The Atlantic Momentum Newsletter: Missing momentum, an EV boost and Saltwire’s fate

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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:

Mind the Gaps

It’s been a year since the Public Policy Forum published the Atlantic Momentum Index, its landmark study of the region’s economic resurgence. The Index charted 20 social and economic indicators — everything from labour productivity to immigrant retention and life satisfaction — to see how the region performed in recent years. Fully 16 of the 20 indicators showed momentum — i.e., an improving growth rate — an undeniably optimistic result.

Which, not to be pessimistic, begs the question: what about the other four? This week, PPF published Mind the Gaps, a look at those areas where the region had no momentum.

Three of those were hardcore economic measures: employment income, non-residential investment by business and government, and NEET (the proportion of those between the ages of 15 and 29 who are not employed nor in education or training). Those have long been a challenge in Atlantic Canada. The region has been poorer, with less robust investment and higher unemployment for decades.

The good news is that the most recent numbers show improvement. Employment income is growing slightly faster in Atlantic Canada than the country as a whole. And jobs data released in early March showed the employment rate in Nova Scotia rose to 58.8 percent in February, the highest rate for the province since June, 2013. Two of the four Atlantic provinces (P.E.I. and Nova Scotia) showed a higher employment rate this February than last, the only provinces to do so.

The even better news is that on many underlying factors that create a dynamic economy — population growth, immigration and immigrant retention and university enrollment — the region is flourishing.

As to the last measure — access to a family physician — it’s a bit deceptive in that momentum is flat, not falling, and the region is doing slightly better than Canada as a whole. And attracting and keeping doctors, and other health care professionals for that matter, has been something of an obsession for policymakers in the region (see next item).

This week on WONK, Rupa Banerjee explains what’s wrong with Canada’s immigration system

Medical help

The Atlantic provinces are trying all sorts of measures, from easing qualification requirements for foreign-trained doctors to incentive payments, to fill gaps in the health-care system. It’s an uphill battle. Last week, for example, Nova Scotia Health reported that 153,373 people were on the provincial registry of those who need a family doctor, more than double the number in 2021.

In New Brunswick, where 74,000 people have no primary care provider, the Department of Health and the province’s medical society are planning a summit to figure out how to transition to “team-based” primary care. The move may put an end to solo medical practices by creating a system of multidisciplinary primary care teams consisting of doctors, nurses and other health professionals like pharmacists and physiotherapists. It would take pressure off family doctors and deliver care more efficiently.

But still more reform, and more money, is needed. The New Brunswick Medical Society and the New Brunswick Nurses Union released a joint report last week identifying six areas that need immediate attention, and called for another $600 million to be injected into the health-care system. That included $70 million to create those primary care teams, $172 million for pay increases to match competing jurisdictions so doctors and nurses stay in the province and $60 million to digitize health records.

The money for these “generational transformations” would mean a five percent increase in the provincial budget. The Health Department said it was reviewing the report.

Making room

Boosting housing starts in Atlantic Canada, given the booming population, has been another challenge in the region. The Momentum Index had some good news on that front — they grew at an average annual rate of 8.4 percent between 2015 and 2022 — but they are still running at 77 percent of the national average.

Last week saw another flood of announcements of funding through the federal government’s $4-billion housing accelerator fund. In Nova Scotia, King County, Chester and Lunenburg will be getting a total of $9.1 million. Stratford and Three Rivers, P.E.I, will be getting nearly $8.4 million between them and St. John’s will receive $10.4 million. St. John’s had actually applied for just $2.8-million but was told by the federal housing minister to get more ambitious so it upped the ask to $18.5-million. Ottawa looks to have sawed it off in the middle.

All of which must have further annoyed mayors in southwestern New Brunswick. Eastern Charlotte, St. Stephen, McAdam, Grand Manan, Campobello and Fundy Shores all applied for funding and all were rejected. “The federal government didn’t seem to care about our part of the province,” said John Craig, Mayor of Eastern Charlotte. “I think we are all very angry.” A spokesperson for the Canada Mortgage and Housing Corporation, which administers the fund, said decisions were based on a given municipality’s ambition, as well as building permit data showing whether it could meet its goals or not. Of 544 applications nationwide, just 179 have resulted in agreements.

Ensuring enough public housing is another challenge, and Nova Scotia is finding it needs to squeeze more people into its existing stock. With 7,683 households waiting for public housing, the Nova Scotia Provincial Housing Agency has been asking people who have more room than they need — often because kids have moved out — to move to smaller units. The agency says 1,968 households across the province have unused bedrooms, of which 500 are “severely over housed,” with two or more extra bedrooms. In the last year, however, only 39 have been relocated.

“Overhousing may have been occurring in the past but there was never really an urgent need to make those changes,” said Pam Menchenton, executive director of client services for the agency. “But now it’s a different time.”

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UPCOMING: Annual Testimonial Dinner Honour Roll 2024 Join more than 1,200 leaders and policy wonks as PPF pays 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.

Charging ahead

Efforts to secure Atlantic Canada’s position in the electric vehicle supply chain took another step forward last week when the federal government gave Dalhousie University $5 million for its Canadian Battery Innovation Centre.

