[Northern Light]

Yeah. That's why we need the additional tax base! And luckily, Canada is big enough and empty enough that we could keep this going for a lot of generations, at which point computers and robots will do all the work anyways, so we'll all be retired 100% of our lives. We just need to build enough houses and apartments.

The additional net tax base has low accretion value.

If you use Real GDP (inflation adjusted), per capita you get starting point figure of

You get about 23% growth over 20 years (2000-2020), that's only just a hair over 1% each year.

Productivity growth accounts for almost all of that.

Ranging from a modest negative to just over 3% in any given year.

You're getting very few net dollars per person out of the growth.

****

There are arguments for population growth from a self-less perspective (helping people in areas of the world with severe crowding/lack of resources); and there are arguments that are narrowly beneficial to Canada (specific types of labour to specific places, and military/Geo-political heft).

I'm not a fan of the latter.

In respect of the former, if that's what we're doing I'm open to that conversation, but I don't think we're serving either newcomers or the existing population well by plonking down the majority of that growth in already built-out areas of high population, where this causes inordinate infrastructure demands and imposes on quality of life for all; including through raising the cost of housing.

Its a great line that growth pays for itself; but the evidence is scant for it; when you adjust for the real costs of growth.

 

[Northern Light]

We should be careful not to equate earning a paycheque with contributing to society. Retired people—particularly women—often contribute a substantial amount of unpaid labour, whether through formal volunteer work, caregiving (e.g., grandchildren, infirm spouses and, increasingly, older parents) or otherwise. There are many worthwhile pursuits that, despite benefiting society and providing a sense of personal fulfillment, are poorly paid or not paid at all: I would propose additional programming to facilitate seniors contributing that way, particularly as autonomation continues to eliminate jobs. Additionally, in many cases, every year an older person stays in a job is a year a younger person is left unemployed, underemployed or without promotion. As we saw through the pandemic: When the eligible retire on time or ahead of schedule, the value of young labour and opportunities for growth shoot up substantially.

I am in complete agreement with the increased paid vacation piece.

I'm not throwing all retirees under the proverbial bus.

I'm relating both the functional math and my anecdotal experience.

My parents health declined quickly in retirement and I lost both in their early to mid 70s.

For them, without work, there wasn't enough stimulus, and the less exercise they got, the less mental challenge, the worse things became.

Neither were impoverished, by any means; but neither did they have this lets go to Florida in the winter or golf all the time or w/e lifestyle some think retirement looks like.

My parents were both single in their retirement, so work was their primary social contact as well.

*****

I agree we need jobs for young people, but I think the art form there is the increase paid vacation, followed by enhancing parental leave so more parents can afford to take it (easier to access and higher replacement income); then, if
we have surplus labour to our needs, we can consider a shorter work week.

 

[allengeorge]

Sincere question; why?

I approach this from the geo-political and economic perspective. Canada is by far the junior partner in the North American economy. While we may have benefited during the late 20th century from American largesse (basically, the US took Canada under its military/economic wing, just as the UK did the century before), that...benign benevolence (?)...is waning thin. The US is increasingly economically "America First", and that is a serious long-term problem for Canada. The US is the destination for over 70% of Canadian exports, and those that aren't at the very bottom of the value chain are increasingly challenged by American economic policy. We need to build a bigger, more productive internal economy - one where you can start a business and scale up internally before having to expand globally. Our small population, and the fact that we're next to the most dynamic, most richly-funded market in the world make it tough to do that right now.

Do I think that population size only will get us there? No. But I do think heft makes it easier to hold our chart our own path economically.

 

[allengeorge]

BTW (off-topic), as I was poking around to find data on Canada's imports/exports I stumbled on this great visualization: https://oec.world/en/profile/country/can

 

[allengeorge]

Interestingly (and bringing it back to Urban Toronto), Canada's over-reliance on selling our natural resources and rent-seeking is another reason I'm so upset by the runup in house prices and the increasing dependence of our GDP on real-estate: it saps investment from other, more productive industries. If you can sit on a piece of land and watch it increase in value 30% a year, why go out and build a business, or invest in someone who wants to build a business?

