Canada needs to become more densely populated

We need a larger internal market that would create economies of scale and further economic productivity growth

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Former prime minister William Lyon Mackenzie King once quipped, “If some countries have too much history, we have too much geography.”

This has always been evidenced in Canada’s low national population density, estimated at about four people per square kilometre.

Nevertheless, we’re still a highly urbanized country with more than 80 per cent of our population living in cities and towns. Despite our vast geography, we’ve created more density, and the benefits that flow from it, in our major urban centres.

But do we have the right kind of population density?

Population density is important because it creates nodes of economic activity and opportunity that foster economic innovation, productivity and growth, as well as diverse cultural and artistic opportunities. Dense urban centres allow for economies of scale in spreading the cost of infrastructure such as transit across more people, creating efficiencies.

Studies have found greater urban population densities associated with economic productivity gains, especially in knowledge and creative industries. And a recent Fraser Institute study comparing population density in cities across Canada and other high-income countries found that Canada’s major cities have relatively low population densities compared to other international cities.

For example, Toronto, Canada’s biggest city at 2.7 million people, seems crowded at 4,457 inhabitants per square kilometre. But compare it to Barcelona, which has 1.6 million inhabitants in a smaller area, leading to a population density of 15,873 people per square kilometre. The coastal hubs of San Francisco and Barcelona are 1.31 and 2.89 times as dense as Vancouver, which at 5,493 people per square kilometre is Canada’s densest major city. Chicago, New York and London are 1.03, 2.45 and 2.48 times as dense as Toronto. Paris is 4.29 times as dense as Montreal.

This tells us that Canadian cities have room to become denser relative to other major cities.

And not only do we need Canadian cities to become more densely populated, we need more large cities.

While Canada is an urban country, it needs more large and dense cities to provide a larger internal market that would create economies of scale and further economic productivity growth. This means increasing Canada’s population.

Take Canadian and U.S. per capita gross domestic product (GDP). For much of its history, Canada’s per capita GDP has been at about 80 per cent of U.S. per capita GDP. This productivity gap occasionally narrows – particularly during a natural resource boom – but then tends back towards the average. It has remained a constant. What’s also interesting between Canada and the United States is the difference in population concentration that has accompanied this productivity gap.

Canada is a long linear country with much of its small population clustered along the U.S. border with a few larger nodes. The U.S. has a population 10 times the size of Canada but spread out across the country in a hub-and-spoke network linked by an extensive transportation system. The U.S. has a larger population and market size and denser population. But compared to Canada, it’s also less concentrated in a few large cities.

In 1950, about 15 per cent of the U.S. population lived in its largest 10 cities compared to 23 per cent in Canada. While America’s population has grown and become denser, the proportion of its population living in its top 10 cities has actually shrunk, from 15 per cent in 1950 to about eight per cent in 2016. Over the same period, Canada’s population in its top 10 cities grew from 23 per cent to 31 per cent.

While we need cities the size of Toronto, Montreal and Vancouver to become denser, we also need more cities the size of Winnipeg spread out across the country.

The solution?

Whether via natural increase or more immigration, Canada can benefit from a larger population spread out in more large, vibrant and competitive urban centres to foster growth, innovation and productivity.

This is our real challenge for the 21st century.

Livio Di Matteo is a senior fellow at the Fraser Institute and professor of economics at Lakehead University in Ontario.

population density

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

Livio Di Matteo

Di Matteo specializes in public policy, health economics, public finance and economic history. He holds a PhD from McMaster University, an MA from the University of Western Ontario and an Honours BA from Lakehead University.

One Response to "Canada needs to become more densely populated"

  1. Letters to The Editor   September 3, 2018 at 12:46 pm

    I very much agree with Livio Di Matteo’s view that we can benefit from a larger population, which is spread out in greater larger urban centres. However, it would also greatly help, in the rapid economic development of Canada, if experienced agricultural farm workers, migrating from the developing countries, join the scanty population of this great country!

    Jalaluddin S. Hussain
    Resident Editor Canadian Asian News, Montreal


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