Are Rural People Better Off When Cities Prosper?

Are rural people better off when cities prosper? That’s one of the questions I asked myself when I read the recent report by the Conference Board of Canada “Canada’s Hub Cities: A Driving Force of the National Economy”. The report argues that government money (a portion of the gas tax) should be invested more in Canada’s largest cities than in smaller towns. According to this logic, Alberta would be better off if the gas tax generated by the smaller towns of Grande Prairie, Hardisty and Oyen were invested in Calgary or Edmonton rather than being distributed more evenly. According to the Conference Board of Canada, the economy of Alberta (as measured by the Gross Domestic product) would grow more, and all Albertans would be more prosperous if governments targeted the largest cities for investment.

I remember talking to a young Albertan some time ago who wanted to move from his parents’ farm and buy a farm on his own near Olds, AB. He put in a bid on a good working farm and found he was outbid by a lawyer from Calgary. The lawyer wanted a weekend country place. The farm land offered him scenic beauty but he had no time to be an active farmer. The lawyer turned around and hired the young farmer to farm the land for him. From the point of view of Gross Domestic Product, the value of farmland in the area increased because of this sale and therefore the wealth of the area increased as well. According to this way of measuring, the region became more prosperous. From the point of view of the young farmer, he went from being a prospective land owner to being a tenant – a journey his grandparents had in the opposite direction when they immigrated and homesteaded so many years ago. Is the community better off as a result of this shift? Has our collective wellbeing increased?

The Conference Board of Canada report assumes that an increase in economic activity in a region means that everyone is better off. This is clearly not the case. Saskatchewan’s economy can be growing even while the vast majority of its small towns are dying. A close reading of the report reveals a tiny footnote at the end that admits “that some of the communities that converge do so, not because their rates of GDP increases are so fast, but because their population is declining. This is not a happy story.” A better question to be asked is ‘are we better off’? Are we more healthy, more literate, more balanced, more community minded and more generous? Are we realizing the goals and values we cherish for our society?

The Canadian Index of Wellbeing is a new initiative sponsored by the Atkinson Foundation and chaired by former Saskatchewan Premier, Roy Romanow. It seeks to measure not just the growth in economic activity but the extent to which we are realizing our values and goals and whether we are leaving to our children a better world. It is developing a set of indicators that will measure “educational achievement, economic security, a clean environment and social equity.” With these kinds of measuring sticks we can distinguish between the kind of economic growth that depopulates rural Canada and the kind that promotes health and clean air.

Economics is not value free but its values are well hidden to the untrained eye. Congratulations to the Atkinson Foundation for helping us ask and answer the right questions. You can learn more about this initiative at www.atkinsonfoundation.ca/ciw.

First published in August 2006