The Atlantic Momentum Newsletter: NL headaches, hydrogen plans and high-tech boats
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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:
Demonstrating power
Fish harvesters in Newfoundland and Labrador won an agreement last week to restructure their industry after days of protest, including one angry demonstration that forced the government to shut down the legislature and delay its budget by a day.
Fish harvesters have long been annoyed that they were restricted to selling only to buyers in the province, at a price negotiated by the Association of Seafood Processors (ASP), who own the processing plants, and the Fish, Food & Allied Workers union (FFAW), which represents both harvesters and fish plant workers. The province also set capacity limits at the fish plants and controlled the number of processing licences in the province. It was a system that was meant to safeguard the resource and protect fish processing jobs, particularly in rural areas.
But the harvesters said it created a processing cartel, meaning less competition and lower prices. “It certainly seems like the Liberals listen to the big companies rather than the common man, I can tell you that,” said protestor Jason Sullivan.
Late last week, the two sides appeared to reach a deal, with protest leader John Efford Jr. telling demonstrators the province had agreed to allow sales to out-of-province buyers, to raise the processing caps and to grant more processing licences. “We got it done,” he said. “Free enterprise for every species.” Provincial fisheries minister Elvis Loveless did not confirm details, saying in statement they’d discussed “agreeable changes that will move the fishing industry forward.”
The season opens in early April with the snow crab fishery, the province’s most lucrative, but prices have yet to be determined. Both sides have made proposals to the province’s Fish Price-Setting Panel, which will choose one of the two as the set price. The processors were not happy, warning that a wide-open market and out-of-province sales could mean job losses for fish plant workers.
“We’re very disappointed to say the least that a decision of this magnitude would be made as a result of this type of protest,” said ASP executive director Jeff Loder. “These are important public policy decisions. They should be made from the result of in-depth policy analysis and work.”
A day late, many dollars short
The budget Newfoundland and Labrador managed to present a day late included a massive increase in health spending and more money for housing, both preoccupations of the Atlantic provinces this budget season.
Total health-care spending will be $4.1 billion in 2024-25, almost 40 percent of the budget and up from a record $3.6 billion this year. It includes $30 million to hire workers for primary health-care teams and to create new teams, as well as $10 million to recruit and retain health-care workers. It will also put $16-million toward a “modernized health information system,” and allocate $10 million to expand virtual care services. To help alleviate the housing crisis, the province will put $50 million into a rental housing development loan program and commit $36-milion over four years to build provincial housing units.
The province is forecasting a deficit of $152 million for the coming year, but it admitted its initial projection for the year just ending was wildly off base. This year’s deficit will be $433 million, up from the $160 million originally forecast, a jump it blamed on falling offshore revenues, a drop in corporate income tax revenue and rising health-care costs.
New Brunswick’s budget, also released last week, showed a healthier balance sheet and charted a more modest fiscal course overall. It promised no new significant tax or spending measures, and a modest $41-million surplus.
Revenue growth would be slower than in previous years, said Finance Minister Ernie Steeves, and the province needs “to remain fiscally responsible over the longer term.” The health budget would be just $1.6 million higher than previously announced spending figures for the year, and would include $70 million for regional health authorities and $23 million for new technologies and digital health records. That commitment was well shy of the $600 million the province’s doctors and nurses said recently was needed.
As to the housing crunch, the province repeated an earlier commitment to spend $102 million building or upgrading 380 public housing units, but offered no new cash.
Big green hydrogen machine
Building a green hydrogen industry is a massive challenge, but so too is creating an actual hydrogen market from scratch. Canada and Germany said last week they would work together on that job, announcing each country would put 200 million Euros into H2Global, a platform that will set the price producers get for their hydrogen. The money will “get the market going,” said Federal Energy and Natural Resources Minister Jonathan Wilkinson, by helping close the gap between high production costs early on and what buyers are willing to pay. The two countries also signed a memorandum to create a hydrogen trade pact. It sees sales starting as soon as next year.
READ MORE: PPF Explains: What is green hydrogen?
The Canadian government believes clean hydrogen will become a $50-billion-per-year industry, with much of that coming from wind-to-hydrogen projects in Atlantic Canada.
Newfoundland and Labrador has selected four projects to proceed with wind farms on Crown land, the most advanced being World Energy GH2’s project on the Port au Port Peninsula, which has submitted its environmental assessment. The province sees the four projects creating 11,694 full-time jobs at peak construction and contributing $206 billion to GDP. The deal with Germany “will lead to contracts and contracts will lead to financing,” said World Energy GH2 chairman John Risley.
