Beyond bedroom communities, rural Manitoba towns boom thanks to economic risk-taking

This column is an opinion by Brian Kelcey, an urban public policy consultant who previously served as budget advisor to the mayor of Winnipeg from 2005-08and as a senior political advisor at Queen's Park. For more information about CBC's Opinion section, please see the FAQ.

For decades, the public policy conversation about Manitoba's small towns and cities was dominated by issues of managed decline.

The latest census confirms this is changing in some cases, rapidly in several communities.

It's not just the bedroom communities around Winnipeg that are growing, however, but those that have taken charge of their own economic destiny.

Of course, it is true that Winnipeg's bedroom communities are surging. West St. Paul (population up 24.5 per cent since 2016) and Headingley (up 21 per cent) are growing just outside the Perimeter.

However, further afield, the trend is more about jobs than bedrooms. Consider two of the biggest 2021 census winners Neepawa and Niverville, 170 kilometres and 32 kilometres away from Winnipeg city hall, respectively.

"You have to understand," Neepawa Mayor Blake McCutcheon told me in an interview late last summer, "for 50 years, we were at 3,300 people."

When I asked him what he thought 2021 census numbers would show, he said he would be "astounded" if Neepawa hadn't reached 6,000 people.

In the end, Statistics Canada counted 5,685 residents. But I doubt anyone would fault his high estimate. Neepawa is now ranked as the 13th-fastest growing community in all of Canada.

Neepawa has almost doubled in size, largely due to the 2012 arrival and expansion of a single industrial employer in the southwestern town: the HyLife pork processing plant.

The factory is a direct descendent of the OlyWest project that was driven out of Winnipeg by various critics in 2007-08. A few years later, Winnipeg city council rejected a cement plant not far from the OlyWest site, proposed for empty land that was zoned for a steel plant.

Many industrial investors took the hint. It's no accident that Saskatchewan's food manufacturing output grew roughly twice as quickly as Manitoba's over the last decade,according to Statistics Canada data.

For too long, Winnipeggers and Manitobans have dined out on economic myths based on passive factors like geography, luck or destiny.- Brian Kelcey

But some food processors, life science manufacturers and heavy industries that may have seen Winnipeg as risky didn't abandon Manitoba. Think of the Simplot and Roquette plants in Portage la Prairie, or Valeant's drug plant in Steinbach, or Selkirk's December 2021 announcement of an incoming solar cell glass plant as examples.

At least a few Manitoba towns and cities seeing growth can credit a broader mix of employment gains. Morden (up 14.5 per cent) and Winkler (up 8.6 per cent) both host a more diverse mix of employers.

The rock star in this club is Niverville (up 29 per cent to 5,947 residents) Canada's fifth-fastest growing community in the 2021 census.

Most observers explained Niverville's growth the easy way: the town must be drawing long-range commuters from Winnipeg. And it is.

But things get more interesting when you look under the hood at what is powering local growth.

Rethinking 'rural'

Niverville's single largest employer is a health centre. However, 2019 economic data shows the largest source of employment is local construction and electrical firms.

A few days ago, I spoke to Niverville Mayor Myron Dyck to get an explanation.

"In 2009, council was concerned that our tax base was split 85 per cent-15 per cent residential to business," Dyck said. So the town launched several initiatives to deliberately spike local business activity.

A quirk that Neepawa's McCutcheon and Dyck both shared when I spoke to each was a team-player willingness to credit their towns' successes to long-term choices and strategies, even if some decisions were made long before either man was mayor. McCutcheon praised his predecessors for a bold, but successful, gamble on a town-led housing development.

Dyck credited previous councils for taking risks on a business park development. Niverville's payoff: the town has dozens of registered construction businesses, and several moved out of homes and garages into expansion-friendly, tax-generating storefronts and offices.

One lesson to draw from this hum of activity is the need for a clearer sales pitch.

Manitobans have gotten away with crude generalizations about our economic geography for more than a century. There's "urban Manitoba" (just Winnipeg) and "northern Manitoba" (a territory the size of many European countries). Literally everything else is "rural" Manitoba.

This default label is so widely accepted that when the Pallister government launched a new economic agency for everything outside of Winnipeg, they called it the "Rural Manitoba Economic Development Corporation."

It may be time to reconsider that branding. I've spent my career talking to city politicians about city problems and city policies. Interviewing mayors like McCutcheon or Dyck, it struck me just how familiar their challenges were.

For decades, small-town Manitoba "housing policy" meant provincial funding for a local seniors' home so retirees could be nearby for their golden years.

But when I spoke to McCutcheon in mid-2021, housing pressure in Neepawa (pop. 5,685) was as urgent an economic development problem as it is for the mayor of Toronto (pop. 2.9 million).

Rural communities, urban issues

When Dyck mentioned the (intriguing) list of policy steps he and his predecessors had introduced in Niverville, he highlighted a tax incentive designed to encourage business longevity and a rule change to allow rental housing to be built over commercial storefronts.

While take-up on the latter is as modest as you'd expect in a small town, both ideas would fit comfortably into ongoing policy debates in several Canadian cities.

When I asked McCutcheon in August what his top unfunded priority was to keep up with Neepawa's growth, he surprised me with one word: "recreation."

Most of HyLife's workforce is made up of new immigrants with families, so pressure on education facilities is also problematic, even after recent expansion of the local school.

A telltale list of signals is popping up in other communities, too.

Take transit: Brandon began testing transit-on-demand for its existing bus service in 2021. Selkirk launched a new bus service in 2011, and Steinbach Mayor Earl Funk recently said he wanted public transit service built into his city's upcoming 10-to-20-year community plan.

They're taking long-term risks, they're saying yes to outside investments, and they're proactively building conditions for economic and population growth.- Brian Kelcey

In short, this isn't "rural" growth, even if it may be rural-adjacent. While business parks and factory-builders seek cheap greenfield land, they also need serviced land near a labour supply. New workers need schools, clinics, amenities, and water and sewer services.

While it may be happening on a small scale, the best description of the trend in these "rural" towns and cities is well, there's no way around it. It's urbanization, with policy and investment implications to match.

But there's another lesson here, and it's about attitude.

For too long, Winnipeggers and Manitobans have dined out on economic myths based on passive factors like geography, luck or destiny. You see it in the (ahistorical) myth that the Panama Canal killed Winnipeg's boomtown destiny, or endless claims that Winnipeg's distance from major markets somehow equates to a "strategic location."

In defiance of that history, community leaders in a growing number of Manitoba small towns and cities are shifting from passive to active economic thinking. They're taking long-term risks, they're saying yes to outside investments, and they're proactively building conditions for economic and population growth, one risk at a time.

They are changing their economic fate in the process whether or not some bedroom community residents happen to be along for the ride.

This column is part of CBC's Opinion section. For more information about this section, please read this editor's blog and our FAQ.

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