Jobless Canadians unwilling to move

Homebodies keeping economic boom from reaching potential, C.D. Howe Institute says

SIMON TUCK

Globe and Mail – July 20, 2006

OTTAWA — It's been almost three months since Robert Hulsman lost his job as a tractor-trailer salesman, but the Moncton, N.B., man says he has no plans to hit the highway any time soon.

He's well aware there are labour shortages in parts of southern Ontario, Alberta and elsewhere in Canada, but Mr. Hulsman says he has no intention -- at least for now -- of moving west.

While a new report from the C.D. Howe Institute, one of Canada's leading economic think tanks, says the economy would be much stronger if Canadians were more willing to move to find work, Mr. Hulsman, 42, says uprooting yourself isn't that easy.

His parents and eight-year-old son, Luke, live in the area, and there are lifestyle issues to consider as well: cost of living, congestion, traffic.

"I want to be involved in my child's life," said Mr. Hulsman, a university graduate with about 16 years in his field.

According to C.D. Howe economist Yvan Guillemette, however, there are significant costs to that reluctance to move. There are permanent gaps between the national unemployment rate and many regional rates, Mr. Guillemette says, and those gaps have been growing during the recent jobs boom.

In June, the national unemployment rate fell to a 32-year low of 6.1 per cent. And in some parts of the country, particularly in Alberta, businesses are suffering because they can't find enough workers.

The jobless rate can also vary dramatically, even among neighbouring regions. In south-central Manitoba, for example, the unemployment rate fell to a stunning 2.2 per cent in March of this year, while it was 8.3 per cent in nearby northwestern Ontario.

The lack of mobility, meanwhile, also hurts the economy because it means fewer workers paying income taxes and a smaller pool of labour in areas that need more people.

"It suggests that the boom has been milder than it could have been if Canada were realizing its full economic potential," the report says.

The tendency not to move is particularly pronounced when it comes to Canadians looking for work outside their home province. Worker mobility within the province is about three times greater than inter-provincial movement.

Mr. Guillemette says one of the obstacles to greater mobility is the federal employment insurance system, particularly the way it provides longer periods of eligibility and lower requirements in areas with greater unemployment. Such "regionally tilted" provisions give the jobless more reason to stay in areas with fewer jobs, he argues.

The report says the EI system has more effect on discouraging labour mobility among people who usually work only between 20 and 49 weeks a year.

For those, such as Mr. Hulsman, who normally work throughout the year, the EI program doesn't have much effect on their mobility. "It's such a paltry amount."

For others, however, it's a different story.

Jesse Sanderson, a Sault Ste. Marie, Ont., native who is looking for construction work in Toronto, says the system does provide a cushion for those who don't want to move.

Mr. Sanderson, 28, who has a community college diploma in computer programming, says he and many of his friends simply want to stay in their home town, despite its economic struggles.

"I don't like big cities."