As the global economy begins to recover from the recession, Canada's Atlantic provinces - Nova Scotia, Prince Edward Island, New Brunswick, and Newfoundland and Labrador - appear to have weathered the recession better than other parts of the country.
"Atlantic Canada can definitely look forward to positive economic momentum in 2010," says Craig Wright, senior vice-president and chief economist for RBC Economics, the research arm of Royal Bank of Canada in Toronto.
Federal stimulus funds, an increase in global demand for Atlantic Canada exports, and a recovery in consumer and business confidence are driving economic growth. According to the Atlantic Provinces Economic Council (APEC), monthly retail spending in Atlantic Canada is currently 1.7 percent higher than it was prior to the recession. Public-sector construction investment is expected to increase by 15 percent as infrastructure stimulus projects get underway. And overall employment in Atlantic Canada remains only slightly below pre-recession levels.
Even with these positive indicators, exports still lag about 30 percent behind pre-recession levels. The higher value of the Canadian dollar is also dampening the improving American demand for Atlantic exports. The federal government, provincial governments, and the Atlantic Canada Opportunities Agency (ACOA) continue to develop the Atlantic Gateway Initiative, which will increase export trade with Europe, China, and India. The program will improve transportation infrastructure and utilize untapped shipping capacity to handle increased traffic volumes. Atlantic Canada's advantages include year-round, ice-free deepwater ports that can accommodate large post-Panamax ships, shorter transit times, and secure and reliable intermodal transportation networks to U.S. markets.
High-tech investment continues to be nurtured by APEC's Atlantic Innovation Fund (AIF). Launched in 2001, the AIF supports the development of a knowledge-based economy by enhancing new ideas, technologies, products, and markets. Nearly $650 million has been invested in more than $1.4 billion worth of projects. The AIF also supports innovative research partnerships that leverage the skills and resources of private-sector companies, universities, research institutions, and other organizations in Atlantic Canada. It recently committed $63 million to support high-tech projects in Atlantic Canada this year.
"We continue to encourage Atlantic Canadian entrepreneurs and researchers to undertake world-class, leading-edge research that will help drive the region's long-term economic growth and development," says Keith Ashfield, minister of ACOA and the Atlantic Gateway. "The Atlantic Innovation Fund has been instrumental in helping Atlantic Canadian businesses and research institutions collaborate on ideas and commercialize new products and services."
Traditional, natural resources-based industries anchor Atlantic Canada's economy. Most of the region's mining and offshore oil and gas production is located in Newfoundland and Labrador. Increased production from existing and new fields will continue for at least another decade. Atlantic Canada is also recognized globally for its expertise in ocean science, cold-water engineering, and geophysical surveying. Leading universities and research institutions are conducting advanced research and development into next-generation wind, biomass, geothermal, tidal, solar, and hydro energy generation.
Building on these strengths, Atlantic Canada continues to diversify into knowledge-based, high-growth industries such as bioscience, information and communications technology (ICT), aerospace, and defense. Emerging bioscience clusters are conducting world-class research in marine science, agri-food, and aquaculture. Both federal and provincial governments are providing industry incentives and assisting in the development of new bioscience research platforms.
"Atlantic Canada's information and communication technologies industry is an increasingly important part of the region's economy," says David Chaundy, senior economist at APEC. The region's ICT industry grew nearly twice as fast as the overall economy between 2003 and 2008, boosting its share of the region's GDP from 2.5 percent in 1997 to 3.7 percent in 2008, and contributing approximately $2.65 billion to Atlantic Canada's GDP in 2008. More than 2,000 ICT firms operate in the four provinces, with prosperous clusters in Atlantic Canada's six largest cities, including New Brunswick's Fredericton and Moncton, which the New York City-based think tank Intelligent Community Forum named as two of the most "intelligent" cities in the world last year.
More than 200 aerospace, defense, space, marine, and security companies comprise Atlantic Canada's growing aerospace and defense industry and employ about 10,000 workers. Aerospace-related exports nearly doubled between 2001 and 2008 to $1 billion annually. Advanced fields of research include cyber-security, intelligence, surveillance, reconnaissance, remotely piloted vehicles, and data fusion. The Atlantic provinces support aerospace and defense as a growth sector through industry incentives, specialized training, and creative research partnerships.