A Tale of Two Economies: Leveraging Regional Immigration Strategies to Enhance Growth

January 19, 2017
Jock Finlayson

Two key factors will determine long-term growth in BC’s economy: productivity performance, and the extent to which the labour force expands over time. The hurdles to achieving long-term growth include an aging population, a low natural birth rate, and intense global competition for talent. Ongoing urbanization and widening gaps in economic opportunity that disproportionately impact many rural and other resource-reliant areas are also feeding into the story of two increasingly diverging BC economies.

Recent immigration flows and settlement patterns are an important part of the explanation. Put simply, the vast majority of new immigrants in BC choose to live in the already capacity-stretched[1] lower mainland. Most other B.C. towns and almost all rural areas attract few newcomers. An inability to expand the labour pool to sustain and grow regional economies creates a risk of long-term stagnation/decline for some communities.

A recent report found that BC will need an extra 20,000 to 32,000 skilled workers annually between 2017 and 2025 to fill projected job vacancies.[2] As the natural birth rate—the lowest in Canada[3]—declines, increasingly we must look to foreign sources to expand the talent pool. In fact, in the not-too-distant future, immigration will be the only source of significant population growth. In the absence of a steady inflow of economic class immigrants willing to locate outside of the lower mainland, the province may come to be characterized by ever increasing regional disparities and persistently lagging economic growth in a number of regions.

Source: BC Stats, BC Regional District Migration Components, International Immigrants to BC.

Looking back over the last five years, regional immigration patterns show the vast majority of newcomers to BC settling in Metro Vancouver and the Fraser Valley. Only a small number of immigrants have ended up elsewhere in the province.

In this circumstance, there may be a role for regional immigration strategies to attract newcomers. Such strategies could market the appeal of the lifestyle afforded by smaller communities, highlighting employment and business investment opportunities, with an emphasis on housing affordability relative to the over-priced Metro Vancouver market. Other steps that could be taken to persuade more economic class immigrants to consider areas of BC beyond the lower mainland include the following:

  • Government could fast-track immigration for appropriately skilled newcomers and temporary foreign workers willing to locate in non-urban regions for at least five years.
  • Communities can collaborate to market regional business opportunities to potential entrepreneurs or investors from outside of Canada, and look to immigrants to facilitate business succession planning at the local level.
  • There may be scope to use homestay programs for international college and university students in more communities across BC, with the option to pursue fast-tracked citizenship after graduation.
  • For essential job openings where there are demonstrated labour shortages in particular regions, the federal government could exempt employers from having to obtain a Labour Market Opinion before hiring foreign workers.
  • The province and local/regional governments could work to leverage current tourism initiatives to encourage visitors to consider investing in local businesses.

We believe the BC economy would gain if immigration patterns shifted so that future waves of newcomers were more widely dispersed across the province. This would help to invigorate communities, improve the supply of labour, and ease the pressure on land and housing prices in the increasingly crowded and costly lower mainland. Community and business organizations must be in the vanguard of efforts to attract and welcome migrants. But there is a role for senior levels of government to support the work of local communities and employer groups, and also to accelerate the integration of newcomers after their arrival.

The academic evidence confirms that immigration is an important factor driving economic growth and advances in prosperity.[4] It is time to start thinking about how to spread the benefits of immigration across more areas of the province.

[1] 53% of BC’s population is located in less than 1% of the total provincial land area; lower mainland = 2,877 km2 / BC = 944,735 km2.

[4] See Florence Jaumotte, Ksenia Koloskova and Sweta Saxena, “Immigration and Economic Prosperity,” voxeu.org/article/immigration-and-economic-prosperity, January 12, 2017, and the sources cited therein. The authors are economists at the International Monetary Fund.

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