The Atlantic Momentum Newsletter, Feb. 7, 2024: This week: Searching for skills and fishy quotas

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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:

Immigrants wanted

Two challenges facing Atlantic Canada would seem to be contradictory. How could there be persistent labour shortages when immigration has the population booming? It’s reasonable to ask: Is the region attracting immigrants with the skills it needs? It’s a question economic development expert David Campbell examined last week on his Substack It’s the Economy Stupid!

Campbell looked at immigration data for New Brunswick between January and November of last year, focusing on permanent residents admitted. (So not including international students and temporary workers.) Over that time, New Brunswick admitted 10,225 permanent residents, and the “intended occupation” listed for these folks was revealing. Only 50 to 60 were in construction trades — just 10 carpenters, 15 welders and five plumbers. (The data is rounded to the nearest five.) In health care there were more than 350 admissions, but the vast majority were nurses and nurses’ aides — only 15 were doctors, five of them family doctors. Construction and health care are of course two of the fields crying out for workers. Campbell’s conclusion: when it comes to attracting the right newcomers for the jobs that need filling, “we have a lot of work to do.”

And not just in New Brunswick. Last month, the Construction Association of PEI complained that the province wasn’t bringing in enough skilled workers. A report by Island Investment Development Inc. showed that of the 1,421 people nominated by the province to come to the province in 2021-22, just 13 had a trades certificate, or less than one percent.

To help its construction sector, New Brunswick created a Labour Force Adjustment Committee last week with members from industry and government to brainstorm solutions to the labour shortage. John-Ryan Morrison, executive director of the Construction Association of New Brunswick, said the shortage is already “critical” and is certain to get worse, with 10,000 job vacancies expected by 2032. Immigrants make up only three percent of the sector now, he added, and “immigration is really the only way we are going to address most of those vacancies.”

One developer in Woodstock, N.B., meanwhile, has an idea to help. Tim Cook wants to build a 200-unit mini-home development on the edge of the city that would, in part, house the workers he needs to keep up with demand for housing. He’s had trouble hiring workers into the area, he said, because there is nowhere for them to live. “If we want to get stuff done we (need) workers,” he said. “And workers have to have housing.”

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.

Red tape wrangling

Cutting red tape is another way for business to get things done, and another area that needs improvement in Atlantic Canada. The Canadian Federation of Independent Business (CFIB) put out its annual Red Tape Report Card last week and once again, Newfoundland and Labrador had the worst grade of the nine provinces ranked. (Manitoba was not given an overall rank.) New Brunswick and P.E.I. placed seventh and eighth, respectively, though New Brunswick was most improved. Nova Scotia was the lone star performer from the region, finishing second overall.

Onerous regulation is more than a headache for business. It’s a drag on productivity for the whole economy, and a reason business investment has been so dismal in recent years. The CFIB ranks provinces based on their efforts to reduce regulatory burdens on business, including interprovincial trade barriers, on their transparency on the issue and on how big a priority they make it.

The report noted all four Atlantic provinces have a “one-for-one” policy that demands any new regulation that costs business money be offset by a reduction in cost elsewhere. Newfoundland and Labrador, however, is not using the rule, the CFIB said, nor has it reported on its total regulatory burden since 2014. New Brunswick got some credit for developing comprehensive guidelines last year for measuring its regulatory burden on business, a task that’s about 60 percent complete.

Nova Scotia has been a leader for several years on this issue, having created an Office of Regulatory Affairs and Service Effectiveness that makes cutting red tape a priority. It’s put special initiatives in place to reduce administrative costs and paperwork in the health-care system. The office reported last fall it had 45 such initiatives completed or underway that have saved doctors a cumulative 250,000 hours per year. Nova Scotia also spearheaded the launch of The Atlantic Physician Registry that allows doctors licenced in one Atlantic province to practice in all four without additional fees or licencing requirements, easing labour mobility in that crucial sector. That program won the CFIB’s Golden Scissors Award for regulatory modernization.

Mighty wind

The Atlantic Economic Council released the latest of its reports on clean energy last week, highlighting again the huge potential of wind power in the region. The report, Implications for Atlantic Canada’s Economy in the Pursuit of Net-Zero Emission, looked at three existing clean energy technologies — wind power, hydroelectricity and natural gas — and concluded wind would play the biggest role in the net-zero energy transition.

The report highlighted the Canada Energy Regulator’s projections that wind power generation will grow from about six percent of electricity production in Atlantic Canada in 2022 to 70 percent by 2050. The AEC estimates nearly $15 billion could be spent on wind projects between now and 2030, with $5 billion of spending in the region. Nova Scotia will see the biggest growth.

