When Prime Minister Stephen Harper recently announced he wanted British Columbia to have more seats in Parliament, I’d bet my mortgage it was part of a larger, two-pronged strategy: First, to marginalize areas of the country where the Tories will likely never do well and, second and as a result, to allow for reform of ineffective federal programs that exacerbate labour shortages.
To put Harper’s plan for more B.C. seats in context, consider a recent report from economist Dale Orr of Global Strategies. Orr forecasts that B.C. and Alberta will have another 450,000 jobs available in 2011.
Given that both provinces already have the lowest unemployment rate in decades and well below the Canadian average, it will be a challenge to fill such openings.
Orr notes that the most obvious remedy is better labour mobility. That’s economist-speak for getting people to move to where the job vacancies exist. He points out that there has been some increased movement to western Canada from points east, but also that such transfers are a trickle compared to what they should be.
Orr looks back and notes that the unemployment rate in eastern Canada has been consistently higher than the rest of the country — 30 per cent higher than the Canadian average since the late 1970s. "In fact, for every year since 1976 the unemployment rate in Newfoundland has been the highest in Canada," notes Orr.
According to Statistics Canada, Newfoundland has an unemployment rate of 14.8 per cent. That compares to 4.7 per cent in B.C. and 3.4 per cent in Alberta.
Expressed another way, Newfoundland’s unemployment rate is almost three-and-half times that of B.C.’s and over four times Alberta’s.
Quebec, too, is a problem. Orr reports that la belle province has averaged 10 per cent unemployment for 30 years.
(And yes, that has much to with the election, 30 years ago, of the Parti Quebecois, which chased investment and jobs out with its separatist agenda, high taxes and suffocating regulation.)
In a normal economy, plenty more people in eastern Canada and Quebec would pick up their tools, trade certificates and university degrees, pack up the family and head west. That more have not is due in part to federal policies that encourage workers to stay put while help-wanted signs dot western Canada’s landscapes.
Wrongheaded federal policies include extending Employment Insurance benefits in high-unemployment regions, which coincidentally, are where many people have seasonal jobs and where ridings switch parties on just such issues. (Think of the fishing industry on the east coast.)
Ottawa’s policies hurt Atlantic Canada, they don’t help it, including regions that have below-average unemployment rates such as Halifax; federal policies even discourage people from moving to that city from elsewhere in the region.
Also, such policies hurt workers in the rest of the country who must pay higher EI premiums than would otherwise be necessary.
Perhaps worst of all is the message about the value of work sent by Ottawa to those in areas with high jobless rates: Don’t worry about finding full-time work, don’t worry about moving to Alberta or B.C. to get it, stay where you are and collect the EI cheques.
That’s perverse as it gives people incentives to not make responsible decisions: To move to where the jobs are. That in turn destroys the personal sense of accomplishment and worth that comes from a job. Instead, these values are replaced with the belief that it is indeed OK to rely on others even when one is capable of full-time employment.
Given the labour shortage in the West and increasingly in Ontario and even in selected parts of Atlantic Canada, it makes sense for the federal government to scrap extended EI payments. Remove the incentive to stay in uneconomic areas and people will — as they have throughout history — move.
But Liberal and Conservative governments have been reluctant to change EI because it costs them votes in Atlantic Canada.
Now recall Harper’s announcement that he wants more parliamentary seats in under-represented B.C., and before the next election. Along with booming B.C., Alberta too would end up with more seats. My guess is the bulk of those new ridings would vote Tory, placed as they will be in the high-growth suburban areas.
For the Tories, that cuts down the influence of regions unlikely to vote Conservative. Eventually, it also allows the federal government to introduce policies on EI and other programs that help, not hinder, Canada’s labour mobility.
The economist Orr may yet get his wish.
Mark Milke is author of "A Nation of Serfs?"
