Changes in where Canadians live and work have been one of the most striking trends during the pandemic.
Former Ontario residents are leaving that province in droves, and populations in nearly all other jurisdictions in Canada have benefited. For B.C. – already a top destination for interprovincial migrants in the two years before COVID-19 – that meant interprovincial inflows of nearly 35,000 people in the year to September 2021 – the largest four-quarter increase since the early 1990s. While these gains will likely ease as we get COVID-19 under control, we think this could be the beginning of a major shift in Canadian interprovincial migration and that B.C. will retain its draw post-pandemic.
Historically, movement within the country has reflected relative economic conditions. When oil prices rise, job-seekers flock to net oil-producing provinces like Alberta and Saskatchewan; when they fall, more stable employment in net oil-consuming regions like Ontario, Quebec and B.C. tends to pull migrants away from natural resources-intensive economies. We observed this dynamic during and after the last commodity price super cycle that peaked in 2013. Similarly, B.C. witnessed significant outflows during and after its pronounced economic downturn in the early 1980s and benefited in the early 1990s when global manufacturing sector weakness drove Central Canada into a particularly deep recession.
B.C.’s comparative economic out-performance during COVID-19 has likely helped its draw. In 2020, B.C. real GDP fell by just 3.4 per cent – far better than the decline of more than five per cent in Ontario (net migration of more than 10,000 to B.C. from Q4-2020 to Q3-2021) – and B.C.’s seven per cent rate of job creation led the country. The plunge in oil prices and disproportionate impact on Alberta’s economy (net interprovincial migration of more than 16,000 to B.C. from Q4-2020 to Q3-2021) surely contributed as well.
Of course, other factors are at play this time. Widespread adoption of telework during the pandemic has enabled people to work almost anywhere, regardless of the physical location of their office. Given the sheer and sudden strength of net interprovincial inflows to smaller, less costly jurisdictions during COVID-19, many workers are clearly taking advantage of this opportunity.
Why might population inflows to B.C. not continue at such a strong rate? For one, Alberta’s economic momentum has picked up despite omicron-variant-related lockdowns. Drilling activity is trending higher, oil production is near record levels and crude values recently eclipsed the US$90-per-barrel mark for the first time since 2014.
The economic gains associated with these trends bode well for migration to Alberta in the coming months. We also think that Ontario will remain an attractive destination post-pandemic – particularly for young professionals within Canada – given its large economy, diverse and cosmopolitan cities, status as a regional financial services hub and high wages relative to the Canadian average.
Still, B.C. should remain a magnet. First of all, telework is here to stay. Statistics Canada estimates that nearly half of Canadian jobs can reasonably be done from home, 80 per cent of new teleworkers would like to work at least half of their post-pandemic hours from home and productivity has not been impaired by the shift to remote work.
Second, in Alberta, the longer-run outlook for major projects is less optimistic than before the last commodity price downturn.
Third, the overall growth of and increasing number of “unicorns” – local startups valued at over $1 billion – in B.C.’s technology industry helps attract skilled workers and can help narrow the province’s wage gap with the rest of Canada.
Finally, Ontario housing prices are fast approaching the average in B.C.; as of January 2022, Toronto benchmark home values exceeded those in Vancouver.
These shifts clearly have the potential to significantly benefit the B.C. economy, but the policy implications are myriad for B.C. Alongside expected increases in immigration to Canada, a new source of headcount gains reinforces the importance of the province’s efforts to boost the housing supply and manage affordability pressures.
We would make a similar argument about the need to stimulate business investment in the aftermath of the pandemic – without the right tools, technology and capacity, economic contributions from workers will be limited. On this front, reliable broadband internet service and infrastructure will be particularly important as widespread telework continues.
Changes in interprovincial migration not only highlight how work has changed during the pandemic, but also speak to the strengths of and opportunities for B.C.’s economy. Harnessing these opportunities requires a relentless focus on building more housing and stimulating investment and productivity. •
Marc Desormeaux is a senior economist at Scotiabank.
