In theory, this need not be a crippling blow for the national economy. In the above scenario, rational Ontarians should follow the money and migrate to Alberta to take advantage of the boom times.
But as a team of Bank Canada economists remind in an excellent new study (pdf), Canada doesn’t really work this way.
Labour tends not to migrate as the economic theory suggests it should. Between May, 2001 and May, 2006, Canada’s dollar appreciated 40 per cent and the Bank of Canada’s commodity price index climbed 63 per cent. That suggests serious change in the economic backdrop. Yet movement between economic regions – both within provinces and between them – was about the same as it had been over the previous 15 years, according to David Amirault, Daniel de Munnik and Sarah Miller, who compared census data from 1991, 1996, 2001, and 2006.
This stickiness isn’t because Canadians are immune to the pull of a better-paying job. The Bank of Canada economists organized their research around 73 economic regions, rather than provinces and territories. Their analysis shows willingness to move within provinces, say from Campbellton, in northern New Brunswick, to Moncton, a bigger and more dynamic city in the south of the province.
But there is something about provincial borders that impedes labour mobility. In 2006, population flows within provinces outpaced flows between provinces in 68 of the 73 economic regions. “Provincial borders are negatively related to migration flows,” the authors write. “This implies that obstacles to interprovincial mobility remain.”
There are some readily understood reasons for this. Distance, for example. Language also is a barrier to interprovincial mobility. Go back to Campbellton, a largely French-speaking community. It’s one thing to move a few hours south to Moncton, a fluidly bilingual city. It’s another thing to pack up and move to Calgary.
Chosen excerpts by Job Market Monitor
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