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Ahead of the Curve
Social and Economic Impacts of Changing Demographics
An overview of a project to assess social, economic and labour market impacts of demographic change in Nova Scotia and to identify appropriate policy directions
Introductory
• Growing awareness that demographic change will have a major impact on social, economic and labour market conditions in Nova Scotia in the very near future– Births have fallen dramatically since 1990, while deaths
have increased steadily so that we are now at the point, where there is no population growth due to natural increase
– Immigration is low and currently provides only a limited source of population growth
– Inter-provincial migration generally results in a net outflow to other jurisdictions
Introductory
• This awareness is reflected in a variety of policy initiatives being undertaken across government such as:– Immigration Strategy
– Strategy for Positive Ageing (to be released Nov 15)
• It has also shaped broad policy initiatives such as:– Skills Nova Scotia Framework
– Opportunities for Prosperity (Economic Growth Strategy)
– Community Development Policy Initiative
Introductory
• It is clear that the period of demographic change we are now entering will touch on almost all aspects of life in Nova Scotia
• There is a need to ensure that its implications are well understood across government and to identify the appropriate policy directions to ensure that we can respond effectively to the challenges and opportunities that lie ahead
Introductory
• The presentation today will:
– Provide a brief overview of recent demographic trends across Canada
– Assess likely patterns of demographic change in Nova Scotia
– Identify some of the key issues that we hope to address in the Demographics Research Project that we are embarking on
– Provide an overview of the work that will be undertaken
The Situation - Across Canada
Population Growth by Province
-10%
-5%
0%
5%
10%
15%
20%
CA NL PE NS NB QC ON MB SK AB BC
1990 to 1995 1995 to 2000 2000 to 2005
Source: Statistics Canada, Catalog Number 91-002-XPB, "Quarterly Demographic Statistics"
The Situation – Across Canada
The Situation – Across Canada
Natural Increase as a Percent of Population
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
CA NL PE NS NB QC ON MB SK AB BC
1992-1993 1996-1997 2000-2001 2004-2005
Source: Statistics Canada, Catalog Number 91-002-XPB, "Quarterly Demographic Statistics"
The Situation – Across Canada
Net Immigration as a Percent of Population
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
CA NL PE NS NB QC ON MB SK AB BC
1992-1993 1996-1997 2000-2001 2004-2005
Source: Statistics Canada, Catalog Number 91-002-XPB, "Quarterly Demographic Statistics"
The Situation – Across Canada
Net Interprovincial Migration as a Percent of Population
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
CA NL PE NS NB QC ON MB SK AB BC
1992-1993 1996-1997 2000-2001 2004-2005
Source: Statistics Canada, Catalog Number 91-002-XPB, "Quarterly Demographic Statistics"
The Situation – Across Canada
Components of Population Change, 2005
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
CA NL PE NS NB QC ON MB SK AB BC
Natural Immigration Migration NPR Residual
The Situation - Nova Scotia
The Situation - Nova Scotia
Population and Population of Working AgeNova Scotia (1979 to 2029)
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1979 1984 1989 1994 1999 2004 2009 2014 2019 2024 2029
Population Population of Working Age
The Situation - Nova Scotia
Main Components of Population Change - Nova Scotia
-6,000
-4,000
-2,000
-
2,000
4,000
6,000
8,000
1979-1984 1984-1989 1989-1994 1994-1999 2000-2004 2004-2009 2009-2014 2014-2019 2019-2024 2024-2029
Net Immigration Natural Increase Net Inter-provincial Migration
Population by Age, Nova ScotiaHistorical and Projected
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
0 - 4
5 - 9
10 - 14
15 - 19
20 - 24
25 -29
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 - 64
65- 69
70 - 74
75 - 79
80 - 84
85 - 89
90 +
July 1, 1984
July 1, 2004
July 1, 2024
The Situation - Nova Scotia
The Situation - Nova Scotia
Population TrendsHalifax and Nova Scotia Except for Halifax
200000
300000
400000
500000
600000
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Halifax Nova Scotia except Halifax
Population - Percent Distribution by Age
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
0 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65 - 69 70 - 74 75 - 79 80 - 84 85 - 89 90+
Nova Scotia except Halifax Halifax Nova Scotia
The Situation - Nova Scotia
The Issues
Issues: Economic Growth and Development
• Economic growth (measured by GDPr) results from:
• Population growth• Increasing labour force participation• Reducing unemployment• Increasing productivity
GDPr= P * L/P * (1-U/L) * (GDPr/E)
Issues: Economic Growth and Development
• Population growth (P)
• In Nova Scotia efforts to respond to demographic challenges have focused on population strategies – immigration and repatriation
• There are also significant concerns about retaining our youth population
• These are essential elements of an effective strategy to address the challenges of demographic change
• Ensuring that attractive job opportunities are available is essential to their success
Issues: Economic Growth and Development
• Labour Force Participation (L/P)
• An ageing population and ageing workforce suggest a decline in the labour force participation rate over time
• Growing proportion of the population is beyond age at which individuals normally retire
