Economic Concerns Demographics In British Columbia Canada Economics Essay

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The 2010 Winter Olympics are coming to Vancouver, Canada. Vancouver is located in British Columbia. With the eyes of the world on British Columbia, the provinces problems will become obvious. The province is currently struggling to appease its inhabitants because of tax increases, treaty problems, and age demographic situations. These problems are becoming more serious as time progresses, yet the government is not learning from the past. British Columbia's problems are interconnected and there is no single solution.

The purposed closure of the Eurocan pulp mill come January, has the city of Kitimat in British Columbia frantically worrying. The city has based most of its economy on the functioning of one large company. "This closure means that 535 people will be out of work" (Hamilton, 2009). The owner of the pulp mill, West Fraser Timber, also paid $3 million a year in taxes to the city (Hamilton, 2009). This loss of tax money will poorly affect the city, as now people will not be spending money because they do not have jobs and might have to move out of BC in order to find an income. This has been a common trend for a few years now. "In 2007, around 10,000 jobs were lost due to the sawmill closure in Vancouver" (Hamilton, 2008). British Columbia needs to realize that they cannot base their economy on the performance of large production companies because when a company makes cutbacks or is closed down it drastically affects the employment in the city. When a city has a small employment rate it affects the economy as the population will be less reluctant to spend money. If the population is not spending money then the economy will not be stimulated and the city will end up losing money. These cities will also be losing a lot of money with regards to tax payments made by the production companies, if the city is not prosperous than the loss of tax compensation will have an even larger impact on the city. If a city is struggling then BC's government must subsidise them in some way, which ultimately affects the country as a whole. The closure in Kitimat is purposing to build a natural gas export terminal, which would provide construction jobs for about three years to the 535 people who will lose their jobs in the upcoming closure (Hamilton, 2009). This is not a real fix to the cities problem. This only temporarily delays the real problem rather than fixing it. This solution also does not consider the many other jobs that it affects indirectly. Hamilton discussed in the article "that for every forestry worker there are three or four spinoff jobs that are also affected". British Columbia cannot continue to base their cities economy on large production companies, as it will only end in devastation to the province.

The downtown eastside has a similar situation to Kitimat as they are also having trouble with their economy. This downtown area is already known as the poorest of poor neighbourhoods in British Columbia. There have been recent concerns about the welfare of the downtown especially with the Winter Olympics coming to Vancouver. "The downtown eastside looks to be an area with a huge turnover in its population, since 59 per cent of the population moved in the previous five years. That is considerably higher than the 46 per cent of overall Vancouver residents who moved, and also higher than the proportion of movers in British Columbia, which is 45 per cent" (Brethour, 2009). The reason for such a high rate of people moving is that the town's demographics are not built for success. "In the town single people over 15 who live alone earn only about $14,000 a year on average, but more than half comes from government transfer payments. Exclude those payments, and the average drops to just $6,000. For Canada as a whole, that same group earns more than $21,000" (Brethour, 2009). If a town has little to no income than you cannot expect the population to spend money and participate in the economy. The numbers really start to get serious when you consider that 38 per cent of residents don't even have a high school diploma, leaving them stranded from the modern economy (Brethour, 2009). While "60% of people in the 'DTES' are not even part of the labour force" (Brethour, 2009). In general, if you add together the percentage of the population that works, and the proportion looking for work, then you will have something called the participation rate. In the downtown eastside, "that rate for those 15 years and older is just 38 per cent, not much more than half the rate in Vancouver (67 per cent), B.C. (66 per cent) and Canada (67 per cent.)" (Brethour, 2009). With only a participation rate of 38 per cent it is obvious why the downtown eastside has not been successful and also why so many people have moved out of the downtown in the past five years. The city is filled with homeless and drug addicts and this is going to have a major awakening to the world when the Olympics come to town. British Columbia's only solution is to pump money into these struggling towns but without a functioning economy that money is wasted on drug and alcohol addictions. BC does not seem to learn that there is no simple solution and that money will not make their problems go away. These problems get worse as time progresses and I think it is time that the world is exposed to these issues as maybe it will force BC to work towards a better solution.

