Published in the Financial Post on March 22, 2012
By Philip Cross
Recently, the CBC released a DVD set featuring all its televised work of Glenn Gould. One of the interesting non-musical items was his hour-long film calledThe Idea of North, a reminder of the recurring if intermittent Canadian infatuation with our Northern frontier. We seem to be in one of those moods these days, with annual photo-ops of Prime Minister Stephen Harper in the Arctic and an array of investments to increase our presence in the North. Will this latest spike of interest in the North fare better than past episodes?
History is littered with the wreckage of past plans to develop Canada’s North. Diefenbaker’s 1958 election platform envisioning a “Canada of the North” never amounted to much, and he was soon tossed out of office. Charles Hays ran a rail line to the northern tip of B.C.’s coast in 1905, earning Prince Rupert its derisive nickname of “Hays’ Orphan” for most of the 20th century (Hays did not have to endure these taunts, having gone down with the Titanic in 1912). The Mackenzie Valley pipeline has been stuck in the planning stages for decades.
While Canadians enjoy reading about their Northern heritage in the works of Robert Service and Farley Mowat, their actions say the opposite. Instead of embracing the North, nearly 90% of us live huddled within 160 kilometres of the U.S. border. Clearly, we want to stay as warm as possible, without going to the extreme of becoming Americans.
Recently, however, there is growing evidence that Canadians can be induced to invest and live in the North if the price is right. While most analysts of the 2011 census focused on the decades-old story of the population share tilting to the West, what struck me was its shift from south to north. Six of the 20 fastest-growing census divisions were clearly in northern districts, led of course by the development of the oilsands in northern Alberta. But even some other provinces showed a shift to some northern areas away from the U.S. border.
In Quebec, the mining industry clearly is responding to the surge in Asian demand, especially for iron ore and gold. Firms say they will increase mining investment in Quebec by 62% this year to $4.4-billion, according to StatsCan investment data, almost as much as Quebec’s widely subsidized manufacturers will invest this year.
While Alberta and Quebec are the most obvious examples of accelerating development up North, more mining investment plans for 2012 are evident in all the major provinces, almost all in Northern regions. Voisey’s Bay in Labrador and Sudbury in Northeast Ontario are seeing a significant increase in mining investment, as are northern Manitoba and Saskatchewan as well as the Territories. Northeast BC continues to see capital pour into the development of its natural gas.
Almost all these areas saw above-average population growth between 2006 and 2011, and this will continue as investment increases. The only exceptions to these feel-good stories about Northern development were areas dependent on forestry, notably Northwest Ontario and the interiors of Quebec and BC. Extending a pipeline from northern Alberta to the northern B.C. coast would help offset some of the weakness in forestry. The opening of a container port in 2005 for imports from Asia at Prince Rupert has helped the reviled Mr. Hays look more prescient in this century than the last.
So will Canada’s North finally realizeits goal of becoming an Eldorado, a mythical place where wealth is acquired rapidly, or will the North return to being a vast but largely empty desert? With the increasing flow of people and investment into these areas in the pursuit of riches, not in response to artificial government incentives, there is some reason to be confident that this time really could be different. Indeed, given the reluctance of young people and immigrants to move North, one of the greatest challenges soon could be overcoming labour shortages.
Philip Cross is a research fellow at the C.D. Howe Institute and the former chief economic analyst at Statistics Canada.