In line with last fall’s Public Policy Forum paper, Catching the Wind, the AEC sees offshore wind as the biggest opportunity, with the greatest economic payoff. Whereas 25 percent of project costs for onshore wind farms are likely to be spent in the region, more than half the spending for offshore wind generation — which is more expensive as well — is expected to stay in Atlantic Canada. That’s because offshore projects have more complex assembly that requires subsea work, marine transportation and logistics support. Local ocean technology firms and offshore oil support companies should be able to profit from an offshore wind boom, as will the region’s ports — three of which are already serving projects off the U.S. coast. Not a single turbine is turning offshore in Atlantic Canada at the moment, though Nova Scotia plans to add five gigawatts of offshore wind by 2030.

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Green hydrogen

New Brunswick introduced a five-year roadmap for hydrogen development last week, outlining 13 “action items” it would undertake to be a major player in the emerging market. Hydrogen could not only eliminate as much as 29 percent of the province’s greenhouse gas emissions, the roadmap said, but the market could be significant, with revenues of $349 million in New Brunswick alone by 2050 and another $1.9 billion of export revenue possible. “We want to send a strong message that New Brunswick is putting together a framework to be able to play in the game,” said Energy Minister Mike Holland.

The 13 items included everything from streamlining regulatory processes and harmonizing standards throughout Atlantic Canada to building partnerships with First Nations. It touted the province’s available wind power resources and its development of Small Modular Reactors (SMRs) as advantages in building the electrical capacity needed to produce green hydrogen. And it envisions creating two “hubs” for hydrogen production: one at the Irving Oil Refinery in Saint John, which already produces hydrogen using natural gas and plans to expand its capacity to offer fuelling infrastructure in Atlantic Canada; the second is the Port of Belledune, where there are plans to develop a green hydrogen facility.

What exactly is green hydrogen, you ask? Check out this edition of PPF Explains.

Power plays

The road to clean energy is proving a bumpy one in Atlantic Canada. Last week, both the province of Nova Scotia and its main utility, Nova Scotia Power, called for financial assistance from the federal government in the face of rising power costs. Electricity rates in the province have risen 14 percent in the last two years, with more increases expected as it transitions the power grid from fossil fuels.

The power company’s outstanding fuel bill has gone from $343 million last September to $395 million, costs which will be passed on to consumers. A large part of the problem stems from delayed deliveries from the Muskrat Falls hydro project in Newfoundland and Labrador, which forced the utility to buy more fossil fuels just as the war in Ukraine was pushing up prices. Muskrat Falls was famously late coming online, and massively over budget, and given Ottawa spent billions in 2022 to help cushion ratepayers in that province from huge increases, Nova Scotia figures it’s owed the same consideration.

The provincial government said last week it would assume $117 million of the utility’s fuel bill, spreading the cost to ratepayers over 10 years and limiting the rate hikes this year to 1.1 percent, instead of seven percent it would have been. Tory Rushton, the Minister of Natural Resources and Renewables, said he too hoped the federal government would step in given its actions on Muskrat Falls, and said he looked forward to “positive conversations” on the matter.

UPCOMING: Annual Testimonial Dinner Honour Roll 2024 Join more than 1,200 leaders and policy wonks as we gather to pay tribute to Canadians who have made outstanding contributions to public policy and good governance. This year’s dinner takes place on April 11 at the Metro Toronto Convention Centre — in the biggest dining room you’ve ever seen! Be in the room where it happens.

Listen to PPF’s new podcast: WONK, hosted by Edward Greenspon

Seeing red(fish)

A fight was probably inevitable. Two weeks ago, the Department of Fisheries and Oceans (DFO) announced it would reopen the commercial redfish fishery in the Gulf of St. Lawrence after nearly 30 years. The minimum total take allowed for this year was set at a fairly modest 25,000 tonnes. Still, upset over allocations seemed likely when, even before the decision, Nova Scotia was warning that hundreds of jobs were at stake it if didn’t get a sufficient quota.

But it was Newfoundland and Labrador that complained loudest when the quotas were announced. Though its share increased slightly to 19 percent, Corner Brook MHA and former provincial fisheries minister Gerry Byrne said he was “gobsmacked” and “enraged” by the allocations, which he said would threaten stocks by giving too much to offshore fleets and to communities not near the fishing grounds and with no workers, boats or experience. DFO decision-making was “intellectually and morally bankrupt,” he said.

The biggest shares of the quota went to Nova Scotia (33 percent) and Quebec (33 percent). Indigenous fishers will get 10 percent, though ironically Clearwater Seafoods, which is now 50-percent owned by a coalition of Mi’kmaw First Nations, saw its quota cut as part of a general reduction in the allocation to big offshore fleets.

On the horizon

Releases:

• Feb. 6, Building permits (December)
• Feb. 15, Housing starts (January)
• Feb. 20, CPI (January)
• Feb. 20, Teranet-National Bank House Price Index (January)
• March 27, Tourism indicators (fourth quarter 2023)

Events:

• Atlantic First Nations Health Conference, Feb. 13-15
• Society of Canadian Aquatic Sciences Annual Conference, Feb. 21-24
• H2O: Home to Overseas Conference, June 3-4
• PPF Frank McKenna Awards 2024,Oct. 10