My position on urbanity

I got my fingers rapped a bit in a meeting last week after making my soapbox speech about the need for dominant, strong and successful urban areas in New Brunswick. I was provided with the usual commentary about ‘Moncton getting everything’ or ‘Saint John will get everything now’ (presumably because of the six Cabinet members).

So, for the record, here’s my position on the issue.

1. Concentration of economic activity
Almost all forms of economic life are based on concentration. For every 500 people, you need a convenience store. For every 2,000 people you need a gas station. For every 5,000 people you need a pharmacy. For every 500,000 people you need a good airport. For every million people you need a patent lawyer. For every two million people you need an NHL team and for every 20 million, you need a hedge fund industry. (#s are approximate)

In any political context (municipality, province, country), similar things hold. If you don’t have concentration of population enough to support a specific economic activity, that economic activity will be supported outside the local market. For example, there are thousands of people working in the GTA supported by the economic activity in New Brunswick. This ranges from bank head offices to retail/wholesale warehouses to specialized legal and financial services.

I have never seen any good input/output models on this but I would suspect that at least 30% of the economic activity generated by New Brunswick is supported outside the province – mostly in large urban centres. If you add in the billions in pension and retirement funds generated in New Brunswick and spent on companies outside New Brunswick (just about all of our dough), that number would likely rise.

So, that is one of the main reasons why we need strong and dominant urban centres. Because there is economic activity that can only exist in urban areas and if we have no real urban areas to speak of, it will be done elsewhere.

New Brunswick is the only province in Canada to not have an urban area of at least 25% of the provincial population (Saint John and Moncton metro areas are both hovering at around 17%).

Everyone talks about ‘buying local’ now. It’s the new rage in local economic development. I have a little different take. Instead of buying a bushel of apples from your local farmer (as one example of buying local) how about having your hedge fund managed locally. Or how about the animated series your kids watch on TV produced locally. Sure, those activities require national and even international markets but they could be done here. Why not?

2. Intraprovincial ‘Equalization’
The reality is that you need successful and strong urban economies to provide the tax base for province-wide economic and social programs. The lack of urbanity in New Brunswick is a direct cause – in my opinion – of the province wide problems we have generating the tax base required to hold the line or reduce our dependence on national Equalization programs. In a nutshell, we need strong urban centres to have the funds to support successful rural development. This is the point that most people completely disagree with me on but I hold firm.

3. Urban/Rural Linkages
I have read and reported on this issue to many clients and on this blog. There is an overwhelming body of evidence now to suggest that the stronger the urban/rural linkages (social, economic and political) the better the economic outcomes for all. The more ‘orphaned’ an economy is from a dominant urban centre, there is a direct correlation with its inability to have a strong economy. For the most part, a dominant urban centre can have significant economic spinoff effects up to one hour to 1.5 hours commute. In New Brunswick, that would mean almost the entire population. That would also mean the need for a strong urban anchor in the north.

4. Conclusion
The Census population numbers will be published this morning. They will confirm what I have said all along. No need to repeat here (I’ll blog later on this). The reality is there are two potential futures for New Brunswick (in general terms) as it relates to economy and population.

A. Current Trend
New Brunswick’s population continues to decline at an increasing rate. We went from relatively strong growth in the 1970s to weak growth in the 1990s to decline (population) now in the 2000s. Following a similar pattern, here is what we will look like in 30 years.

New Brunswick +/- 600,000
Moncton Metro +/- 200,000
Saint John Metro +/- 150,000
Fredericton Metro ?? – less than 100,000*
All other areas of New Brunswick 150,000

*I think within 10-15 years without a significant positive change in economic realities, the Federal government will convene some kind of royal commission which will call for Maritime Union and I think that Fredericton could be the biggest loser here as the government would centralize in Halifax.

Of course, this scenario is definitely macabre. With a 600k population (and escalating government spending +38% under Lord), government programs would be drastically cut back. Hospitals would be all but centralized in urban centres. All that would be left in rural NB would be the absolute minimum economic activity (a mine, convenience store and maybe a small school). And you would have the desired 75% urban/25% rural split (desired by many thinkers these days).

My proposed scenario is this:

New Brunswick +/- 1.25 million
Moncton Metro +/- 375,000**
Saint John Metro +/- 325,000**
Fredericton Metro +/- 150,000**
All other areas of New Brunswick 350,000

*No political Maritime Union but very strong economic and political cooperation. No more fighting over the table scraps.

**The Greater Metro areas. Strong growth would be in the urban region. Hopefully we would get some good urban planning here.

It’s a funny thing. In my scenario you still have 73% urban but you have an actual increase in the population outside the three main urban centres.

You would have strong, dominant and growing urban centres. Yes, you would likely have more commuting in from peripheral rural regions (hopefully but smart buses or some other form of urban transit). But you also have successful, small towns based well calibrated to the needs of their local population but also with economic activity based in the 21st century not the 19th century.