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BACKGROUNDER
1. Tools and Measures to Support Market Diversification and Supply Chain Development
Atlantic Trade and Investment Growth Strategy (ATIGS)
- ACOA works closely with Global Affairs Canada and the four Atlantic Provinces to deliver the Atlantic Trade and Investment Growth Strategy (ATIGS), which is a key lever to position Atlantic Canada as a destination of choice for trade and investment and helps firms diversify their markets.
- ATIGS is supported by a five-year Atlantic Trade and Investment Growth Agreement (ATIGA) between the Government of Canada, through ACOA, and the Atlantic provinces. ATIGA helps increase the number of firms doing business internationally and increase foreign direct investment.
- A signature ATIGA initiative is the Market Entry Development Program, which provides in-market support to companies seeking to enter export markets in Europe and the Indo-Pacific region.
ACOA Programming in Support of Export Development
- In addition to its participation in ATIGS, ACOA delivers programs and services that help businesses become more innovative, productive, and export-ready:
- Support for business productivity and scaleup:Through the Regional Economic Growth Through Innovation (REGI) program, ACOA helps firms increase technology adoption, improve productivity, commercialize new products, and increase export capacity.
- Business ecosystem support:Through REGI and the Business Development Program, ACOA supports organizations that help businesses scale, be more productive, increase their ability to compete globally, attract new investments, and participate in global supply chains.
- Policy, advocacy, and coordination: ACOA is active in policy development, and works to ensure that Atlantic firms are considered in national policies and programs. Examples include the Trade Commissioner Service, the North American Platform Partnership, and the Industrial and Technical Benefits (ITB) policy. To support the development of green supply chains, ACOA is currently collaborating with Transport Canada on the Green Shipping Corridors Program, announced in Budget 2023, by increasing outreach and facilitating regional tours.
- Business intelligence and guidance:Businesses can access export-related research, analysis and insights through ACOA Business Information Services. Account Managers also engage regularly with businesses to address their export development needs across various markets and sectors.
2. Atlantic Competitive Advantages
Regional Momentum and Priority Sectors
- The historic momentum that the Atlantic economy is experiencing presents the region with a unique opportunity to seize new markets, participate in global supply chains, and attract investment.
- Exports comprise over 30% of the region’s GDP, with traditional sectors like food and seafood contributing significantly to the economy (in 2022, the fisheries industry alone accounted for $6.2 billion or 14.3% of regional exports).
- In addition to resource sectors, the region also has growing competitive advantages in technology-intensive industries of the future, including:
- Energy innovation: Recognizing that clean energy is central to the net-zero transition, ACOA is working to promote the significant green jobs and clean energy market opportunities enabled by energy innovation (wind and green hydrogen, SMRs, critical minerals, energy storage and their supply chains). The region’s experience in energy production, access to high and consistent winds, deep-water ports, and proximity to US and European markets position it well to become a global green economy leader and seize market opportunities both at home and internationally.
- The US Inflation Reduction Act and associated large investments expected in the next few years to support clean growth and resilient supply chains provide further opportunities for Atlantic firms. There will be significant competition from other jurisdictions, and the ability of our firms to navigate US incentives will be key to capturing potential benefits.
- Aerospace and defence: The Atlantic aerospace and defence industry accounts for almost 23,600 jobs, and employment grew by 19% between 2015 and 2019 (Economic Impact Report, Atlantic Canada Aerospace and Defence Association, 2022). To increase export and supply chain opportunities, ACOA promotes investments through Canada’s ITB Policy and raises awareness of business opportunities that exist.
- Bioscience:Bioscience is an important driver for Atlantic Canada, consisting of approximately 900 organizations and employing over 10,000 people in 2019. The private sector alone employs approximately 5,500 people in a diverse range of companies, from start-ups to multinationals.
- Ocean tech: With an ocean sector estimated to grow to over $25 billion by 2030, Atlantic Canada is poised to be a key player in the industry worldwide. More than 40% of Canada's blue economy is anchored in Atlantic Canada, and companies are developing world-leading solutions in areas ranging from aquaculture to environmental monitoring to naval defence.
- Information and communications technology (ICT):Atlantic Canda is home to a growing ICT industry, including sectors such as fintech, which is home to an estimated 500 businesses and over 35,000 employees with a deep knowledge of back-office processes and operations. The region also boasts a strong cybersecurity ecosystem, including the UNB-based Canadian Institute for Cybersecurity, which brings together researchers and practitioners to tackle pressing cybersecurity challenges.
- Energy innovation: Recognizing that clean energy is central to the net-zero transition, ACOA is working to promote the significant green jobs and clean energy market opportunities enabled by energy innovation (wind and green hydrogen, SMRs, critical minerals, energy storage and their supply chains). The region’s experience in energy production, access to high and consistent winds, deep-water ports, and proximity to US and European markets position it well to become a global green economy leader and seize market opportunities both at home and internationally.
Market Diversification
- While the region’s momentum and sector advantages are undeniable, global disruptions and economic headwinds in recent years – including geopolitical conflicts, labour shortages, the net-zero imperative – have underscored the vulnerability of global supply chains and trade ecosystems.
- The region’s high concentration of resource-based industries (agriculture and agri-foods; fishing and seafood; mining, oil and gas; refined petroleum; and forestry), coupled with its small internal market, make it particularly vulnerable to these shocks.
- Only 23% of exporting businesses in the region had more than one partner country in 2022, compared to 24% nationally. Atlantic firms need to diversify to reduce their trade risks.
- The United States remains the region’s most important export market, representing 70% of total export sales in 2022 (down from 76% in 2016).
- ACOA will closely follow potential impacts stemming from this fall’s US presidential election, including the announcement by the Prime Minister of a new Team Canada engagement strategy to strengthen Canada’s relationship with the US and defend Canada’s interests.
- Atlantic firms are working to diversify their markets and take advantage of Free Trade Agreements beyond the US. For example, from 2016 to 2022, the share of the region’s exports to the European Union increased from 10% to 13% as firms leveraged the Canada-European Union Comprehensive Economic and Trade Agreement.
- The Indo-Pacific is now the world’s leading region of economic growth and offers Atlantic firms significant opportunities for trade and expansion.
- In addition, through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), there is an opportunity to develop stronger trade ties between Canada and the other 10 CPTPP member countries (Australia, Brunei Darussalam, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam).