This article analyses regional resilience to economic shock in Canada from 1987 to 2012, a period that included severe recessions and major free-trade agreements. Employment is cross-tabulated by region, industry and gender and partitioned cumulatively using three-way multifactor partitioning for each period from 1987–1988 to 1987–2012. Employment loss in each recession is found to be more closely associated with industry-mix in the preceding growth period than with the region effect. At each recession, manufacturing had much bigger employment losses and a much weaker recovery than business services. Thus manufacturing amplifies economic shocks, while business services act as regional shock absorbers. Manufacturing employment decline in Ontario was influenced by trade liberalization and far exceeds what would be expected from the industry and region effects alone. Female employment growth outpaced male employment growth in every region and in every industry group apart from business and appeared to be more resilient to recession. But corrected for their industry composition and regional disparities, these gender differences are substantially reduced.

The geography of the Canadian economy has long been dominated by heartland‐hinterland contrasts, with manufacturing identified as the dominant function of most heartland cities in analyses of the 1961 and 1971 census data. However, the proportion of employment in manufacturing has been declining in the heartland provinces of Ontario and Quebec over the past fifty years and some geographers argue that the heartland‐hinterland dimension of the regional economy is being overridden by city‐regions that are integrated into global networks of production and trade. The heartland‐hinterland trends are examined using multifactor partitioning (MFP), an advanced shift‐share methodology, for the period of 2001–2006. This is the first intercensal period in which Canadian business has faced the full impact of the removal of North American tariff protection and the increased globalization of the Canadian economy. The data covers employment by eighteen industry sectors for the seventy‐three economic regions defined by Statistics Canada. MFP measures the region and industry‐mix effects, which are interpreted as in the traditional shift‐share model (though they are derived more accurately) and, in addition, an interaction effect. The results demonstrate that the broad heartland‐hinterland differences in the distribution of population and employment growth are increasing not decreasing and that the hinterland is in fact falling further behind the heartland in employment growth. However the Calgary‐Edmonton corridor and the Lower Mainland of British Columbia are emerging as a western heartland. The population size of cities does affect their rates of employment growth, but so too does their location: the growth of heartland cities is outpacing those in the hinterland. The Appendix provides the equations for two‐variable multifactor partitioning.

The analysis and definition of economic regions at the sub-provincial scale is a neglected policy issue in Canada notwithstanding the severity and persistence of disparities in regional growth. Employment growth in the 30 Economic Regions (ERs) of Western Canada 2001–2006 is partitioned into region and industry-mix effects and the resulting regional typology identified. Western Canada became a single development-region in 1988, a quarter of a century ago, with a single policy focus of diversifying its industry-mix. However, its ERs display great diversity in their economic structure and growth rates and they have experienced both the highest and the lowest employment growth rates in Canada. Regional diversity creates policy quandaries that require development policies crafted to individual regional opportunities and needs in place of the one-size-fits-all approach of Western Economic Diversification Canada.

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