 

[Northern Light]

I approach this from the geo-political and economic perspective. Canada is by far the junior partner in the North American economy. While we may have benefited during the late 20th century from American largesse (basically, the US took Canada under its military/economic wing, just as the UK did the century before), that...benign benevolence (?)...is waning thin. The US is increasingly economically "America First", and that is a serious long-term problem for Canada. The US is the destination for over 70% of Canadian exports, and those that aren't at the very bottom of the value chain are increasingly challenged by American economic policy. We need to build a bigger, more productive internal economy - one where you can start a business and scale up internally before having to expand globally. Our small population, and the fact that we're next to the most dynamic, most richly-funded market in the world make it tough to do that right now.

Do I think that population size only will get us there? No. But I do think heft makes it easier to hold our chart our own path economically.

While critical mass matters.....in those terms; I can't agree overall with an emphasis on population growth, for those reasons, and here's why.

Lets look at GDP per capita across the OECD and see which nations are ahead of us, ie. have a higher GDP per capita number

Numbers will vary, this one is from Wikipedia.

I'm not too worried about +/- 3 positions....

But there are 14 countries ahead of us on that list...........

Of those.....only 2 have a larger population.

Several, have a much smaller population.

I can already hear the argument, 'but we're next to the U.S.'

Right, so assuming the U.S doesn't grow at all in population, and we continued to grow at 1% per year; we would reach the U.S. population size in a bit over 220 years.

Assuming the U.S. continued to grow as projected; about 250 years; that's just to draw even.

That would also lay waste to our arable lands, and cost sums into 100 trillion plus in todays dollars to make work.

All to achieve what? I can't say I like where the U.S. is at in aggregate way. Without being anti-American in the least, and while absolutely admitting there are ideas/success stories we can borrow from them
the cost/reward on building to a comparable population level doesn't strike me as being a net winner.

Moreover, not one achievable in 3 average lifetimes.

BTW (off-topic), as I was poking around to find data on Canada's imports/exports I stumbled on this great visualization: https://oec.world/en/profile/country/can

Good graphic

Interestingly (and bringing it back to Urban Toronto), Canada's over-reliance on selling our natural resources and rent-seeking is another reason I'm so upset by the runup in house prices and the increasing dependence of our GDP on real-estate: it saps investment from other, more productive industries. If you can sit on a piece of land and watch it increase in value 30% a year, why go out and build a business, or invest in someone who wants to build a business?

I agree we over rely on resources; that said, we should work with our natural advantages.

But we should also do more in the value-added space, particularly with those resources.

Why should we be the world's largest supplier of mustard seed, but not the world's largest supplier of mustard?

Canada is the #2 exporter of Wood Product globally, but #8 in furniture (and a distant 8 at that)...........

There is certainly work to be done there; but I don't see that as directly correlated to population.

The number 2 exporter of furniture globally? Poland which is just a hair smaller than Canada in population.

 

[allengeorge]

Lets look at GDP per capita across the OECD and see which nations are ahead of us, ie. have a higher GDP per capita number

A quick scan of those countries shows that with the exception of Australia and Norway, the rest export dramatically higher up the value chain than we do - both in terms of goods and services.

If Canada wants to climb up that value chain, then yes, location and context matters - one can't just pretend being next to the US is a non-issue. In North America, if a business has the opportunity to set up a highly complex factory in the US vs. Canada which would they choose? The US - and increasingly so, because:

1. you have a much larger addressable market
2. an administration that implicitly and explicitly penalizes imports
3. governmental policy that favors designing and building in America - and spends heavily to make it happen

And once a factory gets built in the US, others tend to join; you get a critical mass of spin-off industries, and create a cluster. You can see this happening today with both EV technology and chips. Canada hasn't landed a battery factory (I wager won't) and definitely won't get a chip foundry. We just don't have the heft to make it worthwhile for anyone to relocate here and build up a cluster. It is different in Europe because you have a much larger set of countries without a single outsize player. So, in the North American context, if it's hard to convince external parties to relocate here and build up a cluster, then we have to make it worthwhile for Canadians to build and scale a cluster locally. Size of internal markets (driven by population) is a huge determinor in that.

That would also lay waste to our arable lands, and cost sums into 100 trillion plus in todays dollars to make work.

I agree we over rely on resources; that said, we should work with our natural advantages.

