Statistics Canada's Agiculture and Rural Working Paper Series recently (February 2007) released a report on "Factors Driving Canada's Rural Economy," which has implications for rural economic development.  This report identifies three fundamental drivers of rural development as technology, prices, and demography and explains their effects.

Rural Canada's economy has historically been driven by export commodities.  Given the ongoing increase in the value of human time, there is constant pressure to substitute machines for human labour in the commodity sectors.  Consequently, communities dependent upon commodity sectors have progressively fewer workers employed in these sectors, while at the same time exporting greater levels of the commodity from the community.  Communities are thus challenged to find a new good or service to export in order to maintain their employment base.  Traditional rural economies will continue to experience declining employment in the primary sector - regardless of the price of commodities due to the increased value of human time.  This will force rural communities to find new goods or services to sell.  At the same time, the decline in the price of transporting goods has increased the spread of the production of components of manufactured goods.  This decline is one factor in explaining the spread of manufacturing jobs to rural areas and increasing rural competitiveness in manufacturing.  The falling price of transferring information faster is a double-edged sword; while rural areas can receive information faster and send information faster, so can urban areas.  In terms of demography, Aboriginal peoples are a major driver.  In addition, rural areas are also successful at attracting young adults and early retirees with some areas being successful in attracting immigrants.

Implications for Economic Development

The drivers identified above are all opportunities for traditional rural economies to open up to new industries and new markets.  Rural communities can now take advantage of secondary and tertiary industries that were once exclusive to urban areas.  Rural areas are also attracting new sources of population, some of which will have the education and experience to be employed in these new industries.

Download the full reportDownload the Full Report Here