Overcoming Canada’s place-based disparities

A recent Bell Canada policy paper examines the causes and magnitude of place-based disparities in Canada. It is a timely piece, considering the CRTC hearing currently underway that is reviewing telecommunications in the Far North.

It is worth reviewing “Your postal code should not determine your economic future” [pdf, 290 KB], the public policy paper that inspired a recent Financial Post Op-Ed by Bell CEO Mirko Bibic.

The 21-page paper includes more than 3 pages of footnotes, with an interesting discussion of the growing concentration of population and economic activity in a very small number of major cities.

In 2021, Montreal, Toronto, and Vancouver represented roughly 35% of Canada’s total population, up from 29% in 1981. In the US, the three biggest cities (New York, Los Angeles, and Chicago) comprise just 13% of the national population. The 18 largest cities in the US represent a third of the US population.

In economic terms, Montreal, Toronto, and Vancouver are responsible for 37% of Canada’s economic output, contrasted with New York, Los Angeles, and Chicago making up less than 17% of the US economy. The paper shows that “in the five years prior to the COVID-19 pandemic, nearly two-thirds of net new jobs created in Canada were concentrated in Montreal, Toronto, and Vancouver.”

It is clear that there are place-based disparities in Canada, similar, but different from those seen in other countries, creating unique challenges for policy makers.

The key point here is that while Canada’s economy and population have grown in overall terms over the past few decades, the aggregate story misses big differences across cities and communities in every part of the country. University of Toronto political scientist David Cameron has warned that these divergent trends risk creating a growing gap in the expectations, needs and lived experiences of those in our major cities and those elsewhere in the country, including within Indigenous communities.

The paper suggests that the Great Divergence caused by these place-based disparities can contribute to a political climate “tilting in the direction of polarization.”

Scholars such as economic geographer Andrés Rodrígues-Pose have argued that the recent rise of disruptive political movements in advanced economies should be principally understood as an expression of place-based disparities – namely, among those who feel like their communities and own personal circumstances have “no future.”

As telecommunications professionals, we should endorse Bell’s proposition that “we have a collective interest in extending economic opportunity as broadly as possible.” Can telecommunications investment “diminish the influence of one’s postal code on their economic future”?

As the paper notes, Canada’s communications industry is investing about $10B to $12B per year on network infrastructure. This is among the highest level of investment among G-7 countries, on a per capita basis, or measured as a percentage of revenues. These investments have resulted in 94% of Canadians having access to broadband connectivity exceeding the CRTC target of 50/10 Mbps with unlimited service.

Indeed, as I recently noted, at year end 2020, more than 75% of Canadians had access to gigabit speeds, two and a half years before the UK reached that milestone.

More investment is needed to extend broadband service to Canadians in rural and remote areas, including the majority of First Nations communities. Mobile carriers are working to extend 5G capabilities and Bell notes that its network already reaches 82% of Canadians with 5G.

This point is worth emphasizing: extending high-quality, fast-speed broadband infrastructure across the country is key to fulfilling our collective goals of equity and inclusion. It is also an increasingly important determinant of economic outcomes, much like traditional policy tools. It is not an exaggeration to say that in today’s economy, network infrastructure is the foundation of economic growth and productivity for individual communities as well as the economy as a whole.

The policy paper calls for development of a place-based policy agenda, built upon four key pillars:

  1. infrastructure,
  2. capital,
  3. people, and
  4. institutions.

The paper concludes with an uplifting vision. “We are on the cusp of a future possibility where Canada’s unique economic geography is less determinative: where people can dream about big aspirations regardless of where they live.”

How do we get there? We need a combination of public policy and business-led initiatives.

The paper makes a strong case for a place-based strategy to boost economic growth and opportunity throughout the country.

Will leaders step up to seize the opportunity?

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