• Within the population of working age participation rates decline with age
• Need to consider efforts to increase participation of under-represented groups (Aboriginal, Black, Disabled)
• Efforts to increase participation of older population can also have significant impact
Participation RatesCanada and Nova Scotia
50
52
54
56
58
60
62
64
66
68
70
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004P
Nova Scotia Canada
Participation Rate, Both SexesCanada and Nova Scotia, 2003
0
10
20
30
40
50
60
70
80
90
100
15-19years
20-24years
25-29years
30-34years
35-39years
40-44years
45-49years
50-54years
55-59years
60-64years
65-69years
70 yearsand over
Canada Nova Scotia
Issues: Economic Growth and Development
• Unemployment Rate (U/L)
• Issues here include:
• Ensuring that economy can generate employment opportunities
• Measures to ensure that the labour market functions effectively to match up workers and jobs (reducing frictional unemployment)
• Ensuring that workers have the skills that are in demand (hence the importance of lifelong learning)
Issues: Economic Growth and Development
• Productivity (GDPr/L)
• Efforts to support economic development, innovation and productivity growth of greater importance
• Province’s economic development strategy (Opportunities for Prosperity) and the Premier’s Advisory Council on Innovation
• Ensuring that Nova Scotians have the necessary skills and entrepreneurial capabilities is an essential complement to these efforts
• Province’s Learning for Life strategy and the Skills Nova Scotia Framework
Issues: Labour Market Development
• Labour market issues
– Skill shortages
– Labour market adjustment
– Rising levels of retirements
Issues: Labour Market Development
• Skill shortages
• Assuming an ongoing capacity to generate employment opportunities, a slowdown, and ultimately decline, in labour force growth will push the labour market towards a situation of shortages
• The question here is how the labour market will adjust:• Wage adjustments
• In-migration and immigration
• Participation rates
• Productivity growth
• Need to understand how this will play out
Issues: Labour Market Development
• Labour market adjustment mechanisms
• Turnover in the labour market is essential mechanism by which economies adapt to changing conditions
• Older workers have relatively low turnover rates
• Is this likely to become an issue?
Issues: Labour Market Development
• Rising levels of retirements
• Employers will need to adapt to increasing retirement rates and ensure that they can maintain the skills of their workforces
• Impact will vary across industries and occupations
• Education and training system may need to adapt
Projected RetirementsNova Scotia
0
2000
4000
6000
8000
10000
12000
14000
16000
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: Canadian Occupational Projection System, 2005 Reference Scenario
Issues: Changing Industrial Structure
• Economy will need to adapt to significant shifts in demand
• Shifts in consumption demand consequent on an ageing population
• Changing demand for education and training• Declining number of youth• Increase need for lifelong learning opportunities to support
labour force development• Increased demand for health care• Will increasing share of resources devoted to health care
and possibly other non-tradeables, will we be able to maintain or competitiveness in external markets?
Issues: Other
• Additional issues that need to be better understood
• Impact on government fiscal balances and the capacity of government to respond to needs?
• The social and economic vitality of our rural communities
• Social change
The Project
The Project
• Being undertaken within the context of the Skills Nova Scotia Framework under the direction of the Labour Force Planning Committee (LFPC) with the approval and support of the Deputy Ministers’ Committee on Workforce Skills
The Project
• Steering committee chaired by the Department of Education• Includes representation from across the Provincial
government:– Education– Economic Development– Finance– Health– Senior Citizen’s Secretariat– Public Service Commission– Advisory Council on the Status of Women– Community Services
• Service Canada also represented
The Project
• Canmac Economics Ltd contracted to complete the project
• Canmac has extensive experience in economic analysis and modeling
• Strong multi-disciplinary team, including solid policy analysis capabilities (includes two former Deputy Ministers)
The Project
• Project is intended to:– Provide a sound understanding of the social,
economic and labour market implications of demographic change in Nova Scotia (“What does it mean for Nova Scotia?”)
– Identify critical challenges and opportunities– Assess appropriate policy options and
directions
The Project
There are three phases to the project:
1. Scenario development and impact analysis• Uses the Canmac model (includes
macroeconomic, demographic, fiscal, input-output, and labour supply/demand components)
• Incorporates alternative assumptions about the external environment
The Project
2. Identification of critical challenges and opportunities
• Based on simulations, key informant interviews and a literature review
• Also includes assessment of size and nature of required policy response
The Project
3. Identification of appropriate policy directions
• Uses a Delphi approach to judge the effectiveness of policy options
• Uses an iterative survey process with key informants to achieve consensus
The Project
Expected Completion Date: 31 March 2006
Thank You
Discussion