The Atlantic Momentum Newsletter, Jan. 24, 2024: This week: Nasty barriers and clawing back lobsters
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:
One economy, many barriers
Interprovincial trade barriers exist largely as an archaic attempt by provinces to protect jobs, yet they’re a significant drag on economic growth and productivity. While they’re a big problem across the country, they have become an especially big frustration in Atlantic Canada, stifling competition and discouraging investment. “We really are one economy in Atlantic Canada. We are very intertwined and yet we still have these barriers,” says Chris McKee, president of the Atlantic Truckers Association (ATA). One annoyance his group deals with: The weight limit for big rigs pulling two trailers is 1,000 kilograms lighter in Nova Scotia than other Atlantic provinces, adding expenses and headaches to jobs.
A new PPF report drills down into the impact of these non-tariff barriers (NTBs), and how getting rid of them could have huge benefits for the region.
“Because the Atlantic provinces are smaller and more reliant on internal trade than the rest of Canada, they’d see an outsized benefit from eliminating NTBs. Prince Edward Island would see a 16.2 percent gain in GDP and Newfoundland and Labrador, 12.8,” notes the report. It would also bring a six percent employment boost.
There is some good work already being done. Nova Scotia, for example, has waived registration fees for out-of-province businesses, and the new Atlantic Physician Registry cuts back on the administrative burden and costs doctors face.
The report is the second in a series examining key forces affecting Atlantic momentum.
If you missed the first one, read it here: The Belonging Advantage: How quality of life is translating into big economic gains for Atlantic Canada.
Home truths
Canada’s housing crisis is likely to get worse before it gets better. Numbers released last week by the Canada Mortgage and Housing Corporation (CMHC) showed housing starts down eight percent nation-wide in 2023, compared to 2022. They fell in three of the four Atlantic provinces, with New Brunswick faring worst and only Nova Scotia managing an increase. Rising interest rates, rapid population growth, a shortage of skilled construction workers and municipal red tape all get their share of the blame.
And so the rush to boost construction continues, with the federal government announcing two more dollops of money for the region last week: $9.2 million for Saint John, N.B., from Ottawa’s Housing Accelerator Fund; and $8.2 million for the Membertou First Nation through the Rapid Housing Initiative. For Membertou, where 200 families are on the waitlist for housing, the money will pay for 32 modular single-family homes already under construction. Saint John expects its funding to spur the construction of 1,700 housing units over the next decade, though it got less than the $15-million it requested.
The Acclerator Fund has led to jurisdictional squabbles with premiers, but federal Housing Minister Sean Fraser urged municipalities last week to hurry up and apply for money. Cities must agree to ease zoning restrictions and increase density in order to be eligible, and Fraser called for aggressive action. “If you want to tap into the fund, be more ambitious than your neighbours,” Fraser said. “There are cities who won’t receive funding because they don’t want to end exclusionary zoning in Canada…maybe they’ll change their ways.” (Exclusionary zoning prevents multi-unit housing from being built in areas zoned for single-family homes.)
It’s a strategy that seems to be working in Halifax. The regional municipality agreed last fall to fast-track development approvals and increase density in return for $79 million from the fund, and last week its planning department proposed to allow building heights of more than 40 storeys in much of central Halifax and Dartmouth. Pockets of resistance remain, of course. In Moncton, which received $15.5 million from the fund in November, the year’s first council meeting was dominated by objections to a new housing development that would see townhouses and apartment buildings up to six storeys high built on the edge of the city. Area residents complained it would mean increased traffic, more noise, lower property values and more crime. Council delayed the rezoning decision.
Solutions big and small
There’s no shortage of interesting ideas to get housing built. The federal and Atlantic provinces’ housing ministers met last week and agreed to work on common regional standards for modular homes — houses built in sections in a factory and then assembled on a building site. The CMHC is putting together a catalogue of simple home designs in hopes of speeding up construction, and the ministers agreed one chapter will be aimed at the Atlantic region, taking into account climate, building codes and available materials.
In Nova Scotia, a start-up called Steel Castlesplans to use shipping containers to build affordable housing. One- and two-bedroom units will start at $150,000; they can be double-stacked and even come with a balcony. And the not-for-profit group that administers the former Canadian Forces Base Cornwallis wants to transform it for housing. The base closed in 1994, and until two years ago was used as a training centre for the Royal Canadian Sea Cadets, as well as hosting conferences and weddings. The Cornwallis Park Development Association has hired a Halifax design firm to plan the transformation, which would see single-family and multi-unit housing built and many of the 21 two-storey barracks buildings converted.
