How Newfoundland is Subsidizing the Mainland Provinces

I owe this idea to Nevil Shute; his novel The Far Country .

In Newfoundland a child is born, and raised to the age of eighteen or twenty two, depending on whether the child graduates from high school, or goes on to graduate from university. We can use twenty years as a good figure.

How much does it cost to raise a child to age twenty? Think not only of shelter, food, clothing, think of the cost of medical and pre-natal care. Realize that a couple with a family needs a larger vehicle, less fuel-efficient, than a childless couple. Every day of that child’s twenty years means a higher cost-per-kilometre for the family, whether the child is in the car or not. Likewise a larger house for a larger family means higher heating bills and so on.

Please make your own estimate. I have seen figures ranging from $200,000 to $500,000 per child.

When this article was written, children cost about $13,365.63. This means that the average cost of raising a child per month is about $1,113.80. In 2022, average cost ranges between $10,000-$15,000 a year.

In most cases, raising a child will cost from $10,000 to $15,000 a year until the age of 18 in Canada

A working figure is between $180K and $300K. Call it $250,000 or a quarter of a million dollars.

(Thursday, October 05, 2023 another study released Here's how much it costs to raise children in Canada ). Costs vary by province, household income and so on, but generally hover around the $250,000 mark.)

(Saturday, October 07, 2023 https://www.ctvnews.ca/canada/here-s-how-much-it-costs-to-raise-children-in-canada-according-to-new-statistics-1.6588427 )

Educated children of Bonavista head off to St John’s, Toronto, Alberta , Vancouver, or San Diego for work; they do not stay in Bonavista.

For every four children who leave Bonavista, Bonavista loses a million dollars. For every four children who leave Newfoundland, Newfoundland loses a million dollars.

Each $250,000 is essentially a gift to the mainland provincial governments. Each Newfoundland child who lands in Calgary or Edmonton is essentially a bag of 250,000 dollar coins.

No-one in Alberta needs spend a cent to obtain a fully-functioning literate healthy worker. A worker who can start paying income tax, buying goods and services and paying goods and services tax the day that they land. On the day that they land, the mainland benefits from the increase in business to all existing businesses.

Newfoundland loses.

How many children leave Newfoundland each year to work on the mainland? (see below) Multiply that number by $250,000 to calculate Newfoundland's subsidy to the mainland, until those children return at age 65 to spend their pension cheques “at home”.

The terrible corollary is that when above-average members of a population leave that population, then the average ability of the population is lowered.

A nasty truth. Perhaps we should discuss it.

BELOW: “Canadian Natural Resources Ltd., the largest construction company working in Alberta's oil patch at Fort McMurray, estimates that about 20 per cent of the employees working for its contractors — as many as 1,700 people — are commuters from Newfoundland and Labrador.”

If one company has 1,700 Newfoundland commuters, and each of those is worth $250,000, then think of half a billion dollars worth of labour going to that one company in Alberta alone.

High Schools

Consider the fifteen-year old child heading off to high school each day. Into the yellow school bus at 0800 hours, back home around 1600 hours. Ho hum.

Of course the bus has a capital cost, maintenance costs, perhaps the driver is paid an honorarium.

The high school itself cost fifty million dollars to build a few years ago; the high school has two hundred teenagers attending and the high-school courses run for five years.

Don’t take my word for it. Ask your own child how many years they will be at high school; have them ask the principal how much was paid for the high school, and get an estimate of the high school population. Plug your own figures into my calculation below.

That looks like ten percent of my $250,000 figure right there.

That’s the capital cost of the building, cash from the community assigned to raising a student.

Now add in the cost of administrative and teaching staff; add in maintenance costs (cleaning supplies, cleaning services)

It all adds up.

This community needs to add legal costs before it can start forking out its $71,000,000.

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