You know what I hate?

I hate it when economists try and boil everything down to a pie chart. The Globe & Mail is reporting this morning on a new report from The Centre for the Study of Living Standards called “The Impact of Interprovincial Migration on Aggregate Output and Labour Productivity in Canada, 1987-2006”. The report concludes:

The increase in interprovincial migration in Canada, and in particular the large net
in-migration to Alberta, has contributed to output growth. In 2006, it estimated that
interprovincial migration added nearly one billion dollars to the Canadian economy when
output is expressed in constant 1997 dollars, and nearly 2 billion when expressed in
current dollars.

Essentially, what they are trying to say is that taking 2,000 people a per year (net) out of New Brunswick (8,000 per year out of Ontario) and moving them to Alberta is really good for the national economy – to the tune of $2 billion per year in ‘output’ (all provinces combined).

Now, this same group a few years ago issued a report that recommended the federal government provide financial incentives to Atlantic Canadians on EI to move to Alberta.

OK, let’s think this through. The CSLS has this as its mandate:

[The CSLS] is a non-profit, national, independent organization that seeks to contribute to a better understanding of trends in and determinants of productivity, living standards and economic and social well-being through research.

Put aside productivity for a moment. How does the CSLS pushing public policy makers to empty out certain regions of the country to fuel the growth of other areas ‘contribute to a better understanding of the determinants of ‘living standards’ or ‘social well being’?

Make no mistake. There is very little ideologically neutral research. This report goes to great lengths to make the case for more mobility of people from poor to rich areas.

I have a little different view. Call me a contrarian.

The Globe’s headline reads:

Migration west adds $2-billion to national economy
My headline would read (if I could get published):

Migration west over time seriously eroding the social and economic fabric of whole regions of the Canadian economy…

..which could lead ultimately to serious social unrest.

You see most (or many) economists just look at numbers. They are not so good at the human side of the equation.

I have said before that the free flow of goods, services, capital, ideas and people within a country is healthy for a national economy. When one area overheats, another one should rise. When there is a surplus here, it should feed a deficit there. I, on an economic level, have no problem with that.

But my position assumes a two-way flow. That there will be ebbs and flows. A sustained one-way flow for years (now moving into decades – New Brunswick has exported more people to other provinces than imported for 14 straight years) leads to serious social and economic challenges.

Consider an analogy from the corporate world (I know, indulge me). If an automobile company starts to lose market share to another (say New Brunswick Auto Co. Inc. NBACI as the former and Alberta Auto Co. Inc. AACI as the latter), it will start to take increasingly serious measure to protect its market share. Eventually, market forces will dictate radical changes or the NBACI will either go bankrupt or be acquired.

Now, consider that the NBACI and the AACI are both partially owned by the Canadian Auto Co. Inc. CACI. The CACI may continue to cross-subsidize the NBACI with profits from the AACI (like GM has done for years with its brands) but eventually if the NBACI doesn’t become profitable, the CACI will shut it down.

Now, in the aggregate economic sense, maybe the CACI is better off with out the NBACI.

But we are talking about freakin’ cars here – not communities of people that have existed for hundreds of years.

So, all this to say that I think the CSLS is a front for the Alberta government. It’s not about social well-being at all because social-well-being is about community and while people may be better off financially by moving to Alberta – you can’t tell me that breaking up families, social networks and communities to the scale that is going right now is good for the social well being of Canada.

Again, I don’t blame Alberta. Giddy up. I blame public policy makers in the poor provinces and nationally who use studies like this to ease their consciences. No pain, no gain. They say.

I realize that the de facto public policy advocated both federally and provincially for at least the last 15 years was to slowly empty poor regions of ‘surplus’ people to areas of Canada that need them. This is obvious by the way governments’ are spending their money and writing their policy.

But I am not sure they haven’t replaced one problem with another. Communities with high unemployment and low productivity because of very high seasonal employment are a drag on public finances (directly and indirectly). That labour would be better used in Alberta (from a technical perspective). But what is the bigger goal here? What do you do to a country when you slowly erode whole regions to feed others?

I gotta go but I’ll make one last point because it is huge.

When you read this report, you will likely say ‘yikes’ when you see the Ontario out-migration figures. An average of 8,000 out per year since 2001.

Well, don’t lose your shorts.

Ontario receives more immigrants per year than Alberta, Manitoba, SK, NB, NS, PEI and NL combined.

Heck, Moncton has a positive in-migration from Ontario (the last time I looked was 2004). When you are bringing in hundreds of thousands of immigrants, losing a few people to Alberta is not that bad.

New Brunswick, however; and many other provinces, has the out-migration and virtually no immigration.

This is a massive difference.