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Overview and description of publications
Overview of the research programAll societies have to make economic choices. These choices include what goods and services are produced, at what price they are exchanged, and how they are distributed across the population. One often-ignored question is where economic activity takes place. Understanding the location of economic activity is important because it is at the scale of towns, cities and regions that Canadians participate in economic activity. That is, it is at these relatively small geographic scales that people live out their economic lives—find jobs, purchase goods and services, buy a home, etc. The Economic Geography research program has been established to use Statistics Canada data to better understand the spatial organization of Canada’s economy. In other words, as Dicken and Lloyd note in Location in Space, economic geography is concerned with where various elements of Canada’s economy are located, how they are connected together in space, and the impact of structural changes to the Canadian economy on the location of economic activity. Urban and rural economiesOver the past century, Canada has changed from a primarily rural, agrarian-based economy to a highly urbanized, industrial economy. This reflects a concomitant shift in employment opportunities and markets towards cities. Today, cities are the Canadian economy’s engines of growth. Yet, rural parts of Canada account for a significant share of employment and output. Consequently, both rural and urban economies are important subjects of study. By their very nature economies are not static, but continue to evolve over time. These economic changes, be they driven by new types of technology (e.g., information technology) or the implementation of new government policies (e.g., free trade), often have a differential impact on rural and urban economies. The purpose of research undertaken under this broad theme is to measure economic change in rural and urban economies and to help us better understand what factors explain the evolution of these economies. To date, research related to this theme has looked into the following aspects of Canada’s urban and rural economies:
Urban and rural economies publicationsParalleling trends in the U.S., there has been a shift in the location of manufacturing employment in Canada. Between 1976 and 1997, manufacturing employment shifted from the cores of large cities to their suburban fringes. Over the same period, the rural share of manufacturing employment also increased. In contrast to the U.S., the average wages of manufacturing production workers in rural parts of Canada are higher than the wages of manufacturing workers in the centres of large metropolitan regions. In part, this is due to the greater prevalence of high wage industries in rural areas (e.g., pulp and paper industries) and low wage industries in the cores of large urban centres (e.g., clothing industries). Baldwin, J.R. and W.M. Brown with T. Vinodrai. 2001. Dynamics of the Canadian Manufacturing Sector in Metropolitan and Rural Regions. Analytical Studies Research Paper Series 11F0019MIE2001169. Analytical Studies Branch. Ottawa: Statistics Canada. The Toronto and Vancouver city-regions have increased their share national manufacturing employment between 1976 and 1997. Montreal, on the other hand, has declined in terms of its relative share of Canadian manufacturing through the late 1970s, 1980s and 1990s. Over the same period, Montreal's share of manufacturing employment in Quebec also fell. Vinodrai, T. 2001. A Tale of Three Cities: The Dynamics of Manufacturing in Toronto, Montreal, and Vancouver, 1976-1997. Analytical Studies Research Paper Series 11F0019MIE2001177. Analytical Studies Branch. Ottawa: Statistics Canada. Manufacturing production workers in the cores of large urban regions experience the most stable labour markets. Production workers in rural parts of Canada face the most unstable or volatile labour markets. Across local urban and rural economies, employment growth is more stable in regions that are more diverse, that have lower than average growth rates, that are home to larger plants and that export a higher percentage of their products. Baldwin, J.R. and W.M. Brown. 2003. Regional Manufacturing Employment Volatility in Canada: The Effects of Specialization and Trade. Economic Analysis Research Paper Series 11F0027MIE2003005. Analytical Studies Branch. Ottawa: Statistics Canada. Canada’s high-tech revolution was disproportionately a “big city” phenomenon. During the 1990s, Ottawa cemented its position as a high-tech city. But Toronto was the true employment centres for firms in information and communication technology (ICT) industries. Calgary and Montréal enjoyed strong employment gains in research and development-intensive science industries. During the 1990s, employment growth in Canada was fuelled by job gains in the technology sector. One out of every six jobs created during the decade was in the ICT sector. In Canada’s largest cities, ICT industries accounted for 4 out of every 10 new jobs. The growth of