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2020-21 Departmental Results Report

Operating Context

Due to the COVID-19 pandemic, real gross domestic product (GDP) in Atlantic Canada decreased by 4% in 2020, compared to 2019. Nationally, real GDP fell by 5.3%. The change in real GDP was less pronounced in the Maritime provinces (-3.4%). In Newfoundland and Labrador, however, the decline in real GDP was the same as Canada’s.^{Footnote 1}

Despite the low number of cases in Atlantic Canada during the pandemic, the region’s economy was affected by a few outbreaks. This caused economic disruptions, most notably in contact-intensive sectors, weaker travel, and diminished business investment capacity. The pandemic also resulted in a subdued demand for goods across advanced and emerging economies. Atlantic Canada’s commodity exports fell by 22.5% in 2020 to reach $27.4 billion – a drop more significant than the national average (-12.2%).^{Footnote 2}

Atlantic Canada’s population was estimated at over 2.4 million in 2020, up 0.6%, compared to 0.8% in 2019.^{Footnote 3} This slowdown in population growth was due to the border shutdowns, which led to lower immigration. Compared to the previous year, a greater number of individuals moved from other provinces to the region, particularly to Nova Scotia and New Brunswick. Although the increase of interprovincial in-migrants to the region was not sufficient to offset the losses in immigration, this had ripple effects on the region’s housing market as sales and prices of both housing starts and existing homes increased. 

The Atlantic economy lost 46,500 jobs in 2020, representing a decline of 4.1% since 2019. In comparison, employment in Canada fell by 5.2%. The region lost 23,900 workers from its labour force in 2020 (-1.9%).^{Footnote 4} Although the recovery is under way, the pandemic has slowed down the progress made to better integrate women, youth, Indigenous people, people with a disability, immigrants and visible minorities into the labour market. According to the Atlantic Provinces Economic Council (APEC), an additional 14,000 workers could be added to the Atlantic labour force if participation rates for women aged 20 to 45 in the region were similar to those in Quebec, where low-cost child care is available.^{Footnote 5}

As the economy continues to recover, operating businesses in the region are struggling with changing demographics, lower immigration levels and a shrinking workforce, which prevent them from both growing and meeting the needs of their clients. During the first quarter of 2021, there were 27,685 job vacancies in Atlantic Canada, up by 2,500 for the same quarter a year earlier. The job vacancy rate increased 0.4 percentage points to 3.0% – the highest rate in comparable data since 2016.^{Footnote 6}

The above factors are generating more pressure for businesses to become more innovative in the coming years. Prior to the pandemic, the percentage of innovative enterprises in Atlantic Canada was at 68.5% during the period of 2017-2019.^{Footnote 7} However, over two thirds of Atlantic businesses do not plan to adopt or incorporate new technologies over the coming year. The main challenges undermining Atlantic businesses’ ability to do so include ensuring security and privacy of data, and access to financial resources to invest in new technologies.^{Footnote 8} Addressing these challenges will be key to helping businesses adopt advanced manufacturing and other technologies and increase the region’s competitiveness, productivity and economic growth over the long term.