Telecommunications Services and Regional Development: The Case of Atlantic Canada

K.J. Charles was Professor of Economics, Lakehead University, Thunder Bay.

The authors, Barry Lesser and Pamela Hall, warn that the information age which is upon us will bypass the less advantaged regions of Canada, just as the industrial age did, unless there is effective government action taken to counter the flow of market forces.

It was widely believed that the economic and social impact of information technology would be favourable to the less developed regions of Canada since the benefits of faster communications would compensate for the disadvantages of distance from the economic centres. A study for the 1971 Telecommission, in fact, came to this optimistic conclusion.

In principle, it is true that when economic activities become independent of distance they become independent of location. But the authors point out that what is possible is not necessarily what is probable. They warn that, left to market forces, the impact of information technology is likely to be centralizing rather than decentralizing in terms of economic activity. There is already some evidence that information technology is benefitting the central regions of Canada at the cost of the less advantaged regions. The telecommunications sector occupies a central position in the information economy in Canada. Under free market conditions its impact too is likely to be centralizing rather than decentralizing, thus exacerbating existing regional disparities.

The authors argue that this result is not inevitable. Imaginative and effective government policy could easily reverse this trend, and ensure that the benefits of the information age are more equitably distributed. One of the policy proposals the authors make is to institute a system of telecommunications subsidies in the Atlantic region similar to freight subsidies.

The authors argue their case with much force and conviction. The price of $20 for a soft-cover book of 175 pages seems excessive. Acknowledgement is made to four regional telegraph and telephone companies for their financial contribution to this project.