Being a rich and developed country doesn’t mean Canada is always perfect. Besides wealthy and modern central cities, there are still areas that are facing economic difficulties. One of them is New Brunswick. So, why is New Brunswick so poor? It may be because of the reasons below.
How Poor Is New Brunswick?
First of all, let’s take a look at New Brunswick’s economic situation, and acknowledge how poor it is.
New Brunswick is a marine province and the smallest region in Canada. In contrast with its wonderful natural gifts, New Brunswick has always faced significant economic difficulties.
According to Human Development Council’s Child Poverty Report Card, in 2018, child destitution in this province impacted more than 1 in 5 kids. It means that around 30,000 offspring live below the destitution line at that time. And at this rate, the percentage of child poverty is much higher than the general average for Canada, which is about 18.2%.
Moreover, it is not only the youngsters that are encountering challenges here. A notable number of elders have to live in poverty as well. In 2009, there are approximately 11% of seniors in New Brunswick lived in destitution, and about 14% of citizens did too. The portion of people with below-average income was 14.9% in 2019.
Though the living cost in this province is more affordable in comparison with others, many families are still struggling. About 17% of households here expend more than 30% of their earnings on housing. It indicates that housing isn’t reasonable for those citizens.
All of these depict the poor state of New Brunswick.
Low Tax Base But High Debts – Why Is New Brunswick So Poor?
New Brunswick has only about 800,000 residents. Such a small population leads to the limitation of the provincial tax base. As a result, the regional government has to struggle to create sufficient revenue. And because of the low tax base, they have to on deficit budgets for many years, thereby growing its debts.
After the Great Recession, New Brunswick’s budget deficit crisis got even worse. Although the provincial government has tried to increase spending in the hope of boosting the economy, the outcomes have not been so optimistic.
Low Productive Capacity
The low population also leads to another problem, which is low productivity. The youngsters of the province tend to move out to seek better chances. As a result, New Brunswick is one of the three provinces with the lowest labor productivity in Canada in 2019.
The aging population has also contributed to the low productive capacity. In fact, the percentage of senior workers in New Brunswick is quite high, so the productivity being average is not a surprise.
Low Salaries – Why Is New Brunswick So Poor?
Another factor responsible for the destitution in New Brunswick is the employment conditions. This region has the lowest average pay rate among others in the whole country.
Statistics Canada indicated that a person has to gain a wage of about $21,000 yearly to live beyond poverty. However, with this recent minimum pay, employees in New Brunswick gain only about $20,480.
Decrease In Private Sector And Limited Opportunities
It is also worth mentioning that the private enterprise’s contribution to the economy of the province has significantly decreased. It means that employment chances in the private enterprise are finite and most citizens mainly work in the public sector.
The main contributors to the economy of New Brunswick such as agriculture, manufacturing, fishing, forestry, and mining are decreased as well. This involved a drop in the province’s economy and led to the limitation of opportunities.
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