Sean Speer is a professor at the University of Toronto’s Munk School of Global Affairs and Public Policy.
If the recent Council of the Federation meeting of the 13 premiers is any indication, this week’s meeting between Bill Morneau and his provincial and territorial counterparts will place a considerable emphasis on the importance of place.
It couldn’t have come soon enough. A renewal of alienation in Alberta and Saskatchewan, growing regional economic disparity, and a sharpening urban/rural divide are now among the biggest questions facing our society. Canadian political leaders will need to lean into the politics and policy of place.
It’s striking that this lesson needed to be relearned. The centrality of place is as old as the Bible. Yet, in recent decades, opinion leaders and policy makers across Western societies have come to diminish its significance. We were told that the “world is flat.” Some claimed to be “citizens of the world.” And others wondered whether the nation state would even survive the trend toward globalization.
Our political and policy debates tended to focus on global economic trends or how the national economy was performing. There was little recognition of regional or community experiences. As long as the economic pie was increasing, where it was increasing was mostly ignored. Place didn’t seem to matter any more.
Then something happened. Place came roaring back. Brexit and Donald Trump’s election, which are both sometimes described as “the revenge of places that don’t matter,” are the most spectacular examples. But there’s subtler evidence all around us.
Polling, for instance, consistently finds that nearly 60 per cent of Americans have strong attachments to their local community. Canadians aren’t much different. More than 40 per cent of us feel more attached to our province than to the country. And another third or more report a strong sense of belonging to their communities.
It’s not surprising then that we’re witnessing a resurgence of regional and local sensibilities. It’s far from obvious that they ever went away except among a small, unrepresentative group of highly educated and highly mobile professionals.
One extenuating factor is the knowledge-based economy’s tendency toward urban concentration. We’ve always had regional economic disparity. But knowledge-based industries – think for instance financial services or high-tech – are exacerbating it. These industries and firms tend to cluster in a small number of major centres because of labour specialization and knowledge spillovers. This trend is concentrating more and more investment, employment and opportunity in “superstar cities” and regions such as New York, Silicon Valley and Toronto.
The result is a feedback loop whereby talented people and dynamic firms beget more talented people and dynamic firms. Economists refer to this self-reinforcing tendency as “agglomeration.”
The effects are felt in both superstar cities, which are home to rising housing prices and growing inequality, and the places struggling to participate in the knowledge-based economy, which are starved for investment and opportunity.
Both require the attention of policy makers. They can no longer subscribe to the “U-Haul school of urban policy.” Expecting people to migrate to more dynamic, prosperous cities isn’t an adequate strategy. It will work for some but it’s not the answer for everyone. Canada needs a credible policy response to growing place-based bifurcation and its different manifestations.
A program to extend economic opportunity to all regions and places will necessarily take different forms. The American experiment with Opportunity Zones, which provide tax inducements to encourage investors to deploy capital to 8,700 economically distressed zones across the country, is a promising model. Decentralizing government jobs from provincial capitals out in to the regions is another. And a concerted effort to encourage international students to remain in places such as Thunder Bay, Cape Breton, N.S., and Trois-Rivières should also be a priority.
The key point, though, is that a politics and policy of place won’t be a libertarian enterprise. It’s the market’s efficient allocation of resources that is driving the trend toward urban concentration. Pushing the market economy to produce broader-based opportunity in rural and economically distressed parts of the country will necessarily require a role for government. We need to be fully aware of the potential risks including distortions, inefficiencies and rent-seeking. But these risks are worth it in pursuit of a more balanced and inclusive economy.
Canada isn’t, as Prime Minister Trudeau once called it, “a postnational state.” Instead it’s actually much closer to Joe Clark’s description of “a community of communities.” Our experiences and identities are rooted in the places where we live. It’s about time that Canadian policy makers remembered it.
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