Economic analysis

Did Nova Scotia just give up on its young people?

Not at all. A new labour-mobility agreement between Nova Scotia and Alberta will force the region to become more competitive, says one expert.

Alberta Premier Dave Hancock, left, looks on as Nova Scotia Premier Stephen McNeil talks with reporters at the annual Council of the Federation meeting in Charlottetown on Thursday, August 28, 2014. THE CANADIAN PRESS/Andrew Vaughan

Alberta Premier Dave Hancock, left, looks on as Nova Scotia Premier Stephen McNeil talks with reporters at the annual Council of the Federation meeting in Charlottetown on Thursday, August 28, 2014. THE CANADIAN PRESS/Andrew Vaughan

As part of the raft of new interprovincial deals ratified at the premiers’ meeting thus far, one that slid through somewhat unnoticed was an agreement between Nova Scotia and Alberta, which allows for the coordination of apprenticeship training in the skilled trades and promotes enhanced labour mobility between the two provinces. (The deal is very similar to an agreement between New Brunswick and British Columbia.)

The challenge posed by “enhanced labour mobility” for Nova Scotia, though, is that it’s already bleeding young workers to the west. Does this agreement institutionalize something in policy that has increasingly been a sad punchline of life in the province—that to make it in Nova Scotia, you have to get out of town?

We spoke to Marco Navarro-Genie, president and CEO of the Atlantic Institute for Market Studies, about what this agreement means.

Q: What do you make of the agreement?

A: It’s a guarded attempt at opening, but not opening the door too wide. That makes some sense to some extent, because I don’t think B.C. or Alberta wants to find itself with half the apprenticeship youth at their door, and at the same time I don’t think the Atlantic provinces want everyone to leave all at once, either. That’s not necessarily a bad thing. I think eventually, they will be open wider. I don’t think doing it all at once that quickly is good for the west or the east. I think caution and prudence is wise.

Q: What are the benefits for the east?

A: The benefit is probably twofold: in the larger picture, it’s the willingness for opening things up, and this is significant because the mentality that leads to opening is crucial for competition. It is a good and right thing to be concerned about the youth and the future, but if people are concerned about youth in a sort of central way, we have to be concerned about their prosperity. So this shows a bit of concern for their prosperity in the sense that we are lowering the barriers a little bit that prevent them from leaving, and that shows a concern for their welfare and their future.

From a market perspective, this is also a very good thing because it forces the region, or will down the line, to improve its economic condition. If we are to compete for labour, if we really want to keep young people in Atlantic Canada, and most of us do, then we’re going to have to do something about the economic climate here—not just to force people to stay, but to create an economic climate to attract people to come here and investment to come here.

Q: How exactly does labour mobility attract investment?

A: By itself, it won’t. In fact, by itself, it’ll just create a greater dearth of labour here that’ll make it problematic for greater investment down the line. But Atlantic Canada is sitting on a wealth of resources. Atlantic Canadians need to settle this question for themselves, whether or not they want to exploit these resources. With the exception of nuclear, which is problematic for political reasons, there is just about every kind of energy resource in this area, from tidal to wind to oil to gas. We need to decide whether we are going to put more emphasis into attracting more investment by setting up a better framework for exploiting these resources.

Q: When you say that the agreement is a sign that the province is looking to restore prosperity to young people, does that mean encouraging young people to leave the province to find work and hoping they eventually come back and invest in their communities and families in Nova Scotia?

A: In the short term, yes. But here’s another example: Newfoundland. At the collapse of the fisheries, a lot of people there went to Alberta, almost singularly to Fort McMurray. Once the Newfoundland and Labrador mentality started to change and there was exploration and exploitation of the same natural resources as we have, a lot of those people at Fort McMurray can return, get jobs, and be at home which is what they wanted to do to begin with. If Atlantic Canada got its show in gear in terms of energy exploration and exploitation, we could be looking at something similar; these folks would go west, gain valuable experience and training, and hopefully these people could come back here and be a great asset to a hopefully booming economy.

Q: Does this signal, then, that the government is looking to exploit its natural resources?

A: I think so. It may be a coincidence that yesterday, the Wheeler commission—a panel convened in 2013 to look at fracking, dubiously composed of sociologists and people who had absolutely no expertise in geology and that kind of thing—issued its report . It provides an opening for that exploitation of natural gas, provided there was a proper framework in place, and that has long been the clincher. Going from a knee-jerk reaction of “we want no fracking” to this wildly composed commission saying that this is something we should look at if we have the right framework, it opens up the debate. Certainly there is no reason why this kind of thing couldn’t be done here. Saskatchewan and Newfoundland are really great examples of that.

Q: Does this institutionalize the idea that you have to leave Nova Scotia to succeed?

A: No one wants to see their children go away so far. We can be proud that there are a lot of Atlantic Canadians succeeding in the oil patch in Alberta, and on a personal level that’s great, but on a sociological level, it’s not. But there’s a perfect storm going on here: the population keeps getting older,  because the young keep leaving, and that means a shortage of skills necessary for modern economies. A shrinking population also shrinks the tax base so taxation goes up, and as our population gets older and sicker, that taxes our system even more.

But who are we to keep young people pegged to this land unemployed? Often economists refer to creative destruction, and that’s what needs to happen. If you look back at some of the most dynamic economic areas in places like the United States—Detroit, and so on—they’re now depressed areas. The Prairies used to be an economic void, and look at them now. The world doesn’t stay static. Atlantic Canada needs to reinvent and renew itself. But it can’t do that with government programs that do not generate prosperity. For instance, in Nova Scotia, unlike any other province in the country, people get dental benefits until the age of 14 for free. When I asked why that was, one of the answers was, “Well, we need to keep people here.” That’s clearly not working. People want jobs. It’s not that they’re trading culture for money, they’re trading potential misery for the dignity and fulfillment of having employment. That’s a basic human need.

This interview has been edited and condensed.