ICT industries in large cities is consistent with the general tendency for firms in new industries to locate in cities with larger populations. However, the size of the local economy is not the only factor that has a positive influence on the location decisions of ICT firms. The level of industrial diversity in a local economy also has an impact. After controlling for differences in the size of local economies, cities with more diverse economies are the ones with larger shares of their local employment base in ICT industries. This suggests that new economy industries are drawn to large, diverse cities because these centres provide them with the wide variety of services and specialised labour that they require to grow. Beckstead, D., M. Brown, G. Gellately and C. Seaborn. 2003. A Decade of Growth: The Emerging Geography of New Economy Industries in the 1990s. The Canadian Economy in Transition Research Paper Series 11-622-MIE2003003. Analytical Studies Branch. Ottawa: Statistics Canada. Between 1992 and 2002, a time of significant structural change in Canada’s economy, the average Canadian city became more industrially diverse. Small cities, those with fewer than 100,000 people, increased their diversity by 9%, while medium-sized cities, those between 100,000 and 500,000, increased theirs by 6%. In contrast, large cities, those with greater than 500,000 people, became slightly less diverse, declining by 3%. The level of industrial diversity of a city is closely related to the size of its population. The smallest urban areas are the least diverse and the largest urban areas are the most diverse. The positive relationship between population and industrial diversity was particularly strong from smaller urban centres with a population less than 100,000. For larger centres, however, the relationship between population size and diversity is much weaker. Cities such as Kitchener and Toronto had very similar levels of industrial diversity, even though Toronto’s population is more than ten times larger than Kitchener’s. Beckstead, D. and M. Brown. 2003. From Labrador City to Toronto: The Industrial Diversity of Canadian Cities, 1992-2002. Insights on the Canadian economy. Catalogue No. 11-624-MIE2003003. Analytical Studies Branch. Ottawa: Statistics Canada. Between 1971 and 1996, growth in knowledge-based occupations occurred in all regions. Ontario and Quebec experienced the biggest percentage point increases. Provincial differences in the incidence of knowledge occupations were
primarily the result of their industrial and urban structure. After controlling
for differences in industrial and spatial structure, only very small differences
were apparent across Canada's provinces. Recently, considerable public attention has been paid to the possibility that head office employment has been declining as a result of the migration of head offices to other countries, what is sometimes referred to as hollowing-out. This paper asks whether there has been evidence of this process in Canada over the past four years (1999-2002). Overall, the paper finds that there are relatively few sectors or enterprises with patterns of decline in their head office function. Most importantly, in those sectors that were identified as being most vulnerable to hollowing-out—mining and oil and gas extraction and finance and insurance—employment increased. Geographically, the paper shows that head office employment is concentrated in a few large urban centres—Toronto, Montreal, Calgary and Vancouver. By 2002, Calgary supplanted Vancouver as the most important head office centre in Western Canada. Consistent with popular perception, Toronto continued to consolidate its position as Canada’s most important head office centre, while Montreal’s head offices experienced a modest decline in their employment. Baldwin, J.R, D. Beckstead and M.Brown. 2003. Hollowing-out, Trimming-down or Scaling-up: An Analysis of Head Offices in Canada, 1999-2002 Economic Analysis Research Paper Series 11F0027MIE2003019. Analytical Studies Branch. Ottawa: Statistics Canada. Trade and regional changeOver the past decade, the Canadian economy has become increasingly tied to world markets through trade. This is particularly true of Canada’s relationship with the U.S., which, with the implementation of the Canada-U.S. Free Trade Agreement, has become an even more important source of demand for Canadian products. This research theme concerns (1) the potential for further integration between the Canadian and U.S. regions through trade and (2) the impact of increasing trade on the structures of regional economies across Canada. Estimates of the border’s influence on trade suggest the Canadian and U.S. markets are not fully integrated. A potential for increased trade between these two economies still remains. In recent years, better methods have been developed to model Canada-U.S. trade. Research related to this theme uses these methods, combined with new sources of data, to measure the potential for further integration between the Canadian and U.S. economies. Where a firm is located, relative to major concentrations of population on both sides of the border, has