The Low-skill Labour Shortage Facing Rural Ontario
Before COVID hit, I took a trip to Lucan, ON to pick up a bookcase built by a Mennonite furniture store. We left early. We had time to stop for a coffee, and the Tim Horton’s was just down the street. On the way in I noticed a note on the door:
“Attention Customers.
Due to staffing challenges, we will no longer be able to remain open 24 hours a day.
Our new hours are as follows…”
When I worked fast food jobs during my time in university, the overnight shift wasn’t too tricky to staff. It guaranteed full-time hours and came with a wage premium. While not everyone was cut out for this sort of work, there was always a steady supply of people looking for work. Transportation was accessible — either on foot, by bus, or by car. Housing in the area was reasonably affordable (especially in a student neighbourhood). Being in a city of almost 400,000 people didn’t hurt, either.
But what the note on the door actually tells of a growing problem in rural Ontario: businesses will struggle to staff their service sector, full-time jobs because of barriers associated with transportation and housing. And this problem will now accelerate due to COVID and the interprovincial migrations the pandemic has driven.
Rural Ontario holds very dear to my heart; it’s where I grew up and I thank my upbringing in the country for my fondness of nature and lack of allergies. Settlements in rural Ontario were based around natural resources or agriculture. In Northern Ontario, towns sprang up around mines or timber harvesting. In Southern Ontario, it was the farm that drove the economy. But starting in the late 1990s, rural Ontario started to experience a steady decline of young people.
The reason for this is simple: post secondary education. The youth of rural Ontario heard about college or university and the promises they held, so they left for larger cities to gain an education. Their parents also encouraged it. They saw that farming was quickly consolidating to large-scale operations, and a lot of the mines in the Canadian Shield towns had already closed.
Some of the youth returned, but most remained in larger urban centres. Unless they happened to work in resource-sector jobs, agriculture, or trades, there wasn’t much in the way of work for these newly-minted graduates.
The youth population vacuum is quickly being filled, however, by those in the 25–44 demographic. While large cities present a better opportunity for quality work, they are prohibitively expensive for individuals once they reach the age of prospective home ownership and marriage. Not many people want to be married with children in a 500 sq. ft condo.
As a result, communities in close proximity to the larger population centres in Ontario (the GTA, Ottawa, Hamilton, KW region, Halton region, and London) have experienced a population boom. Housing prices in the GTA are to blame.
Twenty years ago high house prices and lack of detached housing supply in Toronto caused people to look for homes in Mississauga or Brampton. This suburban boom has now stretched as far north as Keswick and Barrie, as far west as Guelph and Orangeville, and as far east as Peterborough.
Ottawa, which is a 5 hour drive from Toronto, has even felt this influence as people flee one large city to the next in search of cheaper housing. Now every city in Ontario with a population over 80,000 people (except Windsor and Thunder Bay) has seen housing prices exceed an average of $500,000.
But large cities were just the beginning. Small communities around each large city have also seen house prices increase to soaring numbers as people are selling their home in the city and cashing out to buy a larger home in a smaller community.
For example, in Lucan, a village with less than 2,000 people, new row townhouses are getting built for a purchase price of $425,000. While Lucan is hardly remote (it does have a Tim Horton’s after all), it’s a signal that rural communities are being targeted for development more and more as commutes become less of an issue now that remote work is the norm.
So we’ve established the cycle where young people leave their small community, go to school, and settle in either Toronto, Ottawa, or one of the several mid-sized cities along the 401 corridor in Ontario, and then flee to the suburbs when they’re ready to settle down. But thanks to insane housing prices and COVID making remote work a reality, rural communities are next on the target list for prospective house buyers.
So what does this have to do with a Tim Horton’s in Lucan not being able to staff its graveyard shift? Simple: labour force supply and housing supply.
