Atlantic Canada’s population is poised to shrink,
yet we’re spending as if nothing’s changing

Atlantic Canada faces immense policy challenges as its population not only continues to age, but also begins to shrink, says a study by the Atlantic Institute for Market Studies.

Newfoundland is already losing more people to death and emigration than it gains through births and immigration, says the study, written by Frank Denton, Christine Feaver and Byron Spencer of McMaster University. And the three Maritime provinces are likely to follow suit within two or three decades. (Follow this link to Population Change in Atlantica Canada: Looking at the Past, Thinking about the Future.)

These trends are coupled with another well-documented phenomenon common throughout Canada and much of the Western world – an aging population. A huge decline in fertility rates inevitably means more and more old people and fewer and fewer who are young.

Fewer hospitals, more schools

The president of AIMS, the institute that commissioned Population Change in Atlantic Canada,  says the forecasts may be for the future, but the time to act on them is now.

“Denton, Feaver and Spencer make it crystal clear that our region will need more hospitals and fewer schools,” said Don Cayo. “Yet we’re closing functional hospitals and building more schools. We may, in fact, need new schools in some fast-growing areas of this demographically stagnant region. But is anyone looking ahead to see if there will be students for all of them 10, 20 or 30 years hence? Do we have a Plan B for these buildings – have we thought about designing them for economical conversion to other uses like nursing homes or community centres – if their communities run out of students to fill them?

“The study points out other implications, too – for example, the need to assess whether we’re training too many teachers and too few health and elder-care workers to meet future needs. We should also be asking whether we should be building more walking parks instead of balls parks, all those sorts of things.”

Where are the young?

The aging of the Atlantic population has already been dramatic, and soon will be huge. In 1951 the percentage of the population under 20 years of age ranged from 47.1 in Newfoundland to 40.4 in Nova Scotia. Today it is highest in Prince Edward Island at 28.6 and still lowest in Nova Scotia at 26.1. Meanwhile, the percentage of people 65 and over in 1951 ranged from 6.4 per cent in Newfoundland to 9.8 in Nova Scotia. Now it ranges from 10.6 in Newfoundland to 13 in P.E.I., and the demographers believe it is headed for a high of 31.2 in Newfoundland and 25.9 in P.E.I. by 2036.

Population Change in Atlantic Canada projects a drop in the region’s total population by 2021. And the rate of decline will accelerate until 2036, the last year the projections cover.

It tracks a long-term demographic trend that, despite increases in the actual number of people living in Atlantic Canada, has caused the region to lose ground as a proportion of the Canadian population.

The region had 1.6 million people -11.5 per cent of the nation’s population – in 1951, the year of the first census after Newfoundland joined Confederation. By 1996 the number was up to 2.4 million, but the percentage was down to 8.0. Other parts of the country simply grew much more quickly.

Who will pay the bills?

“Slower growth and aging affect the labour force, and hence a region’s ability to generate output and income,” say the study’s authors. “But they affect virtually all other aspects of the economy, too.

“They affect patterns of savings and household consumption, and hence investment. They have differential effects on sales, production and investment levels in different industries, and their impact falls unevenly on different areas within a region.

“They affect the tax bases from which provincial governments draw revenue, and they affect the demands for government program expenditure. . . .

“Education, pensions and health care are major budgetary components that are obviously sensitive to population change, and they deserve special attention.”

Why don’t others come?

The study also pinpoints a root cause of the region’s failure to grow apace with the rest of Canada – the failure to attract immigrants. A 25-year analysis shows that the Atlantic Provinces attracted less than a third of their proportionate share in 1971-76, dropping to less than a quarter in 1991-96. Newfoundland dropped from barely over a fifth of its share to just over one-seventh; Prince Edward Island stayed steady at one-fifth; Nova Scotia improved slightly to about two-fifths; and New Brunswick dropped dismally from more than a third to just slightly over one-ninth.

That trend is coupled with the net effect of the migration of people to and from provinces within Canada. It has been consistently negative in Newfoundland, where the loss grew to 28,300 people in the last five-year period studied. In the Maritime provinces the flow has varied with gains in some recent five-year periods and losses in others, but the net effect has been marginal.

Can we turn this around?

“An important question is whether one province, or perhaps the Atlantic Provinces acting in concert, could affect the course of population growth, or whether they must simply respond to demographic changes as they evolve, and make the best of it,” the authors write. “The answer is not simple.

“People tend to move to areas that are prospering and leave those that are not, and it makes no sense to try to attract more immigrants or to hold young people in a region where they cannot find employment.

“[But] successful policies leading to more rapid economic growth in the Atlantic region would be likely to encourage population growth.”

Cayo adds, “That being the case, the answer does become simple – to state, if not to implement. It’s to fix the economy.

“That involves taking the long view in a number of areas. It’s to foster economic growth that is sensible and sustainable, not to subsidize jobs that are at best tenuous and at worst short-term. It’s to invest in infrastructure that will create long-term value, not just short-term political mileage. It’s to train people for tomorrow’s workplace, not tomorrow’s pogey cheque. And it’s to moderate the tax load so more people will want to spend and invest and live here.”

To read the complete report, click here.

About the Authors

Frank T. Denton, B.A., M.A., F.R.S.C., is Professor Emeritus of Economics at McMaster University and former Director of the McMaster Program (now Research Institute) for Quantitative Studies in Economics and Population. Before coming to McMaster he served for some fourteen years in research and administrative capacities with various government and private agencies. Previous positions include Senior Advisor on Research and Econometrics and Director of the Econometric Research Staff at Statistics Canada. He is a Fellow of the Royal Society of Canada, a Fellow of the American Statistical Association, a Fellow of the Royal Statistical Society, and an elected member of the International Statistical Institute, the International Union for the Scientific Study of Population, and the National Bureau of Economic Research Conference on Income and Wealth. His work has been published in a large number of books, monographs and articles in professional journals of economics, statistics, and demography.

Christine H. Feaver, B.A., is an Associate of the McMaster Research Institute for Quantitative Studies in Economics and Population. Her areas of expertise include computational econometrics, economic-demographic modelling, and computer programming.

Byron G. Spencer, B.A., Ph.D., is Professor of Economics and Director of the McMaster Research Institute for Quantitative Studies in Economics and Population. His areas of specialization include economic demography, applied econometrics, and health economics. He was the Principal Investigator for the McMaster Research Program on the Independence and Economic Security of the Older Population (IESOP) funded by Health Canada as part of its Seniors’ Independence Research Program. He is an elected member of the International Union for the Scientific Study of Population, and has published extensively in the form of books, monographs, and articles in professional journals.

The authors of this report have worked independently and are solely responsible for the views presented here. The opinions are not necessarily those of the Atlantic Institute for Market Studies, its Directors, or Supporters.