I also note that in the last three years several of our population centres have seen positive growth in the "youth cohort" - they are starting to come, not necessarily all still leaving and most are not coming for the mines or the mills (although some are doing that too) - not a flood, perhaps a trickle, but a trickle nonetheless not a drought any longer.
As for who pays the costs of retirees. Government pensions (federal, provincial and municpal) are not 100% funded from a savings pool already accumulated. Dr. Chris Ragan has done some excellent work scoping the size of the intergenerational transfer currently underway from my generation to yours ( : ) ). Even private pensions in some degree depend on current and future earning potential of the companies that back them - as forestry retirees of bankrupt firms have recently learned to their chagrin (as IT workers learned before them). Indeed, with GIS and other income related supports for seniors, the degree that they are funding their living costs out of "savings" is a major question - one that may indeed need to go into the balance of payments question between the north and the rest of Ontario.
Of course, if we could import seniors, as Florida does, and have someone else pay their costs - then, as you note, the dependecny ratio would matter little. And, to the extent other canadians are footing the bill for our seniors - we have a win win scenario - but regrettably, our seniors continue to largely be our seniors - so the dependecny ratio matters becasue we pick up some not insignifcant portion of that bill. Also worrisome is the question of sustainability - we may be able to artifically spike our GDP by the consumption of non-workers (retirees), but that is a temporary phenomenon and creates a decreasing amount of new wealth to contribute to future savings, nor is it a model sustainable going forward, absent again, becoming, as Florida has, a destination for disposal of retirmetn income (note I said income, not savings).
That said - indeed lets lever our natural resources - upstream, downstream and in between - we have, as you and I have disciuussed before, many 21st century opportunites to do just that - I just think we need to be more positive about where we are, and less married to the old narrative which, at least to me, appears to apply less and less with each passing year.