Rural communities have an unprecedented chance to thrive in a post-COVID Canada

As governments increasingly incorporate inclusive growth principles into their economic policies, there is growing recognition of the potential for well-designed place-based economic strategies to bolster the well-being of rural communities across Canada.

For too long, rural policy has looked at small communities through the lens of seemingly inevitable urbanization and the growth of large city-regions. Government policies have often focused on remote and rural communities as places to subsidize instead of places that can thrive and innovate.

But these assumptions and narratives are changing, and decision-makers are in a good position to confront conventional approaches to economic development programs. Some rural policies developed before the COVID-19 pandemic may not be equipped to meet the most pressing challenges rural communities are facing today. The renewed ambition and scope of policy-making prompted by COVID-19 and recovery planning — the need for decision-makers to both respond to and shape “a new normal” — has the potential to benefit Canada’s rural communities in an outsized way.

As part of that shift, we need to focus on the prosperity of rural communities on their own terms — as places of community well-being and economic opportunity — not just as extensions of cities or cities-in-waiting. To be successful, programs must acknowledge the importance of place and how well-being manifests itself in spatial ways in communities.

To improve rural well-being, new approaches cannot be driven by traditional economic indicators alone. Governments and Canadians understand that well-designed policies must pursue economic, social and environmental objectives together.

Many of the most important issues we face — climate change, economic inclusion, reconciliation, and building successful Canadian businesses — need to be looked at from a local and community perspective, with local voices and insights. The challenges presented by these issues manifest themselves differently in rural communities.

The federal government has signalled interest in strengthening its approach to Canada’s rural economies through the appointment of a Minister of Rural Economic Development and its Economic Development Strategy for Rural Canada, as well as through commitments in the 2021 Liberal election platform. The strategy has identified priorities, plans and tools, but there remains a lot to do in terms of execution, acceleration and adjustment as we emerge from the pandemic.

Key themes for discussion

Early roundtables, interviews and other research conducted as part of our Canada 2020 project, A Sustainable, Inclusive, and Digital Future for Rural Canada, have highlighted a number of key themes where governments and communities must accelerate and deepen their work in order to deliver an inclusive and sustainable economic future for those living in rural communities.

These are well-aligned with the government’s rural economic development strategy, but they also highlight areas where the pandemic has revealed new needs or opportunities, and where effective execution of the strategy will be particularly challenging. Accelerating connectivity is an enabling condition to make progress on many of the issues that have been highlighted.

Theme 1: Supporting investment in businesses

Canada has a lot of strong, thriving businesses in rural areas but they have been facing issues for decades. Many family-owned businesses face succession challenges and others have difficulty connecting with large markets and customer bases. The pandemic hit SMEs hard, including in smaller communities. Business support programs, often delivered by regional development agencies, played a key role in helping many survive. But as business activity accelerates, how can programs better support small and medium-sized businesses in rural communities to digitize, scale and export?

Theme 2: Making the right investments in physical, digital and social infrastructure

Inclusive, place-based approaches require investing in traditional and digital infrastructure. These investments need to support economic, social and environmental outcomes.

Connectivity is a key enabling pre-condition for many of the issues discussed in this paper. Canada has done a good job in accelerating investments in connectivity for rural regions through investments in broadband, but these investments are effectively catch-up. How do we ensure that with the next wave of technological change, rural areas won’t be left behind? What other much-needed investments must the federal government make to ensure quality of life in rural Canada?

Theme 3: Advancing reconciliation

Place-based economic strategies can align with Canada’s commitment to reconciliation, self-government, re-building of Nations and Indigenous economic self-determination. But how do we ensure that Canada’s rural policies help deliver on these promises in practice, rather than just in theory?

Discussions of inclusive economic growth and place-based economic strategies for rural Canada cannot be complete without an understanding of how these strategies implicate and intersect with Indigenous self-determination and the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), which has now been incorporated into Canadian law. For many people, the term “rural” brings up mental images of predominantly white farm towns. But Indigenous people represent a high proportion of the population in rural areas all across Canada. Nearly 60 per cent of Indigenous people in Canada live in rural areas or small population centres. That means when decision-makers and policy advocates talk about rural economic development, they are implicating Indigenous communities and non-Indigenous communities that often live directly alongside them.

Inclusive, placed-based economic approaches are in line with the goals of Indigenous economic self-determination and self-government. Place-based approaches emphasize local decision-making and put the economic, social and environmental well-being of the community at the centre. Many Indigenous communities are proximate to larger urban areas and are integrated in terms of economic development and local and regional labour markets. Others share in the ownership, development and benefits from natural resource projects. But we can’t expect place-based approaches to inevitably produce economic development for Indigenous communities. To actually make progress, positive outcomes for Indigenous peoples must be an intentional outcome, with policy, program design, governance and delivery re-oriented to prioritize it.

Theme 4: Ensuring access to high-quality public services

Access to high-quality health, education, child care and social services is crucial for the well-being and quality of life of rural residents and communities. Accessible public services make it easier to live, work and raise families in smaller communities. Ensuring that rural residents can access education, care and other human services in their communities and in a culturally appropriate fashion matters both for individual well-being and broader economic prosperity because it is more difficult to attract and retain people and capital if services are difficult to access.

But many communities face significant gaps. For example, in Nunavut, more than half of mothers have to leave the territory to give birth and young people must leave their communities for most post-secondary training. As governments make significant investments in social infrastructure and roll out investments that will enable the digital delivery of many public services, how can government best support rural regions now and into the future?

Theme 5: How we make decisions: devolution, decision-making, capacity and governance

The Government of Canada has been taking governance and decision-making questions seriously in recent years. Among these initiatives are a new dedicated Minister of Rural Economic Development, a Rural Economic Development Strategy anchored by a Centre for Rural Economic Development, and the expansion of Regional Development Agencies (RDAs). The RDAs in particular have played a critical role during COVID-19 economic response and recovery, ensuring that tailored support reaches rural communities.

We know that historically, the federal government has had a difficult time engaging communities on their priorities and co-creating approaches or even devolving resources and decision-making authority. But the value of place-based economic strategies lies in their ability to leverage community knowledge from the ground up. The ability to effectively execute rural strategies lies in the ability for higher orders of government to approach issues with humility and trust local stakeholders with resources and power. Yet government programs are often burdened with narrow terms and conditions that presume superior understanding of local needs and are drafted in ways that prevent experimentation, local innovation, or learning from local experiences.

Seizing the opportunity

Canada’s rural communities are at a pivotal moment. Throughout much of the last half century, there has been compelling evidence that the future belonged to large cities. This is a moment to re-think that narrative and ensure sustainable and inclusive economic growth builds community well-being for people who live in communities of all sizes.

There is an opportunity to advance new economic and community development approaches in smaller communities in light of post-pandemic realities. Digital infrastructure, opportunities for distributed work, new connective infrastructure like rail, the opportunities for digital delivery of services, and the cost of housing are all impacting how people and businesses think about where they will work, live and invest in the future.

These new facts require policy-makers to reflect on the tools they use for economic and community development, and whether the assumptions and goals that underpin many of these tools are still the right ones. They require governments to make sure they have data at the community level that will allow them to understand what is happening and how to respond.

The resilience, dynamism and adaptability that has been built by rural communities in Canada may make these places uniquely equipped to flourish in this new chapter of disruption. To harness new possibilities, however, Canada’s decision-makers must come to these issues with humility, trust in the knowledge of local communities, and give greater primacy to rural leaders and local expertise in policy-making processes.