2018-19 Departmental Plan
Operating context and key risks
Operating context
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 2018 and 2019, and below the national level.
Atlantic Canada’s economy continues to face several risks. The region’s economy is small and open. Because of this, international competition from low-cost producers will continue to challenge Atlantic Canada’s manufacturing base and resource industries. Atlantic exporters, however, should continue to benefit from solid growth in the United States and a stable exchange rate, as the Canadian dollar is projected to remain in the US$0.80 range.[1] After rising in 2017, energy prices are expected to remain firm in 2018, assisting exports from the Atlantic region.
A strong housing market in the United States will support 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 in New Brunswick. Major project investment is expected to provide little support for growth in 2018 as many large investment projects are winding down. Fiscal challenges facing provincial governments, especially in Newfoundland and Labrador, will continue to hinder economic growth in the region.
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, including international students, 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 (that is, 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.
Key risks
| Risk | Risk response strategy | Link to department’s Core Responsibility | Link to minister’s mandate letter commitments, or to government-wide and departmental priorities |
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| Economic Context There is a risk that the achievement of results expected from the Agency’s economic development efforts may be affected by external factors that contribute to uncertainties for economic growth in Atlantic Canada. |
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Economic development in Atlantic Canada | Minister’s mandate letter:
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| External Capacity There is a risk that the capacity of partners, communities and clients to identify, develop and successfully implement strategic projects may impact the Agency’s ability to support the Government of Canada priorities in the Atlantic region to the fullest extent. |
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Minister’s mandate letter:
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Economic context – As outlined above under Operating Context, ACOA’s contribution to economic growth in Atlantic Canada is driven in part by a combination of factors within the evolving and complex ecosystem in which it operates. These factors are, notably: the development of emerging and value-added sectors and transformative manufacturing technologies, significant investments in industrial projects, trade agreements (such as the North American Free Trade Agreement and the Comprehensive Economic and Trade Agreement), and global economic developments. These risk drivers form a dynamic ecosystem giving rise to uncertainties that could affect the Agency’s ability to achieve expected results.
External capacity – The external aspect of ACOA’s portfolio management is a core element of program delivery and plays a critical role in ensuring that federal objectives are met. ACOA works closely with SMEs, communities, municipalities, other economic development partners, provincial governments and other federal departments to undertake projects in support of various Government of Canada priorities. The success of ACOA in meeting its mandate relies on its ability to shift how it delivers on its programming and leverage external partners to meet client and Government of Canada expectations – such as the Innovation and Skills Plan, the Atlantic Growth Strategy, and the results agenda.
Being situated in Atlantic Canada, ACOA is well positioned to continuously take the pulse of the region and adjust its response strategy. Over the years, this response strategy has evolved and strengthened. It includes continuing to work closely with businesses and communities in the Atlantic region; nurturing the Atlantic Canada business culture to help businesses grow and reach sustainability and success; advocating the richness of skills, talents and competencies of Atlantic Canadians as well as the region’s unique assets (such as the ocean sector); balancing risk tolerance to meet the current government innovation agenda; and realigning ACOA’s resources and focusing on the flexibility of its programs to respond to new priorities.
[1] Atlantic Provinces Economic Council, Atlantic Canada Economic Outlook 2018: Diverging Prospects, November 2017.
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