"One-seventh of the population in the downtown eastside is aboriginal" (Brethour, 2009). This rate is seven times higher than the rate of aboriginals for Vancouver as a whole (Brethour, 2009). "For Vancouver, status Indians account for just 1 per cent of the population; for B.C., 3 per cent; and for Canada, 2 per cent. However, in the downtown eastside, status Indians are 9 per cent of the population" (Brethour, 2009).The government and the aboriginal people are two conflicting forces. The aboriginal people are being mistreated by the government, which would begin to explain why there are so many aboriginals in the downtown eastside. The government is trying to compensate aboriginals with the use of treaty agreements and acts. The Maa-nulth treaty was recently instated where, "the five aboriginal groups will receive $73 million and 24,550 hectares of land over a 10-year period" (Burkholder, 2009). Issues have also arose where the government does not cooperate with the aboriginals as they delay acts like the recent Reconciliation Act of 2009 (Leamy & Lamb 2009). The aboriginals have made threats where they claim they will protest at the 2010 Olympics if they are not satisfied (Leamy & Lamb 2009). The government is creating this delay because they are currently experiencing demographic problems. It is their job as the government to make sure these issues do not occur.

"There is a common misconception that the global recession is the only factor behind the provincial government's recent budget cuts and tax hikes" (Geoghegan, 2009), when really BC's demographics are greatly affecting the economy. "After the Second World War, there was a huge post war baby boom" (Geoghegan, 2009). Canada experienced one of the largest post war baby booms, but "what also came of age in the 1960s was the women's rights movement, the sexual revolution, and the birth control pill" (Geoghegan, 2009). Accordingly, there was a decline in birth rates, as Canadian women are having fewer children at a later age. In the past, the average woman was married and had a few children by the time she was in her mid twenties. Today's average 20 year old woman is wondering how she is going to pay off her very large post secondary student loan and rent payments (Geoghegan, 2009). "Unlike other wealthy nations, Canada's birth rate has continued to decline" (Geoghegan, 2009). This is because the government has allowed housing costs to reach unaffordable prices for families in Canada that many middle class couples simply feel they cannot afford to start a family. The net result is that Canada has more seniors and fewer children within the population. This is where the problem lies. Ten years ago, a senior BC health official mentioned "the average 18 year old costs the health care system $800 per year, while the average 80 year old cost the BC health care system $21,000 per year. So the more seniors the more health care costs sky rocket" (Geoghegan, 2009). In addition, there is a shortage of young workers resulting in a lower amount of income taxes collected by the Canadian government. This decrease of income taxes received by the government is not enough to cover the rising health care costs. As a solution to this problem, "the provincial government will be imposing a 12% Harmonised Sales Tax and will be raising the Medical Service Plan premiums paid every month" (Geoghegan, 2009). These taxes imposed by the government will affect the poor and middle class citizens much more than the wealthy. These taxes will also impede middle class couples trying to afford a new home and raise a family, thereby continuing British Columbia's demographic problem. With the raise in taxes and the cuts to the health care system, you can start to see the struggle of the BC government and why they are having such troubles solving aboriginal problems. Furthermore, with the closures of large production companies and the unemployment rate increasing, BC's economy does not look promising. Also as the population is growing older, there are fewer people contributing to the economy and simultaneously it is costing the government more money in health care costs. Without an income, families cannot produce children and the economy is left to suffer. Until BC resolves the unreasonable costs of housing and makes it affordable for the younger population, we will cease see young families and the population can continue to expect further tax increases and service cuts as the province tumbles into a demographic disaster.

A suggested solution to BC's problem is immigration. This is a farfetched option, as "just to maintain the current population we need to allow 500,000 people per year to move to Canada" (Geoghegan, 2009). Additionally, they would have to ensure that these were 500,000 young people. Canada currently allows about, "260,000 immigrants into the country per year" (What we believe, 2007) and logically Canada will not increase their immigration level by almost double anytime soon. Another solution is the migration of people from inner provinces to the outer provinces. "In 2009 Ontario and Quebec shed only 7,500 residents to other provinces" (White, 2009). This number does not come close to the 500,000 young workers needed throughout the country and does very little concerning the impact it would have on BC. Currently there are only "two groups in Canada that are having children above the replacement rate, those whose income qualifies them for subsidized housing and the wealthy couples" who have inherited money from their relatives (Geoghegan, 2009).

In conclusion, BC has many different problems but they are all interconnected with each other. BC has a geographically small core with a massive periphery and the relationship between these regions will evidently affect BC as a whole. A province's economy should not rely on large resource corporations in order to prosper, aboriginals should not be mistreated, and the government needs to control the population of the province in order to avoid demographic issues. There is no sole solution to BC's problems, as it will require a lot of time and patience to fix the damaged that has been done.