Special to The Globe and Mail
Published Friday, September 23, 2016

What motivates interprovincial migration in Canada? Are people drawn to a new region by a perceived better quality of life? Or are they simply fleeing economic hardship and moving to where the jobs are?

While it’s difficult to generalize across all regions of the country, out-migration from Alberta shows that it’s a bit complicated. Sometimes migrants are pushed out, but sometimes they are pulled away.

In the most recent snapshot of interprovincial migration, Alberta is now seeing a net loss of migrants to both Ontario and British Columbia. Combined, these two provinces are the destination of nearly two-thirds of people leaving Alberta. That reverses a powerful trend of in-migration over the period 2010 to 2014. With the petroleum sector in a nasty slump and the province now stuck in a second year of recession, it’s neither surprising nor unexpected that more Albertans are leaving than arriving.

The graph above shows total out-migration from Alberta to Ontario and B.C. over the past 40 years. (The graph does not show net migration, which would show that in-migration to Alberta has generally outpaced out-migration). What stands out in the graph is that while there are occasional surges of out-migration to both provinces, the surges are not concurrent. That suggests the reasons Albertans move to B.C. are different than the reasons they move to Ontario. Out-migration from Alberta to B.C. swelled to nearly 8,000 per quarter in 1979 and 1980, and again in the early 1990s (see graph). These were years when Alberta’s economy was actually performing reasonably well – the unemployment rate in 1980 was a mere 3.9 per cent. In 1990, it was 6.9 per cent, which is high for Alberta but lower than B.C.’s rate of 8.4 that year.

There was another wave of out-migration from Alberta to B.C. in 2007. Labour markets in both provinces were doing well, but Alberta was still the stronger market. In that year, Alberta’s white-hot economy actually saw severe labour shortages; the unemployment rate was 3.6 per cent. Still, people kept moving to B.C.
This suggests that lifestyle, not economics, prompts Albertans to move to B.C. The mild climate on the coast, the hot, dry summers in the interior and the recreational opportunities throughout the province make it very attractive. There’s a reason why people retire to British Columbia.

Ontario, on the other hand, tends to be the destination of migrants who may simply be out of work opportunities. Massive waves of migrants moved from Alberta to Ontario during the downturns of 1984 and 1986, when Alberta’s unemployment rate was a miserable 11.4 per cent and 10 per cent, respectively. That stands in sharp contrast to Ontario’s economy, which was ramping up. Riding a wave of well-paying manufacturing jobs, its unemployment rate fell to a low of 5 per cent in the late eighties.

The pattern that emerges is one showing there are different reasons for out-migration from Alberta. British Columbia tends to draw people, regardless of economic conditions. Ontario, on the other hand, tends to receive those pushed out of a lousy job market.

Currently, both provinces are seeing rising migration from Alberta – a rare instance when the cycles are in sync. With the highest unemployment west of New Brunswick, Alberta’s tough economy is unfortunately driving some job seekers out of the province. Ontario’s economic growth is easily outperforming Alberta’s this year, but it’s hardly booming. The province’s unemployment rate is still near 6.5 per cent. That’s why there has been a rise, but not yet a massive tsunami, of migration from Alberta to Ontario. The opportunities in the latter are simply not all that much better.

British Columbia, on the other hand, is enjoying its day in the economic sun. With the strongest labour market in the country and an economy fuelled by offshore investment, B.C. is by far the preferred destination of job seekers from Alberta. Not only does the province offer plenty of jobs, there are daffodils in February in Stanley Park.

Indeed, if it wasn’t for the unattainable cost of real estate in the lower mainland, out-migration from Alberta might be higher still.
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Todd Hirsch is the Calgary-based chief economist of ATB Financial and author of The Boiling Frog Dilemma: Saving Canada from Economic Decline

Special to The Globe and Mail
Published Thursday, September 8, 2016


Still dazed by oil’s price collapse in 2014, Alberta’s economy is gradually finding its feet. All eyes have been fixed on the drama playing out in the oil patch, but all the while other sectors have been quietly developing new products and markets.

The biggest surprise has been Alberta’s burgeoning food sector. In an ironic twist that many didn’t see coming a decade ago, the province has returned to its original roots in agriculture – but this time it’s producing consumer food products for the 21st century and finding lucrative markets around the world. It’s not just for wheat, canola and cattle. It is for niche products such as organic honey, high-protein bison, award-winning gin, unprocessed cereal products and high-value greenhouse vegetables.

In fact, in terms of dollar value, food products have overtaken refined petroleum products as the largest manufacturing sector in Alberta. In June of this year, the total value of refined petroleum slumped to $971-million (seasonally adjusted), well below the glory-days high of more than $2-billion in May 2014. On the other hand, food manufacturing has grown steadily in value to more than $1.2-billion.

The chart below shows how refined petroleum has lost ground – and food has gained – in relative terms over the last five years. With the value of production in June 2011 set equal to 100, food manufacturing now has an index value of 122, while refined petroleum manufacturing has dipped to only 64.

Admittedly, the decline in refined petroleum products has been entirely due to low prices for products such as gasoline, jet fuel and diesel. The volume of production has remained constant, and if prices were to rebound, so would the value of refined manufacturing.

Alberta’s food manufacturing, on the other hand, has grown both in value and volume terms. New products and markets have lifted food to become the province’s most valuable manufacturing segment. Three factors that have provided the spark.

The first is changing consumer preferences in food and culinary experiences. This is not restricted to Alberta: Food consumers all over the world are demanding better quality, less processing and more transparency in nutritional content. The closer to the consumer a product is farmed and produced, the better. That’s a trend that gives Alberta (and indeed much of rural Canada) a competitive advantage.

Previously, Alberta’s smaller population and geographical distance from major markets made mass food processing uneconomic. The enormous factories in Toronto or Chicago could churn out packaged cookies, boxes of colourful cereal and cans of cooked vegetables at a price point unimaginable for a small, niche producer. That’s why small pasta manufacturers on the Prairies, for example, could never compete.
Now, the tables have turned and the advantage favours the small guys. Sales of mass-produced, highly processed foods have flat-lined. Consumers are willing to pay a premium for niche products grown and produced close to home. High-end restaurants go out of their way to promote their locally sourced meat, cheese and vegetables. Back in the 1980s, Calgary restaurants would never have boasted about the cheese from Sylvan Lake (about 90 minutes northwest). But today they do – and they can command a price premium for it.

The second factor is growing markets abroad for niche Canadian food products. Tourism from China is increasing – a major Chinese airline just started non-stop flights from Beijing to Calgary. It still has a lot of growth potential, but Alberta food producers can capitalize on Chinese interest in all things Canadian. (In a recent conversation, a shop-owner in Hinton, Alta., who sells specialty foods and gifts reported that a busload of Chinese tourists stopped in the other day and “bought everything in the entire store.”)

The third factor is government support. As much as the market libertarians don’t like to admit it, there are some sectors that need a boost from the public coffers to get off the ground. The Food Processing Development Centre in Leduc – funded by Alberta Agriculture and Forestry – has helped small, niche players in the industry test recipes and develop marketing experience.

Organic honey is never going to replace a barrel of West Texas Intermediate for supremacy in Alberta. But thousands of new food producers–small and niche as they may be–can provide better balance and diversity in the province’s economy.
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Todd Hirsch is the Calgary-based chief economist of ATB Financial and author of The Boiling Frog Dilemma: Saving Canada from Economic Decline