2017-18 Departmental Plan
Operating context: conditions affecting our work

Over the long term, economic growth in Atlantic Canada will be driven by a combination of factors: the development of emerging and value-added sectors; significant investments in industrial projects; and global economic developments, including greater access to international markets and innovation. Growth in real gross domestic product (GDP) in the region, however, is expected to remain modest in 2017 and 2018, and below the national level.

Atlantic Canada’s economy continues to face several risks. As a small, open economy, international competition from low-cost producers will continue to challenge Atlantic Canada’s manufacturing base and resource industries. Atlantic exporters, however, should benefit from stronger growth in the United States and a stable exchange rate as the Canadian dollar is projected to remain in the US$0.75 to $0.80 range.[1] Energy prices are also expected to improve somewhat in 2017, helping lift exports from the Atlantic region in the short term. A stronger housing market in the United States will support further growth opportunities for the region’s forestry sector, but the lack of a softwood lumber agreement between Canada and the United States poses a risk to lumber producers.

Lower commodity prices could create challenges for investment projects in the region. Major project investment is expected to provide little support for growth in 2017 and 2018, as many large investment projects are winding down. The stable Canadian dollar, however, is expected to help the region’s manufacturers, increasing demand for their products. The manufacturing sector is also projected to get a boost from the rise in shipbuilding activity, as 2016 was the first full year of activity for the National Shipbuilding Strategy.

An aging population will also have an impact on the region’s labour force, limiting Atlantic firms’ access to an adequate workforce. An increase in the participation rate of under-represented groups in the labour force, such as women, youth, Indigenous peoples, and persons with disabilities, will be key for the region’s firms to meet their labour needs over time. The attraction, retention and integration of immigrants, and speedier recognition of their foreign credentials, would also support Atlantic firms in meeting their labour requirements.

Atlantic Canada continues to experience skills shortages in knowledge-based professions (i.e. science, technology, engineering and math), as well as in various trades (affecting major projects such as shipbuilding). Over the past few years, some seasonal industries that rely on a lower skilled workforce have increased their reliance on foreign employees, due to an insufficient workforce to meet their labour needs in the largely rural communities where they are located. Access to both skilled and unskilled labour will be a key determinant for increasing the region’s competitiveness, productivity, innovation capacity, and economic growth over the long term.

[1] Atlantic Provinces Economic Council, Atlantic Canada Economic Outlook 2017: (S)lower for Longer and the Growing Atlantic Divide, October 30, 2016.

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