Atlantic Canada at a Crossroads: Can we Maximize on Generational Opportunity?
Patrick Brannon is a senior researcher with the Atlantic Provinces Economic Council.
The Atlantic region is amid a period of exceptional growth. But we might not be ready to maximize and sustain this opportunity.
The Atlantic Provinces Economic Council (APEC) is wrapping up its annual Major Project Inventory, the capital investment forecast for Atlantic Canada. All four provinces in the region had strong growth in spending on major projects in 2022 and that growth continues into 2023. Spending is expected to approach $15 billion this year, which is $3 billion higher than the pre-pandemic level in 2019.
In fact, spending in 2023 is forecast to exceed the previous record in 2015 when major project activity was booming in Newfoundland and Labrador. This time investments are more evenly distributed around the region.
Much of this investment growth is due to our expanding population. Immigration and positive net migration from other provinces added more than 120,000 to our population over the last two years. Employment is rising and more opportunities are emerging. Most of the new migrants to the region are younger. The average age of Atlantic Canada’s population declined in 2022 for the first time since the baby boom. This shift is crucial given the net losses of our young people to Alberta and Ontario over the last several decades.
Spending on large housing developments in Atlantic Canada is expected to be nearly $900 million higher in 2023 compared to 2019. Infrastructure to support the growing population is also rising rapidly, especially in our cities. Our growing and older population is leading to higher investment in health care, which has doubled since 2019 to $1.1 billion this year. Spending on transportation, including our roads, transit systems, and ports, is $650 million above 2019 levels.
Over the last few years, Atlantic Canada has become a place to call home for other Canadians and families from around the world. However, are we ready for population growth to continue?
Many project proponents we surveyed are having considerable difficulty finding sufficient labour. Other challenges that are largely outside of our control and further delaying projects include rising prices for materials, higher interest rates, and ongoing supply chain shortages. Developments are taking much longer to complete at a time when we desperately need new housing and improved health care.
We also have a tremendous opportunity for economic growth on our path to net-zero emissions. New hydrogen projects are planned around the region and other renewable energy developments are being advanced. Critical mineral mining projects are being accelerated to help Canada reduce its dependence on China for ores that are key to net-zero goals. This includes nickel, cobalt, and others that are used in electric vehicle batteries, solar panels, and wind turbines. Newfoundland and Labrador offshore oil projects may play an important role as we transition to a net-zero future, creating another surge in investment.
Clean hydrogen projects could lead to hundreds of wind turbines built onshore and offshore along with hydrogen and ammonia conversion facilities. The completion of these projects could be impeded by labour availability but also by global supply chain issues. We import most of the major components and wind power demand is growing around the world.
We have a record level of planned major project investment in 2023, which could grow further over the next two to three years. This is in danger of not happening due to the lack of workers to complete the projects. Labour availability must improve in construction trades but also in emerging occupations to support the transition to net-zero.
We have to leverage all potential solutions for labour, including speeding up immigration, addressing structural issues impeding participation among underrepresented groups, increasing the adoption of automation technologies, and strengthening labour market coordination.
Governments must work with post-secondary institutions and industry partners to adjust curricular and training models to ensure the region can produce a high-quality pool of workers. Partnerships between provinces, industries, companies, and Indigenous communities will be key to maximizing this opportunity.
We have a once-in-a-generation opportunity for sustained higher rates of growth in Atlantic Canada. We must build affordable housing and have accessible quality health care. If not, we will once again start to lose people, especially our new young people, to other parts of Canada.
At APEC’s Building Atlantic Canada events this year, we will discuss the key major projects, the opportunities they can bring, and the challenges we must overcome for their success. These events take place on June 6 in Halifax, June 13 in St. John’s, and June 15 in Dieppe. We hope to see you there to continue this important conversation.
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