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ATL NTIC
V Economic
Update
September 15, 2021
Provincial Overviews
An Economic Update for
Atlantic Canada
The economic recovery continued to progress over
the summer. The removal of the remaining COVID
restrictions will maintain the positive momentum.
The Atlantic Provinces Economic Council is the voice for independent research, insights and ideas vital to
supporting a healthy, inclusive and sustainable Atlantic Canadian economy.
ECONOMIC UPDATE
Quick Summary
> The Atlantic Canadian economy continued to progress
over the summer, with retail spending and housing activity
supporting growth. However, housing is expected to slow in
the second half of this year.
CONTENTS
> International exports of goods from the region have
rebounded to pre-pandemic levels, with gains in energy,
seafood, forestry and mineral exports. Atlantic Overview 2
Newfoundland & Labrador 4
> Overall, the elimination of most COVID-19 restrictions Prince Edward Island 6
should support further recovery in the latter part of 2021, Nova Scotia 8
aided by high vaccination rates. New Brunswick 10
Key Economic Indicators 12
Information in this report is current up to September 10, 2021.
©APEC, 2021. This APEC member report may not be shared or reproduced in whole
or in part in any manner without the written permission of APEC.
1 |ATLΛNTIC Economic Update | September 15, 2021 |
accommodations and restaurants, health care and construction
report difficulties filling positions. Over one-third of Canadian
businesses expect to have difficulty finding skilled employees
over the next three months. At the national level, the recovery
stalled in the second quarter of 2021 as real GDP contracted by
just over 1% as result of lower exports and residential sales.
Atlantic exports in the first half of this year are about 2% above
ATLANTIC OVERVIEW 2019 levels. Energy, seafood, mineral and forestry exports are
experiencing double-digit growth.
The easing of travel restrictions provided the region’s
businesses with room for optimism, as consumers Over the last year, the housing market has been strong.
unleashed some pent-up demand and began travelling However, it is starting to show signs of easing. Maritime home
within the region again. In the first half of 2021, Atlantic resales contracted by 12% in July over the prior year, but they
retail sales were 13% above 2019 levels. The elimination of remained robust in Newfoundland and Labrador. Atlantic
most COVID-19 restrictions should support further recovery housing starts rose by 47% in the first half of 2021 over the prior
in the latter part of 2021. year, but urban starts declined by 22% in July.
Labour Shortages Remain an On-Going Issue
Overall monthly employment in the first seven months of Businesses that identify shortage of labour as an obstacle, third quarter 2021 (%)
2021 is averaging close to or slightly above 2019 levels in
the Maritime provinces, but is well below, at about 4% in
Newfoundland and Labrador. However, employment in
some industries remains lower than pre-pandemic levels.
Accommodations and restaurants and cultural industries
have yet to recover.
/ The easing of travel restrictions provides the region’s
businesses with room for optimism, but labour shortages
may limit the recovery.
The pace of the economic recovery risks being held back by
labour shortages. Atlantic operations in industries such as Source: Statistics Canada
/\ HIGHLIGHT: Atlantic housing starts rose 47% in the first half of 2021.
2 |ATLΛNTIC Economic Update | September 15, 2021 | By: Fred Bergman |
While tourism is benefitting from opening up domestic Many small businesses have taken on more debt as a result of
borders, the sector is struggling. For example, room nights sold the pandemic. The extension of the Canada Emergency Wage
in New Brunswick in the second quarter of 2021 were 44% of Subsidy, the Canada Emergency Rent Subsidy and Lockdown
2019 levels. International travelers are also now allowed. Since Support until October 23 will help sectors struggling to return
August 9th, fully-vaccinated Americans can enter Canada for to normal.
discretionary travel and since September 7th, other foreign
nationals were allowed to do the same. The national household savings rate was 14% in the second
quarter and has been in double-digits for the last five quarters.
Visits to retail and recreation sites are recovering from Returning savings to normal could unleash $150 billion in
pandemic lows. They were up by about 38% in PEI and 15-22% spending, which is equivalent to 7% of real GDP. Household
in the rest of the region, as compared to pre-pandemic levels, spending was flat in the second quarter.
according to Google’s Community Mobility Reports.