I find it odd that you say that population growth would lay waste to our arable lands - and in the same post suggest that our natural strengths of resource extraction (which are incredibly damaging to our environment) should be doubled-down on. Sure - population growth Canadian-style - aka. sprawl SFH all over the countryside - will lay waste to our lands, but...I'm definitely not advocating that, so that's a bit of a strawman.

 

[Northern Light]

A quick scan of those countries shows that with the exception of Australia and Norway, the rest export dramatically higher up the value chain than we do - both in terms of goods and services.

If Canada wants to climb up that value chain, then yes, location and context matters - one can't just pretend being next to the US is a non-issue. In North America, if a business has the opportunity to set up a highly complex factory in the US vs. Canada which would they choose? The US - and increasingly so, because:

1. you have a much larger addressable market
2. an administration that implicitly and explicitly penalizes imports
3. governmental policy that favors designing and building in America - and spends heavily to make it happen

And once a factory gets built in the US, others tend to join; you get a critical mass of spin-off industries, and create a cluster. You can see this happening today with both EV technology and chips. Canada hasn't landed a battery factory (I wager won't) and definitely won't get a chip foundry. We just don't have the heft to make it worthwhile for anyone to relocate here and build up a cluster. It is different in Europe because you have a much larger set of countries without a single outsize player. So, in the North American context, if it's hard to convince external parties to relocate here and build up a cluster, then we have to make it worthwhile for Canadians to build and scale a cluster locally. Size of internal markets (driven by population) is a huge determinor in that.

Can we realistically equal the U.S. in internal market size in the next 2 centuries? Answer: No.
So perhaps we need an alternate strategy.

I find it odd that you say that population growth would lay waste to our arable lands - and in the same post suggest that our natural strengths of resource extraction (which are incredibly damaging to our environment) should be doubled-down on.

I did not suggest we double-down on anything; I was simply pointing out it would be folly to ignore the advantages with which we are gifted.
By all means we should diversify, move up the value chain etc.
But we neither can nor should ignore the reality in which we find ourselves.

Sure - population growth Canadian-style - aka. sprawl SFH all over the countryside - will lay waste to our lands, but...I'm definitely not advocating that, so that's a bit of a strawman.

Canada's urban areas among the most dense in the world, and vastly more dense than those of the United States.
Ergo, if we extend population growth to be comparable to the U.S. we should expect to consume land area not totally incomparable per person to what we have thus far.
This is particularly true if we move up the value chain, as competitive factories are very sprawling, sadly.

Even if we ambitiously said we could consume 50% of as much land per capita as the U.S. in residential and ancillary development, to grow to comparable market size, at least 330 million people,
we would need to consume ~5x more land than we have today.

Since we know that will inordinately be near southern Ontario and BC which together have the best farmland in the country.....

 

[allengeorge]

Interestingly, our proximity to the US and our over-reliance on them as an export destination has resulted in us playing to our natural strengths: resource extraction.

These are not industries in which one sees high productivity growth. In addition, much of our GDP comes from government/health-care (again, not highly productive industries).

 

[allengeorge]

Can we realistically equal the U.S. in internal market size in the next 2 centuries? Answer: No.

I don't think I've ever said we should equal the US. But, maybe less than 10x differential. 5x? That evens the playing field a bit.

I did not suggest we double-down on anything; I was simply pointing out it would be folly to ignore the advantages with which we are gifted.

By all means we should diversify, move up the value chain etc.

But we neither can nor should ignore the reality in which we find ourselves.

Sure - but I'm not hearing any suggestions on how to diversify or move up the value chain. In fact, our biggest trading partner actively wants to move us down the value chain. Our biggest non-commodity export are autos and auto-parts, and the US wants to keep as much of that manufacturing internal as possible - and is using its size to make that increasingly happen. Aircraft used to be a big thing, but we all know what happened to Bombardier.

Canada's urban areas among the most dense in the world, and vastly more dense than those of the United States.

I'm curious how you came up with the claim that they're "among the most dense in the world"? First off, we aren't even in the top 50 most dense cities. (Source: https://en.wikipedia.org/wiki/List_of_cities_proper_by_population_density). Heck - we're (https://www150.statcan.gc.ca/n1/daily-quotidien/170208/t001a-eng.htm) basically around or below middle of the pack for Europe (https://en.wikipedia.org/wiki/List_of_European_Union_cities_proper_by_population_density), which I think is a more like-to-like comparison.

