 | | Marie-Christine Bernard
Associate Director
Provincial Economic Trends |
While the global recession has severely shaken many provinces -- the booming good times have come to an end precipitously for Alberta and British Columbia alongside the free fall in commodity prices – the sun is still shining on Atlantic Canada. In fact, the Atlantic region will manage to avoid recession. It’s true that certain industries like forestry or fishing are hurting and have yet to hit bottom, but in general the Atlantic region is in good health.
What is behind Atlantic Canada’s resiliency to recession? First and foremost, the job market remains intact. Nova Scotia is one of only two provinces with any job growth so far this year. In fact, several companies in that province are taking advantage of the massive layoffs in other parts of the country and south of the border to grab top talented job seekers to pursue expansion plans. For example, while many sectors had to downsize, Nova Scotia’s financial services sector is growing and competing with other well established global financial jurisdictions.
According to the Canadian Federation of Independent Business, businesses in New Brunswick and Newfoundland and Labrador are among the most optimistic in the country. The aerospace, the defence maintenance and computer systems and software industries are fast expanding in the Atlantic region. It’s not just about call centres anymore. With more favourable labour prospects for high-paying positions, Atlantic provinces are rapidly turning into a preferred destination to migrate. The Western provinces don’t have the same pull right now, and the Atlantic region can expect to see positive net-interprovincial migration this year – something that has not happened in more than two decades!
The strength in the domestic economy is another factor that is supporting a stronger outlook in the Atlantic provinces. Boosted by investment plans in the offshore energy industry, Nova Scotia and Newfoundland and Labrador have the best prospects in the country for non-residential investment this year. In addition, the drop in retail sales in Atlantic Canada is nothing compared to the rest of Canada. But what is really worth mentioning is the housing market. The changing migration tide has prevented a crash in the housing market. Housing starts in Atlantic Canada have barely retreated and housing prices continue to move higher, a major contrast to the 40 per cent plunge in housing starts in the rest of the country.
The Atlantic region has not experienced a boom-bust cycle like Alberta or British Columbia in the short term, but will the economy remain upbeat going forward, even as the Western provinces bounce back starting in 2010? Will workers once again leave the region in droves? We say, absolutely not! The next five to ten years should bring a host of growth and job opportunities for all of the Atlantic provinces. Prince Edward Island is forecast to become an Atlantic retirement destination for former residents that are golf-lovers. A myriad of already-announced energy projects (a new $8-billion Irving gasoline refinery, the Lower Churchill hydro project, development of tidal energy system and new wind-generated electricity capacity) will keep the economic momentum going for the foreseeable future. The migration flows should continue to favour the Atlantic region until at least the middle of next decade.
In short, there are many reasons why the sun will continue to shine on the Atlantic coast.