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Surely there’s an app for that
Newfoundland and Labrador is the latest province to undertake the eminently sensible, long overdue effort to give people electronic access to their own health records. The province is launching a new website and app called MyHealth NL that will allow those over the age of 16 with a valid health card to see their lab results, medical reports, allergies, and dispensed medications. A limited roll-out will begin Feb. 1, with 50,000 people added every month. Later updates will allow people to book appointments through the app.
The province hopes the service will ease the administrative burden on physicians and bring speed and efficiency to the entire health care services.
Electronic access to health records is surprisingly spotty in Canada, but it’s something the pandemic may have helped accelerate as provinces rushed to provide vaccination information and verification. A 2021 survey by Canada Health Infoway found eight in 10 Canadians wanted to access their personal health information online, but only three in 10 could.
Last year, Nova Scotia announced a $365-million contract with a division of tech giant Oracle Corp., to build an electronic health-care records system called OPOR (one person one record). It expected an initial portal to be ready within 10 months, with a full roll-out to begin in two years.
Day care stress
If it’s common now for policymakers to see child care as an economic development issue — necessary to grow the labour force — then it’s one that seems to need some care and feeding at the moment. Statistics Canada reported last month that the proportion of children aged 0-5 in child care, at 56 percent, was lower in 2023 than it had been in 2019. Three of the four Atlantic provinces (all but New Brunswick) reported a drop. And the proportion of parents reporting difficulty finding child care has jumped to 62 percent (from 53 percent) nationally, which means parents have had to work fewer hours, change their work schedules or postpone a return to work. That number jumped in all four Atlantic provinces, doubling in Newfoundland and Labrador to 67 percent.
Daycare operators in Atlantic Canada describe a system under considerable stress. In Newfoundland and Labrador last week, a study by Deloitte said more funding was needed to improve wages and benefits for daycare workers in order to keep them in the field. It recommended adjusting funding rates to match inflation, developing a province-wide waitlist and extending full-time hours for regulated centres. The province is about 20 percent of the way to creating the 6,000 new child-care spaces it promised by 2025 when it signed a $347-million agreement with the federal government to participate in its $10-a-day child-care plan. Nova Scotia said last week it is 40 percent of the way to its target of 9,500 new spaces by 2026.
In P.E.I., day care operators told a legislative committee last week they need more funding, and more space in public buildings to be made available for child care. One licenced in-home daycare operator told Saltwire that having to drop fees to $10-a-day in order to access operating grants made it impossible to stay in business, even with those grants increasing, and that she was shutting down at the end of the month. The province has added 500 new spaces in P.E.I. since July 2021, but the childcare waitlist has grown by more than 65 percent in the last four years.
Port plans
The Halifax Port Authority is looking for a new CEO. Allan Gray was five months from the end of a five-year contract, and was in negotiations to stay on, but announced last week that a return to his native Australia was in the best interests of his family. Gray steered the port through a CN rail strike and the pandemic, and also developed an ambitious 50-year strategic plan for the Port, one that includes plans to transition some of its operations from diesel to hydrogen.
He came to the port in 2019, just after Singapore-based PSA — the world’s biggest terminal operator — bought the South End terminal, the first of two it would buy there. PSA has ambitious expansion plans that include a $100-million project underway with CN Rail to link terminals to reduce downtown truck traffic. Last week, the world’s largest shipping line, Mediterranean Shipping Company, announced it is buying a minority stake in PSA Halifax. “To see the [MSC] invest in Halifax is a strong sign of confidence” Gray said. “Everyone’s focused on Halifax being a leading port. We’ve made sure we’re in the global eye.”
Consider the lobster
Lobster fishing, like baseball and curling, can be a game of inches. Or more precisely, millimetres. For Canadian exporters, they make a big difference. U.S. regulators announced unexpectedly last week that they are increasing the minimum size of live lobsters from the Gulf of Maine that can be sold in the U.S. for the first time since 1989. The minimum legal size of a lobster’s carapace, or outer shell, will go from 82 millimetres to 84 next January, and to 86 millimetres in 2027, a move designed to assure a healthy population. The Canadian minimum is currently 82 millimetres in most of Atlantic Canada, but fishers who want the flexibility to export will need to meet the U.S. standard.
Canada shipped $545 million in live lobster to the U.S. in 2022, and a spokesperson for the Maritimes Fishermen’s Union estimated as much as 30 to 40 percent of current landings would be ineligible for export under the new rules. It could also affect trade with China, which accounted for 36 percent of lobster exports in 2022, as only the most robust lobsters are sent on the 20-hour plane trip and some now may be diverted to the U.S.
On the horizon
Releases:
Wednesday, Jan. 31, GDP (November)
Events:
Atlantic First Nations Health Conference, Feb. 13-15
Society of Canadian Aquatic Sciences Annual Conference, Feb. 21-24
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