“It is a huge step forward and it is something that I think people in Newfoundland and Labrador can be enormously optimistic about in terms of the creation of jobs and prosperity,” Wilkinson said.
At the same announcement, Newfoundland’s Pattern Energy announced it has signed a letter of intent with a German energy company to sell it ammonia made from green hydrogen. Pattern’s Argentia project was not one of those selected by the province to proceed on Crown land, but the company says it has enough private land secured for a wind farm to produce the 300 megawatts of energy it needs to proceed.
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.
Keeping the ships running on time
If you think airports are bad, be thankful you don’t travel by cargo ship. Their on-time arrival rates at ports around the world can be as low as 30 to 50 percent, and they often arrive to find there’s no berth available. They have to wait offshore, burning fuel and growing impatient.
Halifax-based start-up Global Spatial Technology Solutions, or GSTS, is developing a berth-scheduling platform to solve the problem. “It’s basically a Google Maps and air traffic control for ships,” says CEO Richard Kolacz.
Earlier this month, Canada’s Ocean Supercluster, a federally-funded agency that helps commercialize ocean technology, gave GSTC $5 million to add artificial intelligence into the mix. The platform, called Ociana, will take in satellite and weather data, as well as information from the ports and ships themselves, to optimize routes and arrival times, thereby reducing fuel costs and emissions and making the ports run more efficiently.
The Ocean Supercluster also announced $1.2 million in funding to a B.C. company for an Aids to Navigation project, which will develop technology to modernize navigation buoys and mooring systems, and $950,000 to the $2.6 million OceanAI Navigator project led by St. John’s-based CORSphere Software Inc. It’s designed to help shipping companies manage their fleet operations, with a focus on lowering fuel consumption and predicting maintenance needs.
To add to the burgeoning ocean tech scene around Halifax, The Cove, an ocean research hub in Dartmouth, has been chosen as an “accelerator” for companies taking part in NATO’s Defence Innovation Accelerator for the North Atlantic (DIANA).
The program helps develop dual-use technologies that can have both civilian and military applications, and is meant to build connections between companies, researchers and the militaries of member countries. The federal government is providing $26 million for the project. DIANA puts out ‘challenges’ in key areas like undersea sensing and surveillance, and asks developers to pitch solutions it then provides financing and training for.
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Electric lobster
A Nova Scotia company is hoping to bring the EV revolution to the fishing industry. Indigenous entrepreneur Michael Polak and Covey Island Boatworks have teamed up to form Akwekon SE, and are completing design work on an electric hybrid lobster boat they hope can help decarbonize the industry. According to Oceans North, an environmental group, the province’s 2,300 lobster boats produce roughly 82 million kilograms of CO₂ each year, which is roughly equivalent to 35,000 cars.
There’s something of a race underway to electrify the industry. Halifax-based Glas Ocean Electric built a hybrid fishing boat prototype last fall that would allow captains to use diesel power to get to their fishing spots and then engage the electric motor once they began dumping or hauling traps. A company in P.E.I. has built a similar boat, and in Lunenburg, ABCO industries has converted a 32-foot police boat into a fully electric commercial fishing boat.
The effort has drawn a certain skepticism. Not only can hybrid engines be twice as expensive, but fishers wonder if they could ever deliver the power and cruising range needed. Oceans North argues the Nova Scotia fleet is an excellent candidate for electrification because 70 percent of its vessels remain within 20 kilometres of shore, well within the range of battery-electric systems.
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.
Pallets
Nova Scotia finally got its first installation of tiny pallet shelters up and running in a quiet neighbourhood in Lower Sackville, part of its effort to tackle homelessness. The community of 19 units, with separate washrooms and a laundry facility, faced a backlash when it was originally announced but seems to have opened with no fuss. It’s next to an existing shelter, with support workers and a mental health counsellor available.
Residents must sign an agreement to abide by 38 rules, or risk expulsion, and the community is surrounded by a chain link fence — which administrators say is meant to protect the residents, not enclose them.
The province spent $7.5 million on 200 of the Pallet shelters, but the roll-out has been slow. The U.S.-based manufacturer would not ship them until it was satisfied community supports, including sanitation and security, were in place, and local opposition sprung up over concerns about drug use, violence and the effect on real estate values.
Community Services Minister Brendan Maguire said last week he expected all would be in place by next winter. “We are working through the where and the when,” he said, and holding public consultations to address “fears of the unknown.”
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
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This newsletter is produced by journalists at PPF Media. It maintains complete editorial independence.
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