a strong influence on its access to these markets. As formal barriers to trade fall, distance is increasingly the major factor determining market access. More and more, proximity to major concentrations of demand in the North American context has an effect on how regional economies evolve over time. With increased market access, some regions may specialize in industries where they have a comparative advantage in the North American market. For other regions, trade may lead to rapid growth as new industries emerge, while others may experience decline, as they are not as well situated to serve continental markets. Falling barriers to trade, therefore, have the potential to have a strong influence not only on flows of goods, but also on the structure of regional economies. To date, research related to this theme has looked into the following aspects of interregional and international trade and its impacts on regional economies:
Trade and regional change publicationsThe border remains a significant barrier to trade. Cross-border trade (province-state) was half the level of interstate trade in 1993, after controlling for the distance between and the size of state and provincial economies. In part, the border effect appears to be related to policy-induced barriers to trade (e.g., tariffs and quotas). This result suggests that there is still potential for further North American integration through trade. The border effect is not entirely a reflection of 'natural' barriers to trade between countries (e.g., differences in tastes) that are likely to persist in the long-term. Interprovincial trade is six times stronger than interstate trade, after controlling for the sizes of state and provincial economies and the distances between them. Canadians are much more integrated across distances than are Americans. Brown, W.M. 2003. Overcoming Distance, Overcoming Borders: Comparing North American Regional Trade. Economic Analysis Research Paper Series 11F0027MIE2003008. Analytical Studies Branch. Ottawa: Statistics Canada. Across all urban and rural areas, the proportion of manufacturing output exported abroad has increased over the past 25 years. Increases in export intensity were particularly strong for the cores of large metropolitan centres and their suburban fringes. Increases in export intensity across regions were associated with a rise in economic specialisation relative to the average region. Yet the impact of trade on regional economies was not so strong as to negate the general trend towards more industrially diverse regional economies in Canada. Baldwin, J.R. and W.M. Brown. 2003. Regional Manufacturing Employment Volatility in Canada: The Effects of Specialization and Trade. Economic Analysis Research Paper Series 11F0027MIE2003005. Analytical Studies Branch. Ottawa: Statistics Canada. Micro-dynamics of regional growth and changeThe evolution of economies at the national scale is driven, at least in part, by the decisions of individual economic agents, and in particular firms. Understanding the behaviour of these agents, therefore, gives us a much clearer understanding of how broad trends in the economy develop and change over time. Over the past ten years, new data sources that follow firms over their lifecycle have provided considerable insights into the underlying micro-dynamics of Canada’s national economy. They promise to do the same for our understanding of the operation of the Canadian economy at the sub-national scale. To date, we know very little regarding how the behaviour of firms contributes to, for example, differences in productivity growth and technical change across regions. Research under this theme typically uses geographically detailed micro-data sets to help us better understand how cities, towns and regions change over time. To date, research under this theme has focused on the following aspects of regional productivity differences:
Based on aggregate data, this research will be used to inform future analyses undertaken at the micro-level (see research questions). Micro-dynamics of regional growth and change publicationsIn 1996/97, Alberta has the highest labour productivity in Canada, producing roughly 18% more value-added per job than Ontario, which comes second. All other provinces trail Ontario, with Manitoba at 22% and the Atlantic region at 26%. The Natural Resource sector plays a key role in determining overall interprovincial productivity differences. Outside of this sector, however, differences in industrial mix only have a limited affect on provincial productivity disparities. After provincial differences in industry mix and differences in the productivity of different industries (primarily the resource sector) are taken into account, British Columbia, Saskatchewan, Ontario and Quebec are found to be about equally productive. But Manitoba and the Atlantic Region lag behind the others. Baldwin, J.R., J.-P. Maynard, D. Sabourin and D. Zietsma. 2001. Differences in Interprovincial Productivity Levels. Analytical Studies Research Paper Series 11F0019MIE2001180. Analytical Studies Branch. Ottawa: Statistics Canada. |
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