Population Growth Leads to Challenges

For the first time in decades, Manitoba’s unemployment rate has risen above the national average.  With the provincial economy growing (briskly for Manitoba) around 2% a year, we might have […]
Published on January 30, 2019

For the first time in decades, Manitoba’s unemployment rate has risen above the national average.  With the provincial economy growing (briskly for Manitoba) around 2% a year, we might have expected ‘some’ declining unemployment rates and labour shortages.  But, it’s not enough with record immigration and a slowdown of Manitobans leaving for Alberta and B.C.

Manitoba has seen steady job growth in the last few years – 6,900 new jobs were created in 2018, with most – 4,900 – of the increase from public administration (which is a surprise). Like Canada overall, where the 163,000 new jobs created in 2018 was not enough with the labour force rising 427,000, Manitoba’s job creation failed to cover the 10,900 new entrants to the labour force. So while Canada and Manitoba has employment growth, unemployment has risen because the labour force is growing faster than jobs and the overall economy.

From 2000 until 2015, Manitoba recorded the greatest outmigration of residents in its history. Then, high-paid jobs in Alberta and Ontario and the lifestyle of British Columbia lured long standing Manitobans away.  More than offsetting the population losses at the time was an aggressive immigration program (largely through the success of the Provincial Nominee program) that brought in immigrants at rates above the national average.  Those high levels continue today. Immigration to Manitoba is now at levels 3 to 4 times what they were in the 1990s. But, while Manitoba’s population is growing faster than before, the provincial economy continues to perform at its traditionally low levels.

While young people are more likely to move, lately the loss has slowed. Federal policies obsessed with ‘climate change’ are damaging Alberta’s energy economy with tanker bans, a thickening of regulatory approval processes, and other deliberate obstacles.  Canada’s exports of oil remained damaged with Alberta’s inability to get oil to tidewater. The lack of pipelines has had Alberta taking huge discounts on its oil price, and during a period of time of low world oil prices.

Investment in the sector has plummeted: over 110,000 oil and gas workers have lost their jobs since 2015. Calgary’s downtown has a vacancy rate above 25%. Federal policies suppressing Alberta’s oil industry causing foreign investment into Canada to plunge – 2018 reporting the lowest industry infrastructure spending since the financial crisis of 2008/09. With few high paid jobs available in Calgary, and sky-high B.c. and Toronto real estate prices, Manitobans are staying put.

Meanwhile there is a migration of First Nations folks from reserves – where there are few jobs and poor education, health and housing – to Manitoba’s cities. This migration is also a factor in the increasing workforce and is a natural phenomenon – labour statistics do not include the reserves.  Globally, people are leaving rural areas for cities – mirrored in moves from reservations to cities. This movement will not stop.

These trends – higher retention of Manitobans, increased migration of First Nations from reserves to cities, and high levels of skilled and semi-skilled immigration – are expected to continue.  We should see the growth in Manitoba’s labour force as an exciting new opportunity and challenge. In a province where the public sector is much bigger than the Canadian average it is vital that this government, and all future governments, work hard to encourage investment in the private sector to create jobs and boost the economy.

The size of Manitoba’s public sector needs to shrink if Manitoba is ever to eliminate its large-budget deficits.  And, there is no magic formula to attract investment and job creation, though our elected officials are constantly told differently. Private sector investment is attracted to locations with lower taxation, balanced budgets and efficient public services.  Manitoba now performs poorly on all of these metrics.

Opportunities to grow and prosper can flow naturally from population increases Manitoba has not seen in decades. But to be realized, our provincial and municipal governments need to cut public sector costs, taxes and fees, and become vastly better in providing needed and efficient services.

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