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EXECUTIVE SUMMARY

Rural Canada takes up over 90% of the nation's landmass and accounts for a third of its population. With its highly diverse economy and society, it provides employment, forest products, minerals, oil and gas, manufactured goods, agricultural products, foreign exchange recreation and tourism amenities for all Canadians. In fact, if primary economic sectors including agriculture, energy, mining, forestry and fisheries are invaluable to the Canadian economy, they are even more crucial for economic development within rural Canada itself. Over 500 predominantly rural communities are today largely or solely dependent on resource extraction in the mining, forestry and energy industries, while many more depend at least partly on natural resources or are integrally linked to the economic fortunes of the agricultural and fishing sectors.

Rural development can only occur if there is an appreciation of the many economic opportunities to be found in rural areas, and if the tools required to act on those opportunities are readily accessible. The primary purpose of this report is to recommend actions that will enhance the economy of rural Canada and give rural residents the development tools to remain within their communities.

Rural economic development ought to be a collective responsibility involving all three levels of government, rural stakeholders and the business sector. Within this broader picture, the federal government needs to play an active leadership role by facilitating the process of local economic development. It is best to leave rural communities to decide, as an integral partner in decision-making, how this development will actually occur. The Committee strongly believes that "bottom up" community development is a considerably more appropriate strategy than one which is "top down".

To help rural Canada develop further, policies need to be implemented that would ensure access by rural residents to government programs and services of equivalent quality to that enjoyed by urban Canadians. Ensuring quality access to education, training, infrastructure, communications, capital, research and development and other important tools is a vital precondition for rural Canadians to meet their economic development needs. To achieve such a "level playing field", it is not necessary to sharply increase government spending; instead, existing government funding programs can and should be proactively targeted at rural Canada.

The House of Commons Standing Committee on Natural Resources has concluded that the federal government needs to develop a comprehensive and regionally focused rural policy for Canada, one that includes a clear vision for the economic development of rural Canada. The Committee's Report focuses on seven specific development challenges.

It recommends that the federal government, in partnership with other levels of government, the industry and rural communities themselves, facilitate access to basic education through the use of new information technologies. It should also realign its training programs towards industrial needs and natural resource strengths.

With respect to the provision of basic development infrastructure, the government should inject a minimum of 50% of the expenditures under any future infrastructure program in rural and remote regions, and ensure that communication systems there keep pace with available technology.

Concrete actions are also required to enhance natural resource-based activities, increase value added and develop tourism. Such policy responses include the streamlining of the federal regulatory system and the removal of the existing regulatory bias against rural development; movement towards a rapid and fair settlement of native land claims; the establishment of effective policies to encourage firms to generate value-added production; the reduction of both domestic and global trade restrictions; and the development of tourism-associated infrastructure.

In addition, the Committee is of the view that much more should be done to assist small business development and encourage entrepreneurship in rural and remote regions. To this end, the Committee recommends that the federal government direct its existing development instruments such as the Business Development Bank of Canada and the regional development agencies to place greater priority on the economic development of rural regions. Wherever possible, the government should encourage the private sector, including Canadian chartered banks, to invest earnings back into rural communities.

Finally, the federal government should adjust its own organizational structure and delivery of programs, to the benefit of rural Canadians. The Committee strongly recommends that a new Minister of Rural Affairs be assigned responsibility for coordinating the rural development activities of federal departments. Moreover, the new Minister should be supported by a national policy institute on rural issues established in partnership with other levels of government, business and rural stakeholders. In redesigning its structure and programs, it is most important that the federal government aim for a single-window approach for the provision of its services to rural Canadians.

With the completion of this study, the Committee is convinced more than ever that there really is a separate rural economy which interacts in an important way with that of urban Canada. Without access to the natural resources of rural Canada, the manufacturing and service economies of urban Canada would be seriously disadvantaged. This interaction needs to be fully understood by urban Canadians and should be reflected in government policy that treats rural Canada on an equivalent footing with urban Canada.

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