A Sustainable, Inclusive and Digital Future for Rural Canada

Matthew Mendelsohn, Mike Moffatt and Jamie Van Ymeren

The pandemic has revealed many challenges and opportunities for communities across Canada, and these will require different kinds of responses in smaller communities than in large cities.

For too long, many economic and community development programs that focused on rural Canada were designed specifically to address perceived shortcomings within smaller communities in the context of ongoing urbanization and concentrated economic growth in large cites like Toronto, Montreal, Calgary and Vancouver.

Many government policies over the past half century have focused on rural communities as places of need requiring subsidies rather than places with rich historic, cultural, natural, and human assets that offer economic opportunity and contribute to community well-being. 

But the geography of opportunity is being reshaped. While the agglomeration economy still benefits mostly urban settings, there is no doubt an opportunity to advance new economic and community development approaches in smaller communities in light of pandemic — and soon-to-be post-pandemic — realities. Digital infrastructure, opportunities for distributed work, new connective infrastructure, the opportunities for digital delivery of services, and the cost of housing are all impacting business and family decisions.  

These factors and new opportunities need to be integrated into program decisions.

It is clear that strong macroeconomic fundamentals on their own are not enough to produce economic well-being and inclusive growth that benefits people. There is, finally, a large consensus that our policies must pursue economic, social, and environmental objectives together. 

The federal government has been at the forefront of this agenda in recent years, looking to embed inclusion, community wealth, sustainability and the distribution of benefits from economic growth into program decisions. It is now clear that progress on measures of community well-being is just as important as progress on more traditional economic indicators of success. And government must play an important role in achieving outcomes on well-being and quality of life because they won’t simply be achieved through traditional macroeconomic tools like lower taxes and deregulation.

There is also increasingly a recognition that to truly achieve inclusive economic growth, a place-base approach is needed, one that looks at place and community as the focus for integrated policies across different sectoral or issue areas. The new focus on place-based approaches is aligned with an aggressive microeconomic agenda, including industrial policies, designed to support local businesses in local communities.

How can we design our economic and community development programs to take a place-based approach in light of emerging realities? And how do we do so in a way that produces not just economic growth, but community well-being and community wealth in rural Canada as well?

We have some guidance. In 2020, the OECD launched a new framework on rural economic development. It highlights the re-thinking going on globally on the best ways to create inclusive, prosperous rural communities.

The new framework, Rural Well-Being — Geography of Opportunities, provides a roadmap on how governments can empower communities and support their economic and community development ambitions. It aligns well with the federal government’s interest in place-based policies, more activist approaches to business support programs, and supporting economic growth in ways that are explicitly focused on inclusion, sustainability and community well-being.

The new approach replaces earlier frameworks, which focused on trying to attract jobs by improving the competitiveness of rural regions. While building competitive and innovative regions is important, we know now that attracting business investment is not enough to produce inclusive, sustainable communities. Sometimes, even with new employment from a new investment, people who live in rural and smaller communities see no improvement in their quality of life. 

The new framework focuses on the unique, place-based challenges and opportunities of individual communities and encourages investments in local assets that improve life for people in smaller and rural communities. Investing in high quality public services, improving quality of life and attracting and retaining people are all complementary goals. 

The new approach assumes that economic development will only be successful if it is built on a strong community foundation and delivers multiple benefits for residents.

Coming out of the pandemic, there is a unique opportunity to re-think some of Canada’s approach to economic and community development programs. Individual communities are now beginning to see the nuanced and varied ways that COVID-19 has impacted their local regions. Canadian researchers with expertise on rural Canada are taking stock of what the pandemic has done to rural communities and what comes next. And the federal government is in the process of rolling out unprecedented economic recovery investments in response to the pandemic with the goal of building back better and helping individuals, communities and businesses, some of which are targeted specifically at rural recovery.

This is a unique opportunity to influence the shape and form of policies that will influence rural Canada for years to come. 

What would strong, place-based rural policies look like in practice? Canada 2020 is embarking on a one-year project of research and convening to address this question. The project will see what we can learn from global efforts to build more inclusive and sustainable economic well-being and community wealth in smaller and rural communities, take stock of what is already working in Canada, and better understand what Canadian research and data are telling us about the evolving geography of opportunities in Canada.

We know that successful approaches must include building capacity within local leadership and empowering local communities to decide how to implement programs. We know that integration into wider regional ecosystems is important for many communities. And we know that solutions will be best if they emerge from processes where governments, civil society, business and communities are all at the table. 

We also know that issues like digital infrastructure, connectivity, responding to climate change, access to capital, and accommodating shifting locational decisions will all be important. But what should this mean in practice?

Canada needs a renewed commitment to ensuring the well-being and livelihoods of the millions of people who live in rural areas across the country. We are now at a moment where we can make key policy and program decisions that make sustainable and inclusive economic growth and community well-being a reality for all communities across Canada.