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Studies find large economic disparities across Canadian provinces

Washington, DC — Two new OECD reports examining regional trends highlight large gaps in economic and social well-being across Canadian provinces in the wake of the financial crisis.


Washington, DC — Two new OECD reports examining regional trends highlight large gaps in economic and social well-being across Canadian provinces in the wake of the financial crisis.

How’s Life in Your Region measures well-being on a regional level using nine dimensions through a set of comparable indicators in 362 regions. Most of the well-being dimensions have at least one Canadian region in the top 20% of the OECD regions.

However, Nunavut, one of the smallest OECD regions in terms of population, is in the bottom 10% for safety, health, jobs and civic engagement. As a result, Canadian regional disparities in health and safety are among the largest across OECD countries.

“National standards of well-being are not felt equally by people living in different regions,” said OECD secretary-general Angel Gurría. “Smarter public investment, especially in cities, and reforms of outdated local government structures would help to address this.”

The high-performing Canadian regions fare better than the OECD average in all of the well-being indicators except for the share of voters in national elections.

Even in the low-performing regions, 85% of the labour force has at least a secondary degree, while 75% of households have access to a broadband connection, the data show.

A separate report, OECD Regional Outlook 2014, examines the main trends at the regional and city level, notably on increasing income disparities. The report highlights large employment gaps: In 2012 Nunavut had the country’s highest recorded unemployment rate of 15.1%, while Alberta had the lowest at 4.6%.

A total of 73% of Canada’s population lives in cities, while the share of the population living in metropolitan areas (urban areas with more than 500,000 inhabitants) is 56% compared to 49% across the OECD. Metropolitan areas in Canada were responsible for almost 54% of growth in the decade 2000-2010, slightly below the OECD average of 59.6%.

The study also highlights the important role of Canadian sub-national governments in public finance: 91% of total public investment was carried out by sub-national governments, the highest among OECD countries, where the average is 72%.

By comparison, in the United States …

The data shows that in 2010 the US had the largest regional differences in GDP per capita among all 34 OECD countries. Other findings include:

• More than 40% of US regions have a quarter of their population at risk of falling into poverty versus less than a tenth of regions in comparable European economies.

• All states and the District of Columbia rank in the top 20% of 362 regions across the OECD for income. However within the US, the largest gaps can be found comparing Idaho, with an average household disposable income of $23,833, and Washington, DC, which ranks first in the US with an average of $53,912.

• With a score of 9.2, New Hampshire is the highest ranking US state when it comes to safety, placing the state in the top 37% of all OECD regions. At the other extreme, DC, Maryland, Louisiana, Mississippi and New Mexico all score 0.0 for safety.

• The largest regional disparities are found in the health dimension, where the US has the third largest gap among OECD countries: while Hawaii ranks in the top 20% of OECD regions, Mississippi is in the bottom 10% of all regions in 34 OECD countries. Wide disparities are also found in jobs, safety, environment, access to services and civic engagement.

Meanwhile, the OECD Regional Outlook 2014 shows that 68% of the US population lives in cities. 53% of Americans live in metropolitan areas (urban areas with a population of 0.5 million or more), compared to 49% across the OECD area. US metropolitan areas accounted for 63.09% of GDP growth during the decade 2000-10.

The report also highlights regional disparities in unemployment trends. In 2012, the highest regional unemployment rate was found in Nevada (11%), while the lowest was in North Dakota (3.3%).

You can read more on the OECD’s work on regions at http://www.oecd.org/regional/regional-policy/ and you can compare nine well-being indicators in different OECD regions on the OECD Regional Well-being website at http://www.oecdregionalwellbeing.org/index.html.