The Atlantic Momentum Newsletter: A big budget win, some big blades and many happy fish

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PPF: Atlantic Momentum Newsletter

PPF’s Atlantic Canada Momentum Index offers proof that the region is on the upswing, outpacing the rest of the country in several key economic indicators. Each week, this newsletter looks at factors either driving or impeding that momentum. Here’s everything you need to know:

A badly-needed backstop

With most of the attention following last week’s federal budget focused on changes to the capital gains tax, it was possible to miss one of its most significant measures — the Indigenous Loan Guarantee Program. The federal government will commit up to $5 billion to loan guarantees that will allow First Nations to take equity stakes in natural resource and energy projects. The program will be “sector agnostic,” which means oil and gas projects will be eligible.

On the Public Policy Forum’s WONK podcast last week, Mark Podlasly, Chief Sustainability Officer at the First Nations Major Projects Coalition (FNMPC), explained that access to capital has long been a problem for First Nations. They have territorial rights but typically no hard assets to secure financing for projects on their land. As a result, they’ve faced either higher interest rates or even an outright inability to borrow, leaving them with no meaningful way to participate or take an ownership interest in a project even if they wanted to. The new program will see the federal government act as a backstop for such loans, which will bring rates down and open up opportunity.

“What you’re going to see is Indigenous people starting to become solid participants in the economic prosperity of the country in a way that hasn’t happened in the past,” said Podlasly. “You are going to see Indigenous businesses, Indigenous values, Indigenous priorities starting to influence how these projects are done in the country, on our lands.” The result will be a kind of Indigenous wealth creation that can be invested in First Nations communities and “improve the wellbeing of Indigenous peoples far more than government programs have.”

As Indigenous leaders JP Gladu and Sharleen Gale put it recently, “This is about economic reconciliation, but it’s also about shared prosperity.” The FNMPC sees well more than $500 billion in potential First Nations investment in major projects, which makes the $5-billion program a rather modest beginning. But it’s a start and should help spur investment, including in the critical minerals sector so important to Canada’s energy transition. “We’re starting to see an alignment between all parties — investors, government, proponents and First Nations in order to make this happen,” said Podlasly.

Atlantic Canada has already begun. The best-known example of Indigenous ownership is probably the 2021 deal that saw a consortium of Mi’kmaq First Nations take a 50 percent stake in the giant Clearwater Seafoods Inc. with the help of the First Nations Finance Authority. But that’s just one of many examples. In New Brunswick, the North Shore Mi’kmaq Tribal Council and its seven First Nations have  with Moltex Energy Canada and ARC Clean Technology Canada to develop nuclear technology. Late last year, the Millbrook First Nation announced it was taking an equity stake in a $100-million inland shipping terminal planned for Onslow Nova Scotia, and in February a corporation co-owned by 13 Mi’kmaq communities announced it was investing in the region’s biggest battery storage project with the help of an $18-million loan from the Canada Infrastructure Bank.

LISTEN: On the podcast WONK, Mark Podlasly on the really big news hidden in Budget 2024

The shipping news

Evidence of Atlantic Canada’s green energy transition could be seen last week when the Sea Installer, a Belgian-owned ship carrying wind turbine blades, tied up in Sydney Harbour. Alas, the turbines are bound for an offshore wind project in U.S. waters, but their presence in Nova Scotia shows the spin-off opportunities available as the industry develops.

The ship was using a “marshalling yard” — 40 hectares of land with a 500-metre pier — that handled coal and heavy equipment for the steel industry for decades. The facility can offload and store turbines and the huge steel monopiles that anchor them to the seabed, before they are shipped on to be installed.

“It’s definitely a change in priorities,” said Jimmy Graham, general manager of Atlantic Canada Bulk Terminal, which owns and operates the yard. “It’s absolutely a new chapter.” The Port of Argentia in Newfoundland and Labrador provides similar services, and across the harbour in Sydney, Novaporte has at least temporarily shelved plans to build a container terminal and struck a deal with a Danish company to develop a marshalling yard.

Meanwhile, other ports have seen declines of late. Cargo volumes handled at the Port of Halifax were down 9.2 percent last year from 2022, to 546,163 TEUs (or twenty-foot equivalent units, the measure of container ports). That’s the worst performance since the pandemic year of 2020. Global trade has slowed in general and imports from Asia to North America have been particularly hit as consumers dial back in the face of higher inflation. Almost every port on the East Coast of North America saw declines. New York and Montreal saw volumes drop 17.7 percent and 10 percent respectively.

