There doesn't seem to be as much regional grievance in Canada. Let's keep it that way.

If you listen to people who are trying to explain the rise of Trump, Brexit, far right parties in Europe and beyond (although I think the term ‘far right’ has been overused) and even in many emerging economies they will point to the large numbers of ‘left behind’. In general, many experts in these countries feel that free trade, migration, open investment flows, etc. has been good for most people but a large number either were left behind or felt left behind.

Of course it is hard to tease out the differences between economic, social and cultural grievances. My economic situation might have improved but now I have to ask people their preferred pronouns and drink through paper straws. My economic situation might have improved but all these new people that moved in are eating the cats and even the dogs. I won’t even attempt to make sense of this. I’ll stick to the subject I know a bit about – the economic grievances.

It has always been interesting to me that Canada has not seen the level of economic grievance as in the US or Europe. In fact, in Canada, most of the ‘economic’ grievance seems to be among the rich – not the poor -(e.g. Alberta and Saskatchewan) decrying how much of their wealth is being siphoned off to prop up Quebec and the Maritimes.

My sense of it is that the Canadian economy hasn’t seen as much disruption as other places. Atlantic Canada never really had much manufacturing. Since WWII it has basically been the policy of the national government that manufacturing in Canada will be sited in the Montreal to Windsor corridor. When NAFTA came in and a more open approach to trade and investment flows – places like New Brunswick lost a little manufacturing – as an example food manufacturing in Moncton – but there wasn’t as much to lose - you didn’t see the same disruption as in places like Ohio and the Rust Belt.

And, as I have written elsewhere, places like Atlantic Canada also developed new industries (e.g. offshore oil and gas, call centres, IT) that offset some of the losses and combined with a more generous social safety net, there wasn’t as much perceived economic dislocation.

Now you have the Hillbilly Elegy guy as US VP and parties in the UK falling over themselves to promote the best “level up” plan. Have you heard a single politician in Ottawa talking about levelling up Atlantic Canada? Or northern Ontario?

That brings me to the point of today’s musing. I think we could see in Canada the kind of economic cleavage as in the US and Europe. We haven’t had much of an economic downturn in Canada in the past two decades or more. Any kind of sharp recession or federal government attempt to cut spending could disproportionately impact Atlantic Canada. Increasing the cuts to immigration and international students could curtail the region’s recent population growth. Of course, the US president’s obsession with Canada could hurt this region a lot.

I can’t say I was shocked when I looked the last 20 years of economic growth in rural (technically non-CMA) New Brunswick and Nova Scotia (PEI doesn’t have a CMA). The non-CMA economy in New Brunswick has grown more slowly than all other provinces in Canada by a wide margin. Remember this includes CAs such as Miramichi, Bathurst and Edmundston.

The numbers in the table below are not inflation adjusted. If they were, you would see that real GDP in non-CMA NB has declined significantly in the past 20 years (for an example, the nominal GDP province-wide is up 92% between 2001 and 2021 but real GDP growth (chained 2017$) is up only 24%).

I take away from this that we need to do more to develop the economy outside of the three CMAs. If you look at the provinces with robust GDP growth in non-CMA areas you see the common denominator – natural resources development – natural gas in BC, oil and minerals in SK and Newfoundland and Labrador. I was a little surprised at the Manitoba numbers so I looked - crop and animal production real GDP up more than double, oil and gas extraction GDP up 3X, meat product manufacturing up 176%, etc.

If we in New Brunswick and Nova Scotia want to get back to 2.0-2.5 annual real GDP growth we will need more natural resources development. If we want to build a stronger private sector economy and insulate ourselves somewhat from the federal government cutting board, we will need more natural resources development. This could be mining or green energy or aquaculture or agriculture/food production. It could be more value-adding of resources.

We have opportunities for economic development in the cities. I have written extensively about this but I think in the longer run – to buffer ourselves from more Trumpish shocks and from the growing backlash against open borders, we should also focus more on natural resources development. Where automobiles and medicines get manufactured will be hotly debated and fought over. The development of natural resources is not the same. They are a geographically-specific asset.

I am thankful that Canada has not seen the kind of regional economic grievances that have emerged in many other places. It’s kind of a relief that it is people in the rich provinces that seem to be the most aggrieved.

But it is certainly possible as we move into this new world that a grievance culture may not be far behind. Maxim Bernier is not that old. He’s only 45.

Mark Carney is talking about cutting ‘expenses’ to make more ‘investments’. The cutting could disproportionately impact this region and, historically, ‘investment’ tended to mean the biggest urban areas (think high speed rail from Quebec to Toronto or R&D dollars into the UofT). He hasn’t said much about immigration but I worry his clique of economist friends lean towards even more cuts.

Pierre Poilievre and his folks talk about the good old days under Harper when there were much fewer immigrants coming to Canada.

What I want to hear from our federal politicians is that they are committed to developing national policy and programming that reflects the uniqueness of the regional and provincial economies. If Toronto wants fewer immigrants, fine but don’t penalize Cape Breton.

Someone told me recently that Canada generates less GDP from ocean industries - per km of coastline or per capita - than most other countries that have long ocean coastlines. That should be a national concern.

There doesn't seem to be as much regional grievance in Canada.

Let's keep it that way.