There are two stories behind this year’s investments in Atlantic Canada: strong growth in the three Maritime Provinces and a slowdown in spending in Newfoundland and Labrador. Spending in all four provinces is projected to total C$12.8 billion (US$10 billion), down nearly 2 percent from 2015. (All figures below are in Canadian dollars.)
A region of fewer than 2.4 million people, Atlantic Canada’s economy is holding steady with 412 proposed major corporate and public-sector projects, in various stages of development, worth $125 billion, according to a report released by the Atlantic Provinces Economic Council (APEC). Nova Scotia leads the way with C$60 billion of the total.
Executives will find the Atlantic Provinces offer favorable costs for conducting business, cooperative local and provincial officials, integrated transportation networks and a skilled talent base. To meet the challenges of an aging workforce, leaders in the region’s provinces are developing strategies to attract talent from other regions of Canada, as well as from around the world, says Patrick Brannon, director of major projects, APEC.
Workforce remains a leading factor in corporate reinvestment. “Developing the newest technology, and having the universities close by as partners is key to us,” says Stephane Turbide, general manager, Pratt & Whitney Canada, in Halifax. He said the partnerships formed with academic institutions are one of the reasons the company is pioneering its next generation of manufacturing technologies in Nova Scotia.
Pratt & Whitney, which has been in Halifax nearly 30 years and employs 325 people at this facility, is undergoing equipment and technology upgrades worth up to $67 million. The efforts will support the company’s sourcing strategy, keeping the development of its fan and turbine blades in house, Turbide said. The company benefits from competitive compensation rates, and the expertise and skill sets resident in the workforce.
Newfoundland and Labrador
While Newfoundland and Labrador will realize $6.5 billion worth of investments in 2016, this is a decrease of 14 percent compared to the previous year. Brannon said the decline in the oil and gas sector is affecting the provincial economy. What’s more, next year activities will begin to wind down at the $14-billion Hebron offshore oil project.
There is also uncertainty surrounding the $7.7-billion Muskrat Falls hydro dam and electricity transmission infrastructure project due to several delays and cost increases. “In confronting the options, spending to date is irrelevant,” said Finn Poschmann, APEC’s president and CEO, in a statement. “What matters are capital spending to complete the project and the timing of the first power it produces, versus continued contractual obligations and the cost of alternative electricity sources, if the project is canceled.”
A promising project for the province is Statoil ASA’s offshore oil exploration. “We don’t know how big it is going to be … the biggest part of it is the Bay du Nord discovery — 600 million barrels of oil,” Brannon says.
Nova Scotia’s Riding High
In Nova Scotia, activities tied to Canada’s national military shipbuilding strategy comprise one of the biggest projects underway in the province. The building of six arctic offshore patrol ships is fully underway at the Halifax Shipyard; the building of combatant ships will begin in 2020. Brannon said the two projects combined are worth nearly $30 billion.
J.D. Irving Limited has invested $350 million at the Halifax Shipyard, creating what is today the most modern shipyard in North America, says Mary Keith, vice president of communications, J.D. Irving Limited. The shipbuilding will take place completely undercover; and the paint booth will accommodate entire sections of the ships. What’s more, the project utilizes technologies that mark firsts in North America in terms of steel manufacturing technologies.
Keith says J.D. Irving benefits from the expertise found in the local supply chain. High-tech firm Bluedrop, located in Halifax, is the developer of online technical training for the Canadian Navy crews who will operate the new ships.
Keith also notes the importance of J.D. Irving’s partnership with community colleges to build the pipeline for the next generation of workers, ensuring the programs are targeted to the technologies in use.
Investments in New Brunswick Skyrocket
Investments in New Brunswick expanded by 29 percent in 2015. This year growth is expected to increase 5 percent to $2 billion, thanks to the Saint John Safe Clean Drinking Water project, among others.
J.D. Irving has just completed Phase II of its expansion at the Irving Pulp & Paper mill in Saint John. The company is currently securing environmental permits for Phase III, a $263-million investment. The project will include the installation of a new dryer for the pulp, which is used in the production of tissue and other paper products. In 2014, the company announced it would invest $513 million in its forest products businesses located across the province.
New Brunswick is also part of the Energy East federal pipeline project, which would span from western Canada to the province. Brannon says $4 billion of the $16-billion project would be invested in New Brunswick.
“Lots of potential,” Brannon sums things up in regard to investment opportunities in the Atlantic Provinces, highlighted by its traditionally large oil and gas resource base. Additionally, “Newfoundland and Labrador has a huge mining sector that is relatively untapped,” Brannon says.