Challenges Facing Small Towns in Ontario
Economic Challenges
Responding to the Challenge
Educational Attainment Levels and Employability
Changing Demographics
Challenges of Access
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Challenges Facing Small Towns in Ontario
Small towns in Ontario have always faced unique challenges in three main categories: their geographic circumstances (e.g. isolation, large distances between communities), their population dynamics (e.g. youth out-migration) and their local resources (e.g. reliance on a single industry such as agriculture, forestry or mining). These circumstances create problems – for example, inadequate public transportation – that do not affect larger centres, or at least not to the same degree. Further, the challenges that small towns do share with larger centres, such as poverty, youth at risk and access to heath care, are often more severe or intensified in less populated areas.
In the course of our research, we identified four key issues that small towns in Ontario face. These are:
- Economic restructuring and the need to diversify the local economy;
- Changing labour force dynamics and the challenges these present in areas where educational-attainment levels are lower and the employability skills of young workers are not well matched to the job market;
- The demographic realities of an aging population and youth out-migration; and
- Challenges related to access – particularly to capital, health care, public transportation and technology.
Economic Challenges
The economy in rural Ontario has been subjected to some fairly dramatic shifts in recent years. These have had a significant impact on employment and unemployment patterns.
In general, the overall unemployment rate in rural Ontario is slightly lower than in urban Ontario. However, there is a great disparity in employment rates among the various regions of the province. Employment is generally stronger in rural Southern Ontario than Northern Ontario, which experienced significant decreases both in rural and urban employment rates throughout the 1990s and into the early 2000s1.
These employment trends reflect transitions in the economies of rural areas across Ontario. Traditionally, employment has been tied to natural resources, particularly in Northern Ontario, where there are many one-industry, resource-based towns. These communities have been highly vulnerable to fluctuations that are inherent in the “boom-and-bust” cycles of the resource industries. These variations are most often related to:
- Resource depletion;
- Shifting world commodity prices;
- Corporate and government policy changes; and
- Fluctuations in the Canadian exchange rate2.
There are many recent examples of plant or mill closures that could be cited, particularly in the forestry and mining sectors in the North. Interestingly, mining-based communities in this region have generally been hit less hard by economic restructuring than forestry-based communities3.
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Responding to the Challenge
Many rural communities in Ontario, including those in the North, have responded to their economic challenges in positive, constructive ways. They have developed economic diversification strategies that maintain and increase employment. They have created opportunities that help attract and retain youth, young families, immigrants and highly skilled professionals in their communities.
The development of tourism to diversify the employment base is a trend in rural Ontario.
For the past several years, rural Ontario has had the fifth-largest growth rate in tourism employment of all the Canadian provinces, following the four Maritime provinces where tourism is a key economic driver; and
The growth rate for tourism employment in rural Ontario has been higher than employment growth as a whole4.
In our research, we found that tourism in small towns is closely linked with cultural attractions and activities such as community-based art galleries, theatre companies, dance groups, etc. According to Statistics Canada, the investments that rural communities make in culture increase the chances that their economic development strategies will be successful5.
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Educational Attainment Levels and Employability
In communities facing economic challenges, residents’ abilities to adapt and develop the necessary skills and aptitudes needed for success are directly linked to their ability to participate in education and training opportunities close to home.
Smaller communities consistently exhibit a lower level of university-educated labour than that of the province as a whole. The gap can be as much as 10 per cent below the provincial average. We found this to be most pronounced in the region around Kapuskasing, where educational attainment levels have historically been lower than both those of the province and Northern Ontario as a whole. Today, between 35 and 40 per cent of the population does not have a high-school diploma, compared to just over 25 per cent for the province overall. Less than eight per cent of the population has a university degree, compared with a provincial average of over 19 per cent.
Gaps in educational attainment often mean employers will have difficulty finding, attracting and retaining workers with the skills needed to succeed in newer, more knowledge-based occupations. These knowledge-based skills and jobs are the kind needed to compete effectively in today’s marketplace and those most likely to help diversify the local economy. In fact, underemployment, particularly of skilled and professional working-age adults, has replaced unemployment as the key issue facing small towns. Employers from Hawkesbury in the East to Kenora in the Northwest are experiencing difficulty recruiting and retaining workers with adequate literacy, second language and essential soft skills.
Ultimately, lower levels of literacy and skills have a negative impact on people’s ability to support themselves and their families. They can be barriers to a highly skilled, productive workforce and a strong, thriving community.
