2022-23 Departmental Plan - Operating Context

While COVID-19 continued to affect the Atlantic Canadian economy in 2021, there were signs of recovery and resilience. Employment in the region grew by 41,500 in 2021, nearly returning to the 2019 pre-pandemic level. Nevertheless, COVID-19 and uncertainty surrounding new variants or risks continue to pose a challenge for Atlantic Canada and the world, and could temper economic growth in the near term. While the region’s gross domestic product is expected to continue growing in 2022, it is forecast to be at a slower pace than in 2021.

Within the context of COVID-19, a resurgence of the virus in the region could delay a return to normal economic conditions, particularly in contact-intensive and travel-related sectors. It could also add to ongoing supply-side challenges, putting continued upward pressure on prices. The Canadian Survey on Business Conditions for the fourth quarter of 2021 showed that the rising cost of inputs (including labour, capital, energy and raw materials) was the most anticipated obstacle for Atlantic businesses in upcoming months.^{Footnote 1}

In addition to input costs, labour shortages and recruiting skilled employees have also been identified as key challenges among Atlantic Canadian businesses, with job vacancies in the region at record levels in 2021. As such, training opportunities as well as the attraction and successful integration of newcomers to the region will remain crucial to Atlantic Canada’s success. Further, an increase in the participation rate of under-represented groups in the labour force, including women, youth, Indigenous peoples and persons with disabilities, would support Atlantic firms in meeting their labour requirements and support the region’s economic growth. These efforts, along with increases in automation, digitization and the integration of advanced technologies, will also help regional businesses adapt to labour shortages while increasing their productivity and competitiveness.

In the coming months and years, further economic recovery and growth in Atlantic Canada will continue to be driven by a combination of factors such as:

• growth in established or emerging and value-added sectors, including oceans, food, mining, clean technology, and information and communication technologies;
• the development of innovative products and services; and
• global economic developments, including greater access to international markets.

Atlantic Canadian companies have traditionally faced challenges in securing investments in part due to the rural nature of the region, resistance from traditional funding lenders, and the risky nature of some projects. The Atlantic Canada Opportunities Agency’s (ACOA) role is to help these Atlantic Canadian businesses obtain funding and create local job opportunities. However, there are always risks associated with any business investments.

To help build a strong, innovative Atlantic economy, ACOA makes investments that help new and growing Atlantic Canadian businesses adopt/adapt/pursue innovative technologies, secure other financing to execute their plans, be globally competitive and find new export markets. While there may be times when a company does not experience the success anticipated by its owners, ACOA takes its obligation seriously in the management of grants and contributions that are business-focused and achieve results for taxpayer dollars.