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TO THE POINT: Newfoundland and Labrador’s ‘aging and stagnant population’ about to turn labour force around

A representative of Irving-owned Kent Building Supplies confirms there will be lay-offs in Liverpool
JD Irving Limited, which owns Kent Building Supplies, is a good example of a company recognizing the need for a diversified workforce, writes Don Mills. - File
Don Mills
Don Mills

If Atlantic Canada leads the country in any category, it’s having the highest unemployment rates.

Historically, the region has suffered from too much labour supply and too little demand for that labour. Chronic under-employment and unemployment has been a constant. This is about to change, mainly as a consequence of an aging and stagnant population in Newfoundland and Labrador.

High unemployment rates – generally driven by low growth – are bad for the economy, and is partly a consequence of little or no population growth since the 1990s. This has been particularly the case over the last decade or so; between 2008 and 2018, there has been little real job growth in Newfoundland and Labrador.

The number of taxpayers has remained relatively static over the last 10 years - about the same number of taxpayers have been saddled with the ever-increasing costs of public services. It’s not surprising Newfoundland and Labrador’s highest marginal tax rate is 51.3 per cent; it's one of the consequences of no real job growth. The distribution of the population in the province - more than twice as many people live in rural communities relative to the Canadian average - has resulted in limited full-time employment opportunities for too many. The lack of population growth has contributed to weaker economic growth generally and an under-performing economy across much of the region, except Prince Edward Island, where a consistently-growing population has fueled the fastest-growing economy in the region in recent years.

Oldest population in Canada

Another consequence of lack of population growth is an aging population, driven largely by baby boomers. It's no surprise that Atlantic Canada has the oldest population in the country. The lack of newcomers coming to the region has not compensated for an aging population to the extent it has elsewhere in Canada. The good news? Unemployment rates will continue to fall as a result of an aging workforce and a large number of retirements over the next decade. The bad news? If nothing is done, it will be difficult to keep even our relatively weak economy going.

Not only is Atlantic Canada the oldest population in the country, it has the lowest percentage of the workforce replacement cohort (those 15 years or less). The gap between those 65 years old and those under 15 years old is the largest in the country; there will not be enough new workers available to replace those about the leave the workforce in large numbers. In other words, Newfoundland and Labrador will need to attract workers from elsewhere to grow the current and future workforce and fill the jobs of those retiring from the workplace over the next decade.

How significant is the challenge for Newfoundland and Labrador? It’s anticipated there will be 58,900 (+61 per cent) more 65-year-olds living in the province in 2030 than there were in 2015. This means that Newfoundland will need to attract and retain an average of 3,800 newcomers to the province to ensure an adequate labour force going forward. In the last year, only 1,275 immigrants were attracted to the province. Simply put, the province needs to import more workers to keep the economy growing at its current pace.

Necessary diversity

The good news is that Newfoundland and Labrador finally has an immigration strategy. The bad news is that the target for population growth (1,700 per year by 2020) appears to be inadequate to ensure that a sufficient labour force is available to keep the current economy growing. To take advantage of the economic benefits achieved by Canada through population growth over the past five decades, Newfoundland and Labrador needs to increase its population to the national average of one per cent each year or more than 5,000 people per year. It is worth noting that the province has the lowest percentage of its population that is foreign born (only 2.4 per cent compared to the Canadian average of 22 per cent).

Private sector companies must do more to diversify workforces by ensuring there are opportunities for those coming into the province with different cultural and linguistic backgrounds. The private sector must become champions of diversity and supporters of immigration. It is important not only to attract but retain newcomers to the province.

JD Irving Limited is a good example of a company recognizing the need for a diversified workforce. Recognizing the growing labour supply issue, the company has appointed a director of immigration for this very purpose. The willingness to hire immigrants will be a key determinant of retention of immigrants in our region. The private sector must lead in this regard.

There are other opportunities to grow the workforce that should be considered, including retention of youth, which will become increasingly easier as baby boomers retire and open up job opportunities. This phenomenon will also help in the repartition of Newfoundlanders back to the province who left for economic opportunities elsewhere.

The additional challenge for Newfoundland and Labrador is the ability to attract newcomers to other parts of the province other than St. John’s. This will require specific population growth strategies for the larger communities outside of St. John’s – such as Corner Brook, Stephenville, Port-aux-Basques, Marystown and Labrador City, which all suffered population lost in the last five years.

Don Mills is the former owner of Corporate Research Associates and a recognized expert in data trends in Atlantic Canada. After selling his business recently, he remains passionate about data — and learning the guitar. He can be contacted at dmillshfx@gmail.com or on Twitter at @donmillshfx.

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