/ About 80% of eligible Atlantic Canadians are fully Atlantic Retail and Recreation Activity on the Rebound
vaccinated and most restrictions should be removed by Mobility change versus baseline*, retail and recreation (%)
early-October.
Fully-Vaccinated Coverage, as of September 14, 2021
Fully-Vaccinated Rate*
Province Final Reopening Phase Date
(%)
NL 80 Sept. 15 (Step 3)
PE 83 Sept. 12 (Step 5)
NS 81 Oct. 4 (Phase 5)
NB 77 July 31 (Green phase)
% of eligible population Source: COVID-19 Tracker Canada
Forecast
Business costs are rising. The price of Canadian industrial goods
is up 12% in the first seven months of 2021, with raw material *The September 8, 2021 data is compared to the baseline day,
which is the median value from the 5-week period Jan 3 – Feb 6, 2020
prices 32% higher. Almost 40% of Canadian companies expect Source: Google Community Mobility Reports
rising input costs to be an obstacle over the next three months.
/\ HIGHLIGHT: Atlantic retail and recreation visits 20% higher than pre-pandemic.
3 |ATLΛNTIC Economic Update | September 15, 2021 |
Employment is still about 1.3%, or 3,000 jobs, below where it
NEWFOUNDLAND & LABRADOR stood prior to the pandemic. The larger concern is the longer-
Quick Summary
term loss in employment and population, which has been
happening for several years. Immigration remains slow in the
first half of 2021, down nearly 40% from 2019 levels. Net
interprovincial migration was positive for the first time since
> Employment remains about 3,000 below pre- 2016, which helped slow the declining population.
pandemic levels while the population continues to
decline. Employment in several sectors continues to struggle including
accommodations and food, transportation, primary industries
> Exports have improved significantly in 2021, due to a and construction. However, there are a few industries that
rebound in activity and stronger commodity prices. have grown since the start of the pandemic. Professional
services (including IT related fields), manufacturing, health
> Recent announcements by Suncor and Cenovus and public administration employment have expanded.
have provided a much needed boost to the Public sector employment is up about 12,000 since February
province’s offshore oil sector. 2020 while there have been losses of nearly 14,000 in the
private sector.
Retail sales have recovered and are up nearly 15% in 2021
compared to 2020 but the rebound is below that in most
other provinces. June 2021 retail sales were down 2% over
the previous year, the only decline in the country.
4 |ATLΛNTIC Economic Update | September 15, 2021 | By: Patrick Brannon |
The strongest retail growth areas over the first half of the year The province agreed to provide $205 million to the project
were motor vehicle sales, furniture and clothing stores. All partners to help support their decision. The project extension
three were hit hard during the early stages of the pandemic. will also see ownership of the project shift, with Suncor,
Year-over-year gains in retail sales are likely to soften over the Cenovus and Murphy Oil taking on larger shares and
next few months as several sectors bounced back strongly last ExxonMobil, Equinor and other partners bowing out. The main
summer, especially autos. drilling unit will see some work completed in the province
before going to Spain for an overhaul. Oil production is
Housing starts were up strongly in the first seven months but expected to resume in late 2022.
prices are down in the province compared to strong gains in
most of the country. Starts are up 72% in urban areas and up Cenovus is expected to make a decision on restarting the West
nearly five-fold in rural areas of the province. White Rose extension by mid-2022 with construction
potentially restarting in 2023. Suncor increased its share of
Exports are up $2.4 billion over the first seven months of the the project from 27.5% to 40% with Cenovus owning the rest.
year. Stronger commodity prices have helped boost oil, iron The expansion would add 200 million barrels to White Rose
ore and nickel exports from the province. The fishery has also field production.
experienced strong growth this year led by crab exports which
have more than doubled over the first seven months. Newfoundland Exports Rebounding in 2021
Change in international export value ($millions)
In July, the federal government agreed in principle to provide
$5.2 billion to the province to help lower the cost of financing
the Muskrat Falls hydro project. The agreement will see the
federal government provide $3.2 billion in transfers from the
money it makes from its investment in the Hibernia project
and $2 billion in loan guarantees. The funding will help
subsidize power rates that were set to increase considerably in
the coming years due to cost overruns at the hydro project.
