The report examines potential impacts of demographic decline on regions of Newfoundland and Labrador in the current and subsequent decade. Between now and 2030, the province will see a rapid aging of its population and a significant decline in the number of people available for work. A shrinking workforce will make it difficult for the province to maintain the current
level of economic activity without major improvement in labour productivity and the adoption of new technology. To provide an estimate of the size of labour force shortfalls across the province, we first identify five large regions that cover the entire province. For each region, measures of current levels of employment by sector are developed as a proxy for the level of
economic activity at the beginning of this decade. We then provide projections of the future labour force for each region. The gap between the two measures provides an estimate of the potential worker shortfall. While all regions will experience a shortfall, some regions face a much higher relative decline than do others, which suggests they will have a much harder time
maintaining current levels of economic activity. Because the province has both a low labour force participation rate, relative to other provinces in Canada, and relatively high unemployment rates, we examine the impact of increasing participation rates and reducing unemployment rates to the Canadian average by 2030. Once again, regional differences are significant, and the impact is larger in those regions that now have the lowest participation rates and highest unemployment rates.
While the current focus in the province is on improving fiscal conditions at the provincial level, this will be insufficient to ensure a prosperous future. However, improved provincial finances will be needed to fund the investments required to deal with demographic decline. These will include: a significant reform of skill development programs to ensure a more productive labour force; restructuring of public services to provide better elder care; a sound education for a smaller number of students; investments in new technologies to make firms in the province more competitive; and better matching procedures to connect workers with jobs. Crucially, because there are such significant differences among the five regions we define, in terms of
current types of economic activity, population dynamics and future economic opportunities, different types of investment will be required across the province. It is unlikely that the provincial government will have the capacity to effectively implement all the policies needed to address these diverse regional needs, even if current fiscal conditions improve. Thus we suggest that a significant devolution of responsibility, authority and financial resources to a new level of regional government will be equired if Newfoundland and Labrador is to effectively manage the necessary transitions.