Dalhousie is a leader in electric battery development thanks largely to a research hub set up there by Jeff Dahn, a pioneer in lithium ion batteries, with the help of $3.1 million from Tesla Inc. (Dalhousie was the first university to partner with Tesla Inc., in fact, back in 2015.) The new $20-million innovation centre is slated to open next fall and will allow researchers and companies to build and test electric battery prototypes, with hopes it can turn out 50 to 100 battery cells per week. At the moment, most of that work goes in China, which dominates the industry. But China has recently instituted export limits on graphite and rare-earth metals, which has led to concern over the security of the electric-vehicle supply chain.

Chris Burns, CEO of Halifax-based Novonix Ltd., a battery materials company that spun out of the Dalhousie lab, says the centre should help make Nova Scotia a key player. “This will attract more top talent,” he said. “Hopefully they can see the opportunities here in Nova Scotia as we continue to develop the private sector.” Novonix employs about 200 people, half of them in Halifax. “As we see chemistry advancements, as we see the development of grid energy storage, it’s going to be a transformative sector over the course of this decade.”

The potential of electric batteries was on display as well last week in New Brunswick. Saint John Energy announced that its $11-million battery installation had already saved the utility $70,000 in its first two months of operation. Consisting of three Tesla Megapack batteries powered by the Burchill Wind Project, the installation can power about 4,000 homes for two hours. It allows the utility to shave the amount of extra power it would otherwise have to buy during times of peak demand — saving money and cutting emissions.

Slipping away

Federal Fisheries and Oceans Minister Diane Lebouthillier officially cancelled this year’s maritime elver season last week, blaming widespread poaching along with “harassment, threats and violence between harvesters and toward fishery officers.” The department needed more time to develop regulations to crack down on illegal fishing and safeguard the species, she said.

Elvers are translucent baby eels that journey from spawning grounds in the Atlantic Ocean to Maritime rivers and coastal waters in the spring. Licenced fishers and First Nations have been allowed to harvest a total of about 10,000 kilograms per year; most are shipped live to China where they are raised in aquaculture tanks before being sent to sushi restaurants in Japan. With elvers fetching as much as $5,000 per kilogram, poaching has become a huge problem.

This marks the third time in five years the fishery has been fully or partially closed, and harvesters complained last week that surely Ottawa has had time to put safeguards in place.

The Assembly of Nova Scotia Mi’kmaw Chiefs, who claim treaty rights to a moderate livelihood fishery, said they had sent the ministry a proposal on how to safely open the season, but were ignored. “Clearly, DFO had no intentions of working in good faith with the Mi’kmaq on the elver fishery,” said Chief Gerald Toney, fisheries co-lead for the assembly.

The DFO said it would continue to enforce the laws on poaching; it announced that it has already made five arrests this year and seized two vehicles, as well 1.14 kilograms of elvers (which it released).

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.

Saltwire

A Nova Scotia judge put Saltwire Network Inc. into bankruptcy protection last week, with both the newspaper company and its biggest creditor, Fiera Private Debt, saying they were confident it would emerge and keep serving its loyal readers. Court documents showed there’s not much else they agree on, however.

Saltwire, which owns 26 daily and weekly newspapers in Atlantic Canada, said in its filings it had $63.8 million in debt, including roughly $33-million owed to Fiera, $7.5 million in unpaid HST and $2.6-million owing to the company pension plan. Fiera puts its total liabilities at $94.1 million. The two companies disagreed on who should be the monitor in charge of restructuring; the judge sided with Fiera’s choice of KSV Advisory because it had already been working on the file.

Both see great promise in Saltwire’s nascent “last mile” delivery company, Door Direct, which would make use of its 830 carriers across the region to deliver packages as well as newspapers. Saltwire CEO Marc Lever, who stepped down mid-week as part of the bankruptcy proceedings, said in court documents that it could “materially improve their viability” but that Fiera wanted to sell it, a decision that is “both short-sighted and premature.” For its part Fiera said it has “lost faith” in the company’s leadership, which has “displayed a repeated failure to properly manage” the business.

There’s no disagreement that Saltwire faces the same struggles as all traditional news media. The company’s advertising revenue dropped 44 percent in the last four years, from $43.7 million to $24.5 million, according to the bankruptcy documents. Research from Toronto Metropolitan University shows that 518 local new operations have shut down across Canada since 2008, though 224 have started up. Saltwire’s chief operating officer Ian Scott said he is confident it can “emerge as a stronger, more vibrant media company.”  Though who will be in charge is the big question.

On the horizon

Releases:

• March 27, Tourism indicators (fourth quarter 2023)

Events:

• April 11, PPF Growth Summit and Testimonial Dinner Honour Roll
• June 3-4, H2O: Home to Overseas Conference
• June 4-6, Energy NL Conference and Exhibition 2024
• Oct. 10, Frank McKenna Awards 2024, Register here

Interested in other PPF newsletters? Sign up for our new weekly email about health security in Canada and beyond. And check out WONK, our new podcast.

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