Employment opportunities directly linked to population growth, study finds

A new Statistics Canada report measures the impact of changes in the region's economy on its population. The result, according to one economist, is that New Brunswick should now have a better idea on where to focus its growth strategies. 

The study, titled The Effect of Labour Demand on Regional Demographics, quantifies the relationship between labour demand, defined as paid employment, and population growth or decline.

Researchers have had a notion for some time that a decline in economic activity will lead to people leaving a region, and growth would, by contrast, have the opposite effect, said the study's author René Morissette.

But until now, the magnitude of this relationship had not actually been calculated in Canada, he explained.

"What the study does is actually put a number on that relationship," he said.

For example, between 2001 and 2015 in the region of Campbellton–Miramichi, paid employment fell about 12 per cent. During the same time period, the working age population, defined as those between 15 and 64, fell by about 19 per cent.

By contrast, in the region of Moncton–Richibucto, paid employment grew by about eight per cent between 2001 and 2015, and the working population grew by about 8.5 per cent.

Conversely, Morissette said, you can make a comparison to regions in Alberta that have seen large improvements in labour demand since the early 2000s, resulting in significant increases in the working age population.

"What the study highlights is the impact that employment dynamics may have on demographic profile of regions," he said.

On average, the study showed that over a seven year period, there is almost a one-to-one relationship between decline or growth in paid employment, and the working age population, Morissette said.

Morissette said the way the study was conducted ruled out the possibility that a population increase could in turn effect labour demand. 

Need to change strategy

Herb Emery, the  Vaughan Chair in Regional Economics at UNB, said the study points to the fact that what really matters for a region's population size is labour demand.

"Whereas, governments are increasingly focused on adding people first and hoping that that will drive labour demand by potentially driving capital in or unlock business potential where there's perceived labour shortages, this study really points to the fact that it really is labour demand which ultimately comes from the export sector, which is driving everything," he said.

He pointed to examples of government strategies to bring more people to Atlantic Canada, like the Atlantic Immigration Pilot, that is aimed at bringing more immigrants to the region to stimulate the economy. 

But there's not enough focus on business conditions, Emery argued, which would drive investment, which would in turn increase paid employment opportunities.

"What we could be doing is focusing on making business conditions in New Brunswick more favourable for investment, which really means that even at whatever the world prices are for lumber, timber, fish, whatever we're going to produce, that our producers are competitive," he said.  

Works both ways, one expert says

However, Fred Bergman, a senior policy analyst with the Atlantic Provinces Economic Council, pointed out there are examples of population growth driving labour demand, so it's not always a one-way street.

"Even in the simplest example, if you have a higher population, you need more infrastructure, and if you have to build more infrastructure, whether it's highways, schools, hospitals, you need people to do that, so that's going to increase your labour demand," he said.

If some of that population has income, they will end up spending money in the region, which could also end up increasing labour demand, he said.

"So you can see both sides of this argument holding weight. Which side holds more weight I think is depends on your view," he said.

"You ask two economists, you'll get two opinions probably."