Industry Developments
Suncor announced in September that it was going ahead with
a plan to extend the life of the Terra Nova oil field by10 years. Source: Trade Data Online
5 |ATLΛNTIC Economic Update | September 15, 2021 |
Employment in Prince Edward Island has stalled in recent
PRINCE EDWARD ISLAND months as several industries continue to struggle to get back
to pre-pandemic levels. Most of the gains in the first eight
Quick Summary months of the year have been in the public sector and the
fishery. The accommodations/food and construction
industries remain well below last year.
> The recovery in employment in Prince Edward Island About 2,800 new jobs are needed to get back to pre-pandemic
has stalled in recent months. About 2,800 jobs are levels. However, employment was growing strongly before
needed to get back to pre-pandemic levels. the pandemic. To catch up to the pre-pandemic trend about
6,000 new jobs are needed.
> Rising home prices and other inflationary pressures
will squeeze affordability as wage growth has been Consumer prices have increased 4% in PEI in 2021, the largest
weak. increase in the country and well above wage gains. The higher
rate of inflation is being driven by rising costs for shelter,
> A reopening of travel will help the tourism industry gasoline and food.
but labour challenges are holding back the rebound.
Island house prices continue to rise sharply with the average
resale price up 34% in July compared with last year, according
to CREA. However, this should ease in 2022 as population
growth has slowed and inventory on the market is expected to
pick up. CREA expects house prices in PEI to see only 3%
growth in 2022.
6 |ATLΛNTIC Economic Update | September 15, 2021 | By: Patrick Brannon |
Wage gains remain weak in PEI, up less than 1% this year The bioscience sector has continued to grow in PEI during
compared to 5% nationally. With house prices and inflation high the pandemic. The PEI BioAlliance estimates that revenues
this will make it more difficult for some Islanders to live increased from $263 million in 2019 to $364 million last
affordably. year. Capital spending and external investment also
increased. BioVectra, Elanco, Dosecann, and Centre for
Retail sales are up 27% over the first half of the year, leading the Aquaculture Technologies all invested in new equipment
country in growth. Auto, furniture and building material sales had and facilities in the past year. PEI BioAlliance is opening a
gains of over 40%. The latter two driven by increased home sales $7 million biomanufacturing incubator.
and renovations.
Bioscience employment grew by over 200 between March
Fish exports have bounced back strongly in 2021 especially 2020 and March 2021 and is expected to increase further
lobsters and crab. Aerospace exports continue to struggle but with Island Abbey Foods announcing a 30,000 sq. ft.
should improve as borders reopen and airline activity picks up. expansion in August. That project will add 40-50 jobs. PEI-
based Natural Products Canada received $20 million from
Industry Developments
the federal government to support 500 Canadian companies
Tourism is expected to have a partial rebound in PEI this year. developing natural products and technologies to tackle
The early part of the season was impacted by closed borders. major issues such as climate change, food production, and
With the reopening to Atlantic travel in June and the rest of animal and human health and nutrition.
Canada on July 18th, tourism activity has picked up.
PEI Employment Growth Has Stalled
Employment, Prince Edward Island (thousands)
However, several tourism operators are struggling to find labour.
Many workers have left the industry and others are unwilling to
return due to the uncertainty of employment. In addition, the
usual level of international students and workers supporting
summer employment is down.
Tourism operators have had to scale back their reopening plans
due to the labour challenges. The industry should continue to
rebound in 2022 as international travel and cruise traffic start to
return.
