The Economic Challenge

• Rural areas contain low population densities dispersed over wide areas.
• This leads to high transportation costs and lack of economies of scale.
• The traditional competitive advantages that have sustained these regions in the past – access to natural resources and low production costs – have been nullified by the global competition generated by lower transportation costs and reduce trade barriers.  
  • In particular, the large manufacturing companies which use to take advantage of municipality’s low costs and loyal workforce are leaving in response to heightened global competition. 
• As a result of these forces, rural Eastern Ontario family incomes are almost 20% lower than the Ontario average.

The Academic Challenge

• Compounding the economic problems is a shift in political interest away from rural issues.
• According to the 2006 Interim Senate Report Understanding the Freefall: the Fight Against Rural Poverty, the rural poor are under-researched and under-represented since most academic and activist communities are preoccupied with studying the plight of the urban poor.

The Demographic Challenge

• Rural populations are aging more quickly than the broader Canadian population.
• Retirees possess experience and external networks that can serve their adopted communities well, but if they are not engaged, they add little economic support in terms of purchasing power and labour capacity. 
• Further, retirees need more government services such as healthcare; unfortunately, rural communities often lack the critical mass necessary to adequately supply these important services. 
• As well, youth out-migration reinforces the shortage of skilled labour in Eastern Ontario. The youth that remain are less educated than their urban peers.

Breaking the Cycle

• Ultimately, the problems of Eastern Ontario result from a downward cyclical system.
• Low population density leads to a lack of critical mass for services and infrastructure; this lack of mass also repels business investment. 
• This lack of infrastructure, service and jobs forces youth and young families (especially those with marketable skills) to migrate away from rural communities, further lowering the population density.