Sober reassessment

Consultant’s population growth estimates return to earth

The future is catching up with the past. For more than a century, the population of Prince Edward County has remained within a range of about 25,000 people. The forces at work are powerful. New folks arrive, but just as many leave. Like the shifting dunes of the sandbanks, individual grains may move around, but the forces keeping them in line endure.

Occasionally, a new generation comes along eager to explain that this-time-is-different. In 2003, Shire Hall was persuaded there would be 36,000 folks living in Prince Edward County by 2010. Seven years later, the population was still 25,000 people.

More recently, another crop of futurists has predicted a population boom that would double the County’s population to 50,000 people.

All this guesswork might otherwise be a fun tavern game—except, in this instance, Shire Hall took the lofty speculation and concluded it had to build a $300 million waterworks system to serve the surging horde. (From 8,044 folks in Picton/Bloomfield/Wellington, it would build waterworks to serve to 47,100).

It was bold. It was exciting. But it was dead wrong—contradicted by history and 150 years of experience. Last week, the consultant’s predictions came back down to earth. Factors, including a changed market outlook, reduced immigration levels, and US protectionist measures, have prompted forecasters to moderate their growth outlook.

Last week, the expert consultancy tasked by the municipality to predict population growth in Prince Edward County downgraded its expectations. Where Watson and Associates once predicted population growth of 1.1 per cent per year, it has now lowered its expectation to 0.8 per cent.

While it may seem a small adjustment, it represents a major drop in expectations for population growth. It is a seismic event for Shire Hall. It shatters the myth of vast population growth upon which dreams of a super-regional water supply in Wellington and a 20-km pipeline to Bloomfield, Base31 and Picton were imagined.

In fairness, Watson never predicted the rate of growth used by Shire Hall to design its grand waterworks scheme. At its most exuberant, Watson only ever predicted new homebuilding to average 155 units per year.

But Watson has now lowered its expectation to an average of 110 new homes per year—a 30 per cent climb down—to a level of new homebuilding that looks a lot like the trend of the past few decades.

Under its most optimistic scenario, Watson now forecasts that more than 177 years will pass before the population arrives in the County to use the capacity of the waterworks expansion Shire Hall has planned. In its low scenario, three and a half centuries will pass before its capacity is reached.

Someone has to pay this $300 million bill in the meantime. If the thousands of new residents for whom the waterworks expansion has been designed don’t arrive for decades—or ever—it will be existing waterworks customers who will pay for it through higher water bills.

Watson, along with Shire Hall’s finance folks, must now reconcile the vast chasm between its spending plans and the prospect of centuries passing before the population arrives to pay this bill.

Watson’s next assignment is to determine who will pay the $300 million cost of waterworks expansion. While developers may ultimately be responsible for much of this cost, existing ratepayers will fund the spending and carry the debt until the homes are built. (Spoiler alert: We’ll all be gone before then.)

Yet, even relying on Watson’s recently downgraded estimates of population growth is problematic, according to some observers who challenge the consultant’s basic assumptions.

Watson now estimates employment will rise about 1.5 per cent per year until 2051— adding approximately 3,500 new jobs over the period. Much of the forecasted growth is expected to be driven by rising population growth and the increase in work-from-home arrangements.

However, commercial development professional Jane Marshall argues that Watson is overlooking the fundamentals of this market— an older population, low unemployment, a lack of educational and training opportunities, and the high cost of housing—fundamentals she says will act as a drag on employment growth in Prince Edward County.

“While assumptions around remote work were realistic post-pandemic, they no longer reflect the current practise and patterns of employers,” explained Marshall, a director of the largest Real Estate Income Trust in Canada.

Watson also points to a development pipeline of about 6,500 residential units in Prince Edward County as a measure of upward pressure. Nevertheless, the consultant concludes new homebuilding will average just 110 new homes per year, suggesting a very long uptake of capacity.

The discrepancy must be reconciled, according to Marshall.

“The development pipeline is clearly not translating into real growth,” said Marshall. “So why are we still planning for an inflated, unrealistic growth target?”

Watson presented its latest forecast scenarios to a select group of builders and developers last Friday—in a meeting closed to the public and the media.

Watson will present at two public consultation sessions later this month, at which time residents and the media will be permitted to participate.