Source: Statistics Canada
7 |ATLΛNTIC Economic Update | September 15, 2021 |Nova Scotia’s economic recovery gained momentum in the
summer of 2021. Consumers led the way in June, along with
NOVA SCOTIA
strong housing demand. The province had a modest
Quick Summary employment gain and over 72% of the population was fully
vaccinated in September. The removal of the remaining COVID
restrictions should help maintain economic momentum,
although housing demand should soften.
> Nova Scotia’s economic recovery gained momentum in
the summer of 2021. Employment in the first half of 2021 is almost back to pre-
pandemic levels, but weakness remains in manufacturing and
> Retail spending rose in the first half of 2021 by 12% tourism, including accommodations and food service, culture
above 2019 levels. The re-opening of the economy through and recreation and retail.
the summer should lead to faster growth in spending on
travel, restaurants, entertainment and personal services. Retail sales increased by 16% in June over the prior month, as
the province moved to Phase 2 in mid-June. Retail spending
> A 50% reduction in provincial corporate income tax is rose 12% above 2019 levels in the first half of 2021. Building
expected to cost about $140 million, which is equivalent to supplies, department and grocery stores and autos accounted
about 1% of private sector wages. for most of the gains. The re-opening of the economy in the
summer should lead to faster growth in spending on travel,
restaurants, entertainment and personal services. Growth in
retail sales, including home renovations, may slow. Preliminary
estimates for national retail trade in July predict a decline.
8 |ATLΛNTIC Economic Update | September 15, 2021 | By: Fred Bergman |Nova Scotia’s exports in the first half of 2021 are almost Fiscal Plan
approaching levels in the comparable period in 2019.
The new Conservative government’s election platform included
Exports to the US increased by almost one-quarter year-
$553 million in new spending commitments in year one. This
over-year, with strong gains in live lobster, tires and lumber.
could raise the deficit to $1 billion, but only if spending ramps up
Lobster prices surpassed $13 per pound this spring and
quickly. Their plan is to return to balance within six years.
summer. Softening lumber prices will result in lower lumber
exports in the second half of 2021.
A 50% reduction in provincial corporate income tax to fund the
Housing Market Developments hiring of new employees or paying existing staff higher wages
and bonuses is expected to cost about $140 million, which is
The Halifax housing market has been hot so far this year.
equivalent to about 1% of private sector wages.
The Nova Scotia Association of Realtors’ latest report shows
existing home sales in Halifax rose by one-quarter in the
Non-residents will pay a special deed transfer tax on property
first seven months of 2021, while resale prices are up 30%.
purchased, as well as an additional levy on property tax. These
According to the Nova Scotia Affordable Housing
two measures will generate about $150 million in tax revenue.
Commission’s report, the number of new households in
Halifax has been outpacing new housing development over Nova Scotia Deficit May Almost Double
the last five years. Fiscal balance, Nova Scotia ($ millions)
To increase the supply of affordable housing in the
province, the Commission recommends offering a HST
rebate on new housing construction and amending
municipal legislation (including Halifax’s Charter) to allow
municipalities to eliminate or minimize taxes and fees on
affordable housing.
The new provincial government platform includes directing
Nova Scotia Lands to work with Housing Nova Scotia to
identify land suitable for development, which could be sold
or leased on the condition that a certain portion be used for
Source: Nova Scotia Budget and Public Accounts,
affordable housing development. Progressive Conservative Party of Nova Scotia Platform
9 |ATLΛNTIC Economic Update | September 15, 2021 |NEW BRUNSWICK New Brunswick’s economic recovery is buoyed by strong
housing, manufacturing and export activity. Retail sales fell in
Quick Summary June compared to the prior month, despite the start of the
provincial reopening plan.
Overall, employment continues to be close to pre-pandemic
> New Brunswick’s economic recovery is buoyed by strong levels, but weakness remains in construction, manufacturing,
housing, manufacturing and export activity. Retail sales fell business services and tourism jobs. Employment in culture and
in June compared to the prior month, despite the start of recreation is 19% below pre-pandemic levels.
the provincial reopening plan.
