21 December 2007

Buzz kill

vocm.com, known to some as Voice of the Cabinet Minister, was suitably gushy: "The tide may be changing."

Sorry, dears, but one spot does not a trend make.

Others were more factual and straightforward in their reporting, like say cbc.ca/nl:

The population of Newfoundland and Labrador is seeing its biggest increase in 15 years, according to numbers released Wednesday by Statistics Canada, and it's all down to moving Albertans.

The Telegram relegated the story to a small sidebar.

The story is quarterly population statistics from Statistics Canada that shows the first quarter of net positive in-migration for the province since 2003.

Not surprisingly, labradore puts the thing into a different perspective, something that is sadly lacking from popular commentary and media coverage.

popchangeAt right is a chart showing the quarterly net population change figures for this province.

Take a good look at the numbers.

Continuing population decline every quarter, save for a few. The cause of the declines in the 1990s was undoubtedly the combined impact of the cod moratorium and the relative weakness of the rest of the provincial economy.

But take a notice of the point made at labradore.

The quarters preceding the latest one have been marked by net population drop. Some quarters were near the largest drops in the past 15 years.

The trend is still downward.

Overall, the population trends remain consistent with projections from the provincial government's own statistics analysis division and those trends have been forecast since the early 1990s. The trend will likely remain downward for some time.

Now for those into facile labelling of things, for those who find it comforting when everything fits into a pigeonhole - like say a few reporters and editors [read the comments sections] - this observation will be seen as further proof of things being "anti-Danny" or, oh horror, of being "negative."

Yes, Bond Papers is a buzz kill.

But that's really a bit like the guy in high school who had a theory. If he studied for the physics exam stoned and wrote it stoned, he should be a genius. Sadly, he got 12 pages of his own name. One of his buddies, who used the same theory, wound up with a line drawing of his family jewels that came from a cross between Grey's Anatomy and what we presumed was his own delusional self-image.

Those of us who pointed out the error in the deluded idea before they wrote the exam were well, fairly predictably labelled as "negative". Nothing we said killed the buzz as much as the mark the guys received for their efforts.

As Bond Papers has noted several times already over the past three years, the demographic changes in Newfoundland and Labrador have several components each of which poses policy challenges for the provincial government.

The population is growing progressive older, on average, for one. In relatively short order, the dependent part of the population - those under 15 years old and over 65 - will be larger than the workforce. That means, in part, that the economy has to be more productive; each worker must be more productive than it is today just to hold things steady. Incidentally, part of the basis for the 1992 Strategic Economic Plan was the understanding of these long-term trends, the state of the economy at the time and what needed to be done to meet the challenges coming up to 2012.

The older population - the changing mix of age cohorts - means that among other things spending priorities need to shift. Within health care, long-term care will become relatively more important than acute care. The school-age population will likely decline, meaning that we will have fewer students and hence a change in education spending. New schools will be needed in some places and in others, schools will be closing. Take a look around the province and see the number of communities where the average age is above 55 and there are simply no children and very few if any families of child-rearing age.

The population distribution is also changing within the province. People are moving away from smaller communities and towards the larger centres. Increased mobility hasn't changed that; people still travel to the larger centres to find key services. Where public services are located and where new ones will be needed will shift as the population changes.

The declining total population, the one that gets the most political attention is another one. But oddly enough, it's the one the provincial government can do the least about. Government doesn't create jobs; it creates a climate in which business develops and jobs are created or maintained.

The provincial government has lately focused on this one aspect - the gross total population - especially as it seems to involve the skilled workers needed for large construction projects. There are a couple of observations.

First, given the nature of a local economy built largely on natural resource production, the size of the population as significant an indicator of economic health as in other economies. Some of the wealthiest countries per capita on the planet have small populations. There simply isn't a magic number which indicates a 'good' population for Newfoundland and Labrador or anywhere else. So, without a number to aim for, there is nothing to know when any government efforts are succeeding or failing.

Second, the labour demand needed for constructing everything from offshore platforms to energy projects will be met by the private sector. Much of the work will have to be done in the province anyway, like say the gravity-base for Hebron. As for the other stuff, like say the topsides on that project, if the provincial government hasn't already given permission for the operators to do it somewhere else, the private sector will find the labour and control costs to deliver it. What can be done here will be done here.

Do a little reverse engineering for a moment. Faced with a labour shortage due to the hyper-demand of its economy, the Government of Alberta didn't launch an advertising campaign and talk about chartering jumbo jets to fly the Alberta wing of the diaspora home. Nope. The private sector tackled it. The private sector companies doing the work know their skill needs; they recruit based on the skill-sets the need and as long as the people are willing to come, have the qualifications and can do the work when needed, they get hired.

When you send a bus to pick up bodies what you get is a busload of bodies. And before anyone notes that obviously the recruiting will be done on a skills basis, bear in mind that the major focus of government energy on the population front has been to talk of bringing the homing pigeons back. It isn't about skilled trades at all; it's about people of the right ethnicity. It isn't at all obvious that any provincial government apparently focusing on ethnicity and population will suddenly realize that a lot of the ex-pats don't have the skills needed for industrial construction and won't be able to acquire them within the required time frame.

The surest buzz kill or buzz drag in the boom time around the corner will be having a provincial government that focuses on things it doesn't do well, can do little about, or isn't about creating the environment in which the private sector can thrive.

And for those who have doubts about the private sector and the oil industry, just look at what the local private sector has been able to do. Ask Rob, or Fraser or Jerry just to name a few.