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Changing Demographics
Demographic trends are often cited as limiting the potential of small towns. In our research, a declining population, an aging population and the out-migration of youth emerged as major challenges facing small towns in Ontario today.
Population
As Ontario continues to become increasingly urbanized, its rural and small-town populations are declining:
- In 2006, 85.1 per cent of Ontarians lived in urban areas, up from 84.7 per cent in 2001;
- Rural areas in Ontario accounted for 14.9 per cent of Ontario’s population in 2006, down from 15.3 per cent in 2001;
- Rural areas recorded a population growth of 5.1 per cent between 2001 and 2006, compared to a 6.6 per cent increase in the population of Ontario overall; and
- Rural Southern Ontario maintained a roughly constant share of about 24 per cent of the province’s population over this same period.
Northern Ontario’s share of the rural population actually rose between 2001 and 2006 from 31.4 per cent to 32 per cent. Small towns still saw their share of the Northern population decline from 27.1 per cent to 25.9 per cent.
In the six small towns we studied, population growth rates from 2001 to 2006 varied widely:
| Kapuskasing |
7.9% |
| Haliburton |
7.0% |
| Hawkesbury |
5.3% |
| Kenora |
4.2% |
| Port Colborne |
0.8% |
| Goderich |
0.6% |
Aging
While the population of Ontario as a whole is aging, the population of small towns in Ontario is aging more rapidly.
Rural communities in Ontario have a higher proportion of children under the age of 15 and a lower proportion of youth between the ages of 15 and 24, largely due to youth out-migration. Urban communities, on the other hand, generally have a net increase of youth migration6.
There is an important exception to these demographic trends in small towns. Aboriginal communities in Ontario have experienced rapid growth, especially in the number of youth. Between 2001 and 2006, Ontario’s Aboriginal population grew by 28.8 per cent. Over 43 per cent of the population is aged 0-24 years, and just over 5 per cent is over the age of 65.
Youth out-migration
Youth out-migration is most often linked to three key drivers:
- A lack of employment opportunities in the local community;
- The lure of new and interesting cosmopolitan experiences (what demographer Dr. David Foot calls “noise and action”)7; and
- The need to move away to pursue post-secondary education.
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Challenges of Access
By virtue of their size and geographic isolation, all of the small towns we studied faced four significant challenges concerning access to services and amenities. These were related to:
- Capital;
- Health care;
- Public transportation; and
- Technology.
Capital
The need for capital infrastructure is a characteristic that strongly differentiates rural from urban communities in Ontario8. Respondents in our Small Towns: Big Impact study noted a particular need for capital funding to help their communities meet their infrastructure demands. This message was consistent with the findings of OTF’s 2006 consultation, Focused Conversations. It also supported information gleaned from our Community Granting program, where it has been consistently found that regions with more rural communities have a much larger proportion of capital grants as opposed to operating or project grants.
Health care
Small towns in Ontario are currently challenged to provide adequate access to health care, particularly family doctors and nurses. A 2004 study reported an estimated shortage of over 500 physicians in rural Ontario9. This is of particular concern as health risk factors such as obesity, smoking and heavy drinking are more prevalent in rural regions of Canada than in urban areas. In fact, compared to other rural provincial regions, Ontario’s rural regions had a higher annual death rate, a higher infant mortality rate and a lower life expectancy.
Infrastructure
Small towns also face significant shortfalls related to transportation infrastructure. In the six small towns we studied, we consistently found that even where high-quality programs and services exist, people often have trouble getting to them because transportation infrastructure is poor and the distance they are required to travel is large.
According to the 2005 report, The Capacity Challenges of Nonprofit & Voluntary Organizations in Rural Ontario10 , rural Ontario often lacks high-speed connections for Internet and e-mail. Many organizations, particularly in Northern Ontario, are restricted to using dial-up connections.
With technology now becoming recognized as a fundamental driver for rural communities, Internet service is increasingly seen as a key component of local infrastructure. However, Internet use by rural and small town residents in Canada lags a full 10 per cent behind the national average (58 per cent vs. 68 per cent). For many, this confirms the persistence of an urban-rural digital divide that persists despite the falling price of technology11. This also reinforces earlier research which found that fewer residents in rural areas and small towns have household computers or Internet connections compared to urban residents12.
While some communities have responded to this challenge – the first phase of a wireless high-speed network was completed in Haliburton County in October 2006 – there is still much to be done to bridge the digital divide facing small towns.