Nearly half of the major investment projects in Atlantic Canada are being developed in this province. That fact was the focus of the Atlantic Provinces Economic Council’s (APEC) annual inventory.
“We’ve got $115 billion of project activity in Atlantic Canada, and we’ve identified about $54 billion in Newfoundland and Labrador,” said Patrick Brannon, the economic think-tank’s major projects director, from Moncton Monday, after the council wrapped up its half-day mini-conference discussing regional economic trends.
“So it’s a lion’s share of the total, and also for this year, especially, 2013, we’ve got about $14.3 billion of investment, and over $9 billion of that is in Newfoundland and Labrador. So projects like Hebron and Muskrat Falls and Long Harbour, and some of the other offshore work, are really driving activity in that province.”
Cities in Atlantic Canada are seeing marked growth because of the investment, said Brannon, about with nine per cent population growth in St. John’s and Charlottetown, five per cent in Halifax and 10 per cent in Moncton between the past two census periods. In Newfoundland and Labrador, that growth is coming largely at the expense of rural areas of the province.
“There’s been good employment growth in St. John’s, so people are moving into the city and taking advantage of those opportunities, and that, in turn, is creating a need for new infrastructure, new housing developments, new schools, new hotels, the expansion of the convention centre and two new big office buildings downtown, new retail — those kinds of things are all being built in the city to support the growth in the population,” he said.
The council brings its annual inventory road show to St. John’s on Thursday for a sold-out event featuring presentations on regional projects and investment trends. Scheduled to speak at the Delta Hotel are Richard Pratt, vice-president of Atlantic region developments for Husky Energy, and Francis MacKenzie, president of North Atlantic Iron, as well as Brannon and Elizabeth Beale, APEC’s president and CEO.
Brannon identified two areas of weakness in the provincial investment picture: the risk and volatility of commodity prices, as well as the public sector as the government makes spending cuts in the face of budget deficits. “The spending on infrastructure — roads, schools and hospitals — will probably slow a little bit over the next couple of years until they get in hand, and then they can ramp up spending again,” said Brannon, who said a balance has to be found so that infrastructure grows enough to allow development to continue, something he says Newfoundland and Labrador has done better than other provinces in the last few years.
“A lot of provinces dropped off in terms of public spending right after the recession,” he said. “There was a ramp-up for about two years. (Since) 2010, it’s been steadily declining in the Maritimes, whereas Newfoundland held its own up until this year. This is the first year where they’ve seen a bit of decline in their infrastructure spending. So they had been doing quite well, but the budget balance is in the red at the moment, and they’re working to fix that and put it back into a balanced position, and one way they can do that is just to hold back on some of the infrastructure spending for a couple of years.”
Here are a couple of highlights from the council’s annual inventory:
‰ Newfoundland and Labrador has 113 projects totalling $54 billion, an increase of 12 per cent over last year, due to an in-crease in the estimated value of key energy and mining projects.
‰Value of current-year spending is $9.4 billion, up 10 per cent from last year, due largely to an increase in spending on Hebron and Muskrat Falls.