Monday, August 22, 2011

Lest we forget, demographic change still often rules the economy


Chief Economist, CanaData
Lest we forget, demographics still rule much of what takes place in the economy.
The following are some trends that I personally find interesting with respect to population size, rate of change and make-up in Canada, the provinces and the major urban centres.
In the latest year, Canada’s population increase – from births and immigration less deaths and out-migration – was +1.06%.
The nation is adding about 90,000 people per quarter. That means the population will climb above 35 million in the first quarter of 2013, only a year and a half from now.
Ontario accounts for almost 40% of the nation’s total population. That’s by far the largest provincial share. It presents a huge “hive” of humanity near the geographic centre of the country.
Quebec (23.2% of total Canada) is the next largest province by population, but its share of the national total has fallen below the historically significant 25%.
Throughout Canada’s history to-date, Quebec’s important position in the country has often been guaranteed by its one-quarter share or more of the population.
Then there are some significant blocks.
For example, the Atlantic Region as a whole (6.8%) accounts for almost exactly the same proportion of the nation’s total population as Manitoba plus Saskatchewan (6.7%).
And if Ontario is 40% of the total, then one has to wonder what the pattern is in the other 60%.
Interestingly enough, there is an almost precise East-West split. The Atlantic Region plus Quebec provide 30% of the total as do the Prairies plus B.C.
The Territories with only 111,000 people barely figure in the percentage-of-total calculations.
Since Ontario is 40% of Canada and Toronto is 40% of Ontario, the Queen city is 16% of the national total. That’s a very significant piece of the pie.
The Toronto census metropolitan area (CMA) is adding more than 100,000 people per year. The next closest city is Vancouver (+54,000), advancing at about half that rate.
Adding 100,000 people per year is the equivalent of plunking a city nearly the size of Peterborough within Toronto’s CMA boundaries each year.
By the way, a Census Metropolitan Area (CMA) is defined by Statistics Canada as an urban area with a 50,000-person downtown core.
All of Canada’s 33 CMAs have total urban plus suburban populations in excess of 100,000.
It’s mentally difficult to come to terms with the notion of an additional 100,000 people per year. Consider what it means in terms of infrastructure needs to serve new homes, stores and offices.
At its present rate of population increase, Toronto will shoot past 6 million people in late 2012.
In Statistics Canada’s latest city population estimates (for July 1, 2010), Montreal added 41,000 people on an annual basis (i.e. compared with July 1, 2009) and Calgary, Ottawa-Gatineau and Edmonton all recorded nearly matching gains of 20,000 to 22,000.
The seventh-ranked city in terms of actual population increase was Winnipeg, at +11,000.
The 33 largest cities in Canada now account for more than two-thirds of the nation’s total population.
While that’s an interesting statistic on its own, it contains within it another perhaps more interesting comparison.
The three largest cities in Canada – Toronto, Montreal and Vancouver have populations that are 50% of the nation’s urban total, as calculated by the addition of the 33 CMAs.
Combine some of these ratios and you’ll quickly determine that Toronto, Montreal and Vancouver make up one-third of the nation’s total population. That carries a further implication. Montreal and Vancouver added together shelter only about half a million more people than Toronto. Toronto is a behemoth on the Canadian demographic scene.
Toronto’s population growth rate in the most recent year for which data is available (2010 versus 2009) was +1.90%, placing it fourth among all of Canada’s CMAs.
The three fastest growing cities on a percentage change basis were Saskatoon (+2.81%), Vancouver (+2.31%) and Regina (+2.26%).
Note the representation from Saskatchewan, where resource projects are attracting workers.
Only two Canadian cities had a decline in population between 2009 and 2010, Great Sudbury (-0.13%) and Windsor (-0.34%).
At the time, Sudbury was in the throes of a mining sector strike and Windsor was struggling with a downsizing in its auto sector. Both situations are in the process of turning around.
With respect to construction activity, population growth plays an obvious role in the demand for streets, highways, transit projects, schools and medical facilities.
With respect to the latter, the age make-up of the local population can be important.
The median age – i.e., that point at which half the population is older and half younger – of Canadians in mid-2010 was 39.7 years.
Cities with residents notably older were Saguenay and Trois-Rivieres (both with median ages of 45.0), Peterborough (44.7), Victoria (43.5), Kelowna (43.2) and St. Catharines-Niagara (42.8).
Cities harboring a younger population were mainly in the bustling West – Saskatoon (35.4), Calgary (35.8), Edmonton (36.0) and Regina (36.9).
However, high-tech hub Kitchener-Cambridge-Waterloo (36.9) also stood out, in the East, and Toronto (37.9) wasn’t too shabby on the youth front either.
For more articles by Alex Carrick on the Canadian and U.S. economies, please see his market insights. Mr. Carrick also has an economics blog. His lifestyle blog is at www.alexcarrick.com
To see Alex Carrick and other economists with expertise in the construction industry in person, register for the CanaData Construction Industry Forecasts , scheduled September 22 at the Liberty Grand in Toronto.