The number of megaships handled by the port more than doubled, however, from 17 to 45. Singapore-based PSA Halifax, the terminal’s operator, has spent more than $100 million since 2019 on infrastructure upgrades. Last fall it installed two massive cranes to allow its South End terminal to handle the world’s largest ships.

Trade protection

New Brunswick and Nova Scotia have signed a deal governing how they will work together to protect the Chignecto Isthmus, the strip of land that connects the two provinces and is under threat from the rising sea levels and severe storms that come along with global warming.

About $35 billion in trade passes through the isthmus every day, along highways, rail lines and fibre optic cables. The dikes that protect the corridor need to be raised and reinforcing steel walls installed in some areas. The agreement creates a steering committee to oversee the work, and covers everything from hiring a project manager to First Nations consultations to communications about the project.

It does not, alas, sort out the financing. The federal government offered to cover half the initial estimate of $400 million from its Disaster Mitigation and Adaptation Fund. The provinces say the revised cost now stands at $650 million and the federal government should cover it all. Last summer, they asked the Nova Scotia Court of Appeal to rule on whether infrastructure protecting interprovincial trade, transportation and communication across the isthmus is the sole responsibility of the federal government. A ruling had been expected within months, but has yet to emerge. The provinces say they can’t wait to start work, so are proceeding in tandem with the court challenge.

Back on the water

Newfoundland’s snow crab fishers are back at work after reaching a late-night deal last week with the province’s Association of Seafood Producers (ASP) to raise prices for their catch. The harvesters had been annoyed with the $2.60 per pound price set by the provincially appointed Standing Fish Price Setting Panel and left their boats tied up when the season started on April 6. (A similar strike last year lasted six weeks.)

The new deal features a floor price of $3 per pound, with the promise of an independent review at the end of the season that could mean additional settlement payments if the market price goes above US$6.50. The Fish, Food and Allied Workers union, which represents the harvesters, called the deal “historic” because it allows harvesters to share in the upside and capture the benefits of rising prices no matter when they haul in their catch. The ASP expressed relief that the season finally got underway. With 5,000 workers, ASP fish plants constitute the largest private sector employer in the province, said executive director Jeff Loder. “It’s the lifeblood of rural Newfoundland.”

The union said it hoped the deal would set a precedent for next season. “It’s a great first step towards a fishery that has more stability and a more balanced share between harvesters and processors,” said FFAW-Unifor president Greg Pretty. It does make one wonder what the point of the price-setting panel is of course, given it’s now been end-run two years in a row. In any case, no one is anxious for a replay next year.

Jeff Loder said he and his family, as well as ASP members, had been subjected to threats when negotiations had turned to angry protests. “’I’d like to find Mr. Loder in a dark alley and take care of him.’ Things like that,” he said. He was in touch with the Royal Newfoundland Constabulary, but his main concern, he said, was how it made the province look. “Other people see it. And is that the lesson that we are going to teach the next generation of Newfoundlanders and Labradorians? And that is what has particularly upset me. It’s completely ridiculous.”

Happy fish

New Brunswick startup East Coast Innovation is about six months away from commercializing SmoothMove, a “voluntary, swim-in technology” that will allow aquaculture operations to move fish faster from pen-to-pen or tank-to-tank without overcrowding, reports allNovaScotia.

Just how exactly you convince fish to swim where you want them to swim is proprietary, says founder and CEO Joel Halse, but it involves “creating an environment” when they will do so. It makes life easier for acquaculture operators and means less stress on the fish and lower mortality.

The company has developed other products — fish feeding systems, cameras and monitors — but this has been its main focus since its founding in 2020. Halse has two patents on technologies he developed during his time at Cooke Aquaculture — for a fish pumping system and sea-lice treatment technology — and has partnered with the global firm to do final testing and data collection on the swim-in system. It hopes to install 100 to 200 units per year with a focus on markets in Canada, the U.S. and Norway.

Save the date: PPF Frank McKenna Awards 2024 celebrates leaders making Canada and the Atlantic region richer through their ingenuity and initiative. This year’s event will take place on Oct. 10 at Pier 21 in Halifax. Register now — and stay tuned for announcements about our 2024 honourees. 

On the horizon

Releases:

• April 30, GDP (February)

Events:

• May 22-24, 2024 Downtowns Atlantic Canada Conference

• May 28-30, Atlantic BIOCON 2024

• June 3-4, H2O: Home to Overseas Conference

• June 4-6, Energy NL Conference and Exhibition 2024

• • June 5-6, Atlantic Venture Forum

  • Oct. 10, Frank McKenna Awards 2024, Register here

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This newsletter is produced by journalists at PPF Media. It maintains complete editorial independence.