The housing market is expected to slow from its recent fast
> The housing market is expected to slow from its recent pace. Housing starts were up 60% in the first half of the year
fast pace. Housing starts were up 60% in the first half of the with new construction in urban and rural areas. Existing homes
year with new construction in urban and rural areas. sales rose about 40% up to July, while average prices increased
by one-quarter.
> WorkSafeNB will lower the average assessment rate by
22% to $1.69 per $100 of assessed payroll in 2022, making Retail spending rose 14% in the first half of 2021 over pre-
the province’s firms more competitive. COVID-19 levels. However, sales may be slowing and retreated
2% in June. Despite overall strength in the first half of this year,
there were lower retail sales volumes in grocery stores in June
compared to the same month in the prior year.
10 |ATLΛNTIC Economic Update | September 15, 2021 | By: Fred Bergman |New Brunswick manufacturing sales logged the fastest growth Regional Developments
in the nation in June. In the first half of 2021, they were 18%
Saint John existing home sales increased by 42% in the first
above pre-pandemic levels. The province’s exports are also up
seven months of 2021 over the prior year, while average resale
16% in the first half of 2021 over 2019 levels. Energy led the
prices rose 31% over the same period. Housing starts in the
way, but forest product and seafood exports were also robust.
port city are up 3.5% so far in 2021. In the first half of 2021, new
High oil and lumber prices have boosted revenues, but lumber
housing prices in Saint John rose 5%.
prices have retreated over the last three months.
Industry Developments Home ownership costs account for about one-quarter of pre-
tax income in Saint John, suggesting it is affordable for those
WorkSafeNB will lower the average assessment rate by 22% to looking to move there from other parts of Canada. However,
$1.69 per $100 of assessed payroll in 2022. The pandemic’s low-income families can still struggle to find suitable housing.
heightened focus on safety helped improve workplace safety The city launched an affordable housing project with key
results, but there was also a reduction in economic activity.
partners. They will conduct a housing needs assessment and
Legislative changes by the provincial government allowed implement a Saint John Affordable Housing Action Plan.
WorkSafeNB to strengthen its financial position.
New Brunswick’s Assessment Rates More Competitive
Provisional average workers compensation assessment rates, by province
Irving Oil and TC Energy signed a memorandum of
($ per $100 of assessed payroll)
understanding to explore development of energy projects to
reduce greenhouse gas emissions, which could support clean
growth in the region.
The proposed energy projects include the production and
distribution of hydrogen, and carbon capture and
sequestration. These projects have the potential to help the
province achieve its emission reduction targets. Under the
province’s output-based pricing system, large industrial
emitters are required to reduce their greenhouse gas
emissions intensity by 10% by 2030.
Source: WorkSafe NB, Association of Workers’ Compensation Boards of Canada
11 |ATLΛNTIC Economic Update | September 15, 2021 |Key Economic Indicators
Employment in Most Provinces Nearing Full Recovery High Vaccination Rates Should Reduce Risk of Future
Change in total employment relative to 2019 monthly value (%) Shutdowns
Change in total employment (Index: 2019 monthly value =100)
Source: Statistics Canada
Source: Statistics Canada
Hours Worked Catching Up with Employment Recovery Retail Spending Remains Above Pre-Pandemic Levels
Change in total hours worked relative to 2019 monthly value (%) Change in total retail sales relative to 2019 monthly value (%)
Source: Statistics Canada Source: Statistics Canada
12 |ATLΛNTIC Economic Update | September 15, 2021 |Key Economic Indicators
Atlantic Exports Back to Pre-Pandemic Levels High Mineral Prices Boost NL Non-Energy Exports
Change in total exports year-to-date (Index: prior year = 100) Change in non-energy exports (Index: YTD prior year = 100)
Source: Trade Data Online Source: Trade Data Online
Housing Starts Jumped in Early 2021 But Starting to Slow Solid Growth in Urban Housing Starts
Change in total housing starts (Index: YTD prior year = 100) Change in urban housing starts (Index: YTD prior year = 100)
Source: Statistics Canada Source: Statistics Canada
13 |ATLΛNTIC Economic Update | September 15, 2021 |You can also read