The US, absolutely: if there's one nation that knows how to sprawl more than we do - it's the US.

 

[allengeorge]

I want to clarify that though I think that an increased population is necessary for our long-term economic vitality and independence, it’s far from sufficient.

We have very low productivity growth (I wonder if this is because of the share of GDP tied to high-touch services like healthcare), incredibly stupid barriers to internal goods and services trade, a fragmented regulatory system, government procurement that overlooks Canadian companies - especially in software, a risk-averse business and government culture, insanely high housing costs…

 

[Northern Light]

I'm curious how you came up with the claim that they're "among the most dense in the world"? First off, we aren't even in the top 50 most dense cities. (Source: https://en.wikipedia.org/wiki/List_of_cities_proper_by_population_density). Heck - we're (https://www150.statcan.gc.ca/n1/daily-quotidien/170208/t001a-eng.htm) basically around or below middle of the pack for Europe (https://en.wikipedia.org/wiki/List_of_European_Union_cities_proper_by_population_density), which I think is a more like-to-like comparison.

The US, absolutely: if there's one nation that knows how to sprawl more than we do - it's the US.

Re-do the list with Cities greater than 1,000,000, in developed countries. I think you will find we rank more favourably.

When you further adjust for the amount of parkland which relatively absent in many older cities in Europe and Asia our ranking would improve further still.

The list you cited has urban areas as small as ~11,000 people.......which is not a legitimate basis of comparison; nor are developing world nations full of slums with unserviced lands.

 

[Northern Light]

I want to clarify that though I think that an increased population is necessary for our long-term economic vitality and independence, it’s far from sufficient.

We have very low productivity growth (I wonder if this is because of the share of GDP tied to high-touch services like healthcare), incredibly stupid barriers to internal goods and services trade, a fragmented regulatory system, government procurement that overlooks Canadian companies - especially in software, a risk-averse business and government culture, insanely high housing costs…

I would argue high population growth is the single largest impediment to productivity.

It cheapens labour cost.
If you have labour scarcity, then wages rise, necessitating investments in productivity.

My own professional experience with very large Canadian businesses suggests this is true.
To automate every location in manner 'x' is several hundred million, and produce no tangible savings based on doing the same work, labour-intensively with minimum-wage staff.
So it either doesn't happen, or happens very slowly. But see that wage up-tick by 1/3.....and the automation investments kick into high gear.

***

To be clear, is a compelling case for regulatory harmonization of employment standards and capital markets.

I just don't think its the lead issue.

 

[allengeorge]

I would argue high population growth is the single largest impediment to productivity.

It cheapens labour cost.
If you have labour scarcity, then wages rise, necessitating investments in productivity.

We’re delving into anecdotes, but I disagree. I think the biggest impediment to productivity is risk-aversion and the oligopolies that exist in Canada.

My dominant impression of Canadian businesses is that they are unwilling to invest - not because of money, but because they won’t take a risk on anything unless it’s been proven elsewhere. And, because the most deep-pocketed buyers in Canada are in the most conservative industries (government, banks, telco, retailers), and oligopolies to boot, you have to either spend an inordinate amount of energy convincing the first of the bunch to buy you - or prove your solution elsewhere.

(I think what you’re witnessing is a second-order effect: because we’re risk-averse, the safest decision is to simply scale up the solutions we have already put in place - even if it’s more costly. If you think of grocery retailers in Canada across the last decade for example, they didn’t increase their technology and logistics expenditures because Canadian immigration dropped and labour became more expensive - they did it because Wal-Mart and Amazon changed the competitive landscape and started taking away market share they were comfortably used to.)

And, if you’ve to prove your solution in the US, it makes sense to relocate closer to your buyers - which has happened to many a software team.

 

[afransen]

Cities are the drivers of global economies. Cities become more productive as they become larger. A larger population would help to populate larger cities in Canada. I think we need to place a very strong emphasis on growing efficiently and ensuring our urban form is productive. The federal government worries a lot about productivity and creating innovation funds. I think they would be much better served ensuring that our cities were well planned and had appropriate infrastructure to support that growth as a matter of national interest (efficient housing stock, efficient transportation for people and goods, high degree of intraregional connectivity to foster productivity benefits of urban agglomerations).