By Peter Chow
In the 1960s, Sault Ste Marie offered numerous well-paying industrial jobs at Algoma Steel, the tube mill and St. Mary’s Pulp and Paper, spawning a large and prosperous middle class. The relative isolation of the local economy created a captive market for retail goods and services, as well as a cozy business environment dependent on a few key industries in a company town. Sault Ste Marie had the second highest per capita income in Canada year after year, trailing only Oakville.
That golden age has faded. The steel plant was forced to face greater global competition and labour-saving technological change. The workforce dropped from 9,000 in the 1970’s to under 3,000 today. As the Internet devastated the demand for paper, St. Mary’s Pulp and Paper died. The population dropped from 84,000 in the 1980’s to 66,000 in 2016.
Economic growth remains arrested. The economy has evolved into an enclave of high-paying and more secure knowledge-economy jobs, broader public-sector jobs and a swath of minimum-wage service jobs. The municipal tax base is stretched thin to provide spending and service levels that evolved when there was a lucrative industrial tax base; property taxes have been rising for years. After decades of youth out-migration, the population is aging faster than the Canadian average. The median age has risen to 47 yr. old, compared with the provincial median of 41 – half the city is 47 or older.
This has increasingly made economic polarization, mental-health and addiction problems and a decaying social fabric marked by crime, drugs and an increased use of shelters and food banks a fact of life.
What has happened mirrors the U.S. Rust Belt, where economic trauma has fuelled populism and negative attitudes.
In the U.S., times are tough for small American cities trying to lure an educated workforce. One-quarter of the graduates of elite Ivy League universities move to New York, Washington or San Francisco; other major centres snap up many of the remainder. So increasingly, less popular cities and states are turning to financial incentives. Last week, Topeka, Kansas announced that it would give $15,000 to people who relocate to the city and buy a home (just $10,000 for renters). Topeka’s population and job numbers have stagnated this decade. It joins the small, rural state of Vermont, which in January started paying $10,000 to people who moved there to work remotely; so far, more than 300 people have accepted. Tulsa, Oklahoma, offers $10,000, and Baltimore, $5,000 towards a home purchase. The efforts are modest—Topeka aims to attract 100 skilled workers—but they are a desperate attempt to level a playing field tilted sharply toward high-demand cities.
Drastic times call for drastic measures. Is it time for Sault Ste Marie to offer financial incentive for people to move here ?