2018-19 Departmental Results Report
Operating context and key risks

Operating context

The Atlantic provinces followed the national economic growth trend in 2018. Following a 1.5% gain in 2017, the Atlantic Canadian economy dipped by 0.2%^[1] in 2018, resulting from a decline in Newfoundland and Labrador’s gross domestic product (GDP) and very slow GDP growth in New Brunswick. Nevertheless, if we disregard the more volatile sectors such as mining, oil and construction, the regional economy grew by 0.8% in 2018, which reflects its capacity for growth given the region’s aging population.

Atlantic exports increased for a second consecutive year in 2018, growing by 10.1% or $3 billion,^[2] a pace of growth that surpasses that of the country as a whole in the same period (7.4%). Although the United States is still Atlantic Canada’s biggest market, the region’s share of exports to the U.S. fell from 78.2% in 2015 to 68.5% in 2018. Meanwhile, the number of goods-exporting businesses in Atlantic Canada continued to rise in 2018, reaching 2,355 firms,^[3] a 4.1% increase compared with 2017.

Due to increased immigration, Atlantic Canada’s population grew at a moderate pace (0.5%)^[4] between July 2017 and July 2018. The Atlantic region welcomed 14,235 permanent residents in 2018, an increase of 21.8% over 2017 levels and above the national rate of growth (12.1%). Prince Edward Island enjoyed some of the strongest demographic growth in the country during this period (1.8%), outstripping the national average of 1.4%. Newfoundland and Labrador was alone in experiencing a population decline (-0.6%) due to a large number of departures.

In 2018, the Atlantic Canada labour market posted good results, with a rising employment level (1%,^[5] or 11,300 jobs). At the same time, the region recorded its lowest unemployment rate (9.2%) in 10 years, though it remains above the national average (5.8%). Despite these good results, the labour participation rate in the Atlantic region in 2018 (61.3%) decreased compared with the rate in 2008 (63.3%), which can be explained in part by retirements and the aging population.

Certain groups still face challenges in fully participating in Atlantic Canada’s labour market. The unemployment rate among people between the ages of 15 and 24 in Atlantic Canada (15.2%) is still higher than the Atlantic average (9.2%), as is the rate for off-reserve Indigenous people (13.9%). The participation rate for Atlantic women (57.8%) also remains lower than that for Atlantic men (65.0%).

As a result of the aging population and a shrinking labour force, businesses in the region are struggling with a critical shortage of labour and skills, which prevent them from both growing their businesses and meeting the needs of their clients.^[6] The average number of job vacancies in the region was slightly more than 26,000^[7] in 2018, an increase of over 4,000 jobs compared with the 2017 average. The average job vacancy rate in Atlantic Canada was 2.7% in 2018, representing an increase compared with the 2017 average of 2.3%.

Innovation remains a key factor to improving productivity levels and staying competitive on world markets. According to a recent Statistics Canada survey,^[8] Atlantic Canada posted the greatest change in terms of the propensity to innovate in the country, rising from 45.8% in 2010–2012 to 69.1% in 2015–2017, an increase of 23.3 percentage points. As a result, the innovation gap between Atlantic Canada and Canada as a whole went from 17.7 percentage points in 2010–2012 to 10.2 percentage points in 2015–2017.

Key risks

During the past year, ACOA’s work continued to be driven by its service to clients, by Government of Canada priorities, and by evolving local and regional economic landscapes. These drivers have given rise to uncertainties that can affect the Agency’s ability to achieve expected results.

The Agency’s strategies to respond to key risks, as well as its management action plans, allowed it to address challenges and capitalize on opportunities by focusing its activities and resources to ensure proper alignment of its mandate with Government of Canada priorities. This was done through strong collaboration and information sharing within the ISED portfolio and with other federal and provincial departments and agencies, and by delivering its programming in a manner that was integrated, strategic and responsive to the circumstances affecting each Atlantic province.

Internally, ACOA continued to align its current structures, processes, programs, and human and financial resources to respond to the number and complexity of priorities, as well as to deliver and report on results in a timely and sustained manner while meeting client expectations. To take advantage of new opportunities, ACOA has established key areas of priorities – including advanced manufacturing, clean growth, food and aquaculture, tourism, skills, Indigenous economic development, oceans, and start-ups – championed by vice-presidents within the Agency who bring together a diverse, multi-skilled team to maximize results.