We’re not alone

Sometimes it is comforting to know that other countries face similar economic challenges. Consider the UK for one. A new study published about regional economic development in the UK sounds frightenly like Canada. Here are some highlights with my comments:

A new report today documents a profound economic imbalance between the UK regions, with wealth creation, enterprise and growth concentrated in London and the South East of England and high welfare dependency and large public sectors in Wales, the North-East and Northern Ireland in particular.

Substitute Toronto, Calgary/Edmonton and Vancouver for London and the South East of England and that sounds a bit like Canada.

…heavy public spending increases of this decade have not helped the challenged regions; in fact they may have increased their dependence on Southern taxpayers and further reduced their attractiveness to talented young people.

.nuff said. I think this goes without debate in the context of New Brunswick and Canada.

Population and migration. Between 1991 and 2004, London grew by 8.8 per cent, more than twice the rate for the UK as a whole. Scotland, the North East and the North West actually shrank. London and the South East are net attractors of young people.

Hey, sounds familiar as well. Calgary grew by over 20%, Toronto 15%, Vancouver 14%, etc. While New Brunswick, Nova Scotia, Newfoundland and Saskatchewan actually shrank.

Growth. If all regions had the same rate of growth as the South East over those ten years, UK output would be over £61 billion higher in 2004 (an increase of 6 per cent).

I have never seen this type of analysis in Canada. Not from AIMS, APEC, Fraser, Competitiveness & Prosperity, CD Howe, none of them. I don’t even think we even have contemplated the economic potential of getting places like Atl. Canada back online economically. But even at a conceptual level, it is not hard to realize that if Atlantic Canada was pumping on all economic sectors, the positive economic benefits to Canada as a whole would be in the billions of dollars annually.

Educational attainment. 26 per cent of London’s workforce has degree standard qualifications compared to 12.4 per cent in the North East.

While the differential in Canada is not as stark, it is quite high. There are three times as many post-graduate degreed people in Ontario than New Brunswick.

Regional differences have become much more accentuated as a result of the recent unprecedented increases in public spending. Certain regions are, in effect, becoming client areas dependent on state employment and state funding:In the North East, North West and Northern Ireland, nearly one in four households contain one or more members in receipt of incapacity benefit.

Amen to this statement. And rather than this being a potentially negative, Bernard Lord has been the #1 champion of more public spending. And the ratios here are about the same. Almost one in four NB families has a person on EI during the year (100k on EI over a workforce of 350).

London, the South East and the East have a third of the UK population, receive a third of public spending yet pay nearly a half of personal taxation.

This is exactly the reason why Alberta and Ontario should be first out of the gate supporting a plan to revitalize the Atl. Canada economy. They are the ones getting hit for the bill for Atl. Canada’s economic malaise. But you will never hear Ralph or Daulton calling for massive investment in Atl. Canada economic development. Go figure.

The ratio of public spending-to-economic output is 61 per cent in Northern Ireland, around 54 per cent in Wales and the North East and 47 per cent in Scotland. It is around 29 per cent in the South East and East and 34 per cent in London.

Touche. And not in the Apple vs. PC way (requires Quicktime).

The danger is that a vicious circle of economic activity will be created. As more and more people become dependent on the state for their jobs and incomes, there are fewer opportunities for small businesses to start up and employ workers; talented young people and modern industries – which are the lifeblood of future economic progress – will move from northern regions into London and the South East; further government resources will be redistributed into the northern regions, continuing the dependency cycle.

The grand finale. Sounds like Savoie, Bruce, Meek, Campbell, etc. found their way over to the UK.

This is good food for thought going into a provincial election, don’t you think?