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Atlantic Canada Human Development Index Study
Despite regional, domestic and global circumstances that have curbed economic development in Atlantic Canada over past decades, evidence from recent years reveals an economy which has continued to diversify and progress.
This diversification has resulted in the industrial character of Atlantic Canada
being notably different today from what it was two or three decades ago. Primary sectors
continue to have an important role in the economy of the region. However, new growth
industries are having a positive impact. These include machinery and aircraft
manufacturing, food processing, energy, trade and distribution, finance and insurance,
business services, recreation and tourism.
Importantly, Atlantic Canada entrepreneurs have been responsible for many of the
success stories in these emerging industries. Possibly even more significant is that private
investors from other provinces and countries have begun to recognize the many attributes
of Atlantic Canada and to pursue opportunities in keeping with the growing potential of
the region.
The results of this study add to the information base for Atlantic Canada available
to potential domestic and foreign investors. Investment location choices are founded on a
region's relative competitiveness in terms of direct costs, as well as other factors such as
social structure and amenities available to employees. The focus of this analysis is on
economic and other quality-of-life indicators, complementary to existing and ongoing
research aimed at measuring direct costs of investment.
This study assembles for Atlantic Canada the United Nations' (UN) Human
Development Index (HDI) and other indicators from the UN Development Programme's
Human Development Report (HDR). By way of these measures, a relative ranking of the
region vis-à-vis Canada and other industrialized countries can be determined, revealing
underlying strengths and weaknesses in Atlantic Canada's make-up. These indicators can
also be used to identify the status of economic and social development in the region,
assess potential investment opportunities and focus policy action.
Last year, Canada was ranked number one on the United Nations' HDI scale,
using 1992 data. If Atlantic Canada was integrated into the UN's HDI rankings, the region
would be positioned ahead of the United States, which occupies the number two spot in
country rankings.
In addition to ranking ahead of all other countries, Atlantic Canada attains an HDI
only marginally below the Canada average. Given no differences in educational
attainment across provinces and the heavy discounting the UN applies to income in
excess of $5,120 purchasing power parity dollars ($PPP), Atlantic Canada's HDI rating,
relative to the national average, largely reflects differences in life expectancy.
Relative to other G7 nations, Atlantic Canada's performance, measured on the
HDI scale, is roughly 1 per cent ahead of the US and Japan, but as much as 3 to 4 per cent
ahead of others.
Recognizing that the HDI has various strengths and weaknesses as an indicator of
human development, the UN, as well as others who have examined the index, have
offered important recommendations for its application. First and foremost, it is advised
that the HDI be used in conjunction with a range of indicators for a more complete
assessment of human development. After examining these indicators, Atlantic Canada's
major strengths and challenges are:
Major Strengths:
• Healthy and long life expectancy
• Strong commitment to education, higher education particularly
• More equitable distribution of income as compared to other G7 nations
• Abundant internal renewable water resources
• Low inflation performance
• Above-average economic growth, 1982-91
• Strong earnings per employee growth, 1980-91
Major Challenges:
• Low rate of industrialization
• High rates of unemployment, including youth
• Decelerating population growth
• Low investment effort
• Few scientists and technicians and low tertiary science enrolment
• High rate of energy use per capita
Overall, Atlantic Canada ranks very high relative to other industrial countries,
based on the UN's indicators of human development. That is, relative to other nations,
Atlantic Canada is not a poor sister.
If we "place" Atlantic Canada as a "country" on the world scene, its size,
measured in GDP ($US) terms, is one-tenth the size of Mexico, three-quarters the size of
New Zealand, Ireland or Chile, but about the same size as Hungary and many other
former East Bloc nations (Belarus, Kazakhstan, Czech Republic). However, in terms of
real GDP per person, adjusted for purchasing power, Atlantic Canada's income is 10 per
cent higher than New Zealand's, 30 per cent above Ireland's, double that of Mexico, Chile
or the Czech Republic and 2.5 to 4 times greater than that of many former East Bloc
countries. In addition, Atlantic Canada has a well-educated labour force, good
infrastructure and good social capital, some of which has been encouraged through
government action. Overall, Atlantic Canada is an enticing potential investment location!
Nevertheless, some gaps or challenges have been identified for Atlantic Canada
and some directions for public policy are indicated. Not all of the region's identified
shortcomings can be easily remedied by public policy action (e.g., decelerating population
growth), but this analysis suggests that measures to encourage investment, improve
technical skill levels of the labour force and reduce unemployment are needed in Atlantic
Canada.
A major goal of the HDR is to encourage governments, international
organizations, and policy makers to participate in improving statistical indicators of
human development. This report responds to that challenge. Information is presented
which augments existing data sets and facilitates international comparisons. Although a
number of the UN's human development indicators could not be replicated for the region,
or were found not to be relevant, most contribute to a better understanding of the region's
human and social character.
This analysis has identified valuable sources of data for monitoring Atlantic
Canada's human development, but more work is yet be done. The development of new
indicators describing additional aspects of Atlantic Canada's economy, social structure
and human progress should be encouraged. In addition, there are areas where data
collection must be improved to make international comparisons feasible.
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