What About The Rest?
Posted November 12, 2012
Unemployment in Halifax in October was 5.4% compared with 9.2% for the province as a whole and 7.4% for Canada. No sizable city east of Saskatchewan had a lower unemployment rate. It is nice that Halifax has had some announcements about more jobs but the rest of Nova Scotia might be wondering why it is getting the attention.
It is nevertheless true that a strong economy in Halifax is good for the rest of the province. More importantly, the kind of job programs being announced for IBM and Projex are difficult to locate elsewhere because it is harder to attract employees. Some of the jobs announced for Yarmouth by Register.com went unfilled because people with the right skills could not be hired. Sydney was included in the IBM deal under pressure from the province. This is not peculiar to Nova Scotia—high tech workers everywhere tend to prefer large urban environments.
Some observers like to point to Michelin as an example of what is possible for other parts of the province, and it is certainly to be hoped that Michelin will be here for a very long time. But it stands almost alone in contrast to a long list of expensive failures that were supposed to make things as diverse as televisions, Volvos and heavy water for Candu reactors. Most recently, the $60 million invested in DSME Trenton has produced very disappointing results. And even Michelin has required frequent additional incentives.
The vibrant rural economies that exist in Canada are typically based on resources—for example, mining in British Columbia and Labrador; oil and gas in Alberta, Saskatchewan, and Newfoundland; grains in the prairie provinces; hydroelectricity in Manitoba and Quebec.
For many decades forest products were very important to Nova Scotia. Unfortunately a depressed US housing market and a long term decline in the paper business have led to chronic weakness in the forestry sector. This is likely to continue in spite of the hundreds of millions that have been spent propping up the industry.
So we need to look elsewhere, specifically to areas where the province has natural advantages. In seeking to support growth the policy context is usually more important than handouts from taxpayers. The government has a mixed track record.
- The province has been resolute in its support of the aquaculture industry. Those who argue that it should be confined to land-based pens would throw away the natural advantage that our extensive coastline provides, and would make the industry a high cost producer. Aquaculture does need regulation, particularly to prevent it from harming productive lobster waters.
- Wind is now a useful part of our electricity generation. The pricing regimen for tidal projects has encouraged experimentation. But the obsession with Muskrat Falls power means that there will be less interest in developing the tidal resource and less opportunity to use it if a viable technology is found.
- Offshore oil exploration is showing some real life as a result of the investment in hydrocarbon basin modelling. But the moratorium on fracking considerably diminishes onshore exploration.
- Mineral exploration, chiefly for gold, is encouraged by a program of small grants. On the other hand uranium exploration, which has been a major contributor to Saskatchewan’s economic success, is banned in Nova Scotia.
Almost every form of resource development has its detractors. Sources of employment that have been opposed include quarries, open pit mines, salmon farms, oil drilling, tree harvesting, wind turbines, and mink farms.
Resource development always comes with environmental issues and needs appropriate regulation. Rural communities that want a viable economic future must be willing to embrace the opportunities. Government needs to be an active promoter.
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