2021-22 Departmental Plan operating context
Despite a relatively low number of COVID-19 cases in Atlantic Canada, the pandemic affected the regional economy in 2020. Because of the pandemic, 46,100 jobs were lost in the region in 2020, compared to job gains of 16,400 a year earlier. While there are signs that the recovery is under way across Atlantic Canada, sectors such as oil and gas and tourism will see the slowest recovery.
Over the coming years, economic recovery and growth in Atlantic Canada will be driven by a combination of factors:
- the development of emerging and value-added sectors such as oceans, food, mining, clean technology, and information and communication technologies;
- the development of innovative products and services; and
- global economic developments, including greater access to international markets.
As a result, after witnessing a decline in 2020, the Atlantic economy will grow in 2021 and 2022, but that growth is expected to remain below the national level.
Because of the COVID-19 context, which is ever changing, the region’s economy continues to face several risks in the near term that could undermine its ascent back to pre-pandemic levels and growth. A resurgence of the virus in the region could result in economic disruptions, most notably in contact-intensive sectors. Subdued demand for goods across advanced and emerging economies, weaker travel, and diminished business investment capacity will also negatively affect the regional economy in the near term.
The COVID-19 pandemic also had a significant impact on groups typically under-represented in the workforce, such as women and youth. Since the pandemic, the region has also seen a decrease in the arrival of immigrants, resulting in a slowdown in population growth. These challenges, along with changing demographics and a shrinking labour force will have an impact on Atlantic businesses, preventing them from growing and from meeting the needs of their clients. The continued attraction, retention and integration of immigrants, including international students, will be key for Atlantic firms to meet their labour needs over time. An increase in the participation rate of under-represented groups in the labour force, including women, youth, Indigenous peoples and persons with disabilities, would also support Atlantic firms in meeting their labour requirements and support the region’s economic growth.
The above factors also require businesses in Atlantic Canada to become more innovative and adaptable. The adoption of advanced manufacturing and other technologies will be key determinants for increasing the region’s competitiveness, productivity, innovation capacity and economic growth over the long term. Because of the pandemic, many Atlantic businesses are facing financial hurdles that could impede their ability to embrace such changes, with over two fifths unable to take on more debt.Footnote 1
Atlantic Canadian companies have traditionally faced challenges in securing investments in part due to the rural nature of the region, resistance from traditional funding lenders, and the risky nature of some projects. The Atlantic Canada Opportunities Agency’s (ACOA) role is to help these Atlantic Canadian businesses obtain funding and create local job opportunities. However, there are always risks associated with any business investments.
In order to help build a strong, innovative Atlantic economy, ACOA makes investments that help new and growing Atlantic Canadian businesses adopt/adapt/pursue innovative technologies, secure other financing to execute their plans, be globally competitive and find new export markets, for example. While there may be times when a company does not experience the success anticipated by its owners, ACOA takes its obligation seriously in the management of grants and contributions that are business-focused and achieve results for taxpayer dollars.
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