Rural communities follow a similar pattern. They have the basic level of services required to sustain the local population. They have a grocery/general store, a bank, a post office, an LCBO, and if you’ve hit the big time, a Tim Hortons or a Subway — sometimes both! Not included are the smattering of adorable little shops and restaurants that give each town its character.
The issue is that most of the jobs required to make these places function are not high-paying ones that require advanced education. These jobs are also skewed towards employing people aged 15–24, which is also the group with the highest flight risk due to PSE. As the youth leave, the slightly older individuals who are house-hunting roll into town. When youth leave and middle class employed people return, that leaves you with a labour supply vacuum.
But not everyone leaves. The other issue is rising housing costs and a low supply of rental units. Most locals in rural Ontario now can’t afford to buy their house from themselves. The people who work service sector jobs of the same caliber in a large city are likely to rent, but the housing supply is being targeted at middle-class and above home buyers.
Some people may entertain the idea of converting their basement into an apartment, but we can’t rely on these what-if scenarios. The youth of rural communities who aren’t fortunate enough to leave for PSE have no place to go.
The Tim Horton’s in rural communities like Lucan not only employ a number of younger residents, they also provide a different function for the population at the other end of the age spectrum. Coffee shops are an excellent social hub older residents in rural communities.
I recall that my grandfather used to do weekly meetups with a group of friends at the local Tim Horton’s. Older residents like smaller communities because the pace of life is slower and they provide a better sense of belonging. Rural communities are disproportionately elderly.
For example, in Lakefield, the community that I lived in before I left for university, 40% of the population is over the age of 65 (no wonder I wanted to leave). An aging population also presents its own set of challenges.
Rural areas are far more walkable, but in order to access a larger degree of services in larger cities nearby, reliable transportation is required. Access to a car is not guaranteed for elderly citizens, particularly those who have health conditions that prevent them from driving. Inter-community transportation doesn’t exist. The temporary shutdown of Greyhound added another barrier.
For elderly citizens who no longer wish to live in a house, the housing supply in rural communities are typically not geared towards small footprint dwellings like apartments or condos. Much of the social and health services that these individuals need at home is increasingly being moved to urban centres.
This issue is not unique to Ontario; it’s happening all over Canada and all over the United States as well. A TikTok video showcases the situation in Crested Butte, Colorado. A ski resort town that is a playground for the wealthy is suffering from a massive labour shortage because young people who typically hold these types of jobs can’t afford to rent there, or housing simply isn’t available because everything is either owned or rented via AirBnb.
Ditto for ski resort towns like Bozeman, Montana, which has a housing crisis so bad that Wall Street Journal ran an entire article about it. In Canada, we have tourist areas like Canmore/Banff, Muskoka, and Whistler-Blackcomb that are all experiencing surges in home prices due to the work from home revolution. This problem existed before COVID even hit. Stuck in the middle of this movement are lower-income renters, who cannot afford to buy a home nor can they locate reasonable rental accommodations due to low inventory thanks to AirBnb.
We are rapidly progressing towards a society where many desirable resort towns are becoming the full-time residence for the wealthy, yet they are unaffordable for those who work jobs to serve the wealthy. This is documented in a Bloomberg article, which showcases that desirable rural areas are rapidly outpacing historical regional incomes.
“Teton County in Wyoming, home of the Jackson Hole ski area, has the highest asset income per capita in the U.S. at $164,400, while neighbouring Uinta County has just a $7,100 per capita income.”
The challenges facing rural citizens have been documented quite substantially, but with the pandemic accelerating urban flight and shifting housing booms to rural communities, risks are increased for those communities for their more vulnerable citizens.
The only positive to come out of this would be increased access to services should a population reach a tipping point and community leadership be vocal enough. However, until that point is reached, staffing basic service jobs and housing citizens of a lower socioeconomic standing will continue to accelerate unless action is taken. The lovely resort towns that are playgrounds for the wealthy rely on service sector employees to thrive. If these people have no place to live, who’s going to serve your next meal or bring you your next drink on the golf course?