Futurecasters weigh in on what the next five years could hold for Atlantic Canada — and how local companies can stay ahead of the curve
Our population is aging. We’re hemorrhaging youth, while trying to figure out how to reabsorb the baby boomers returning from other regions. There are new trade agreements, environmental demands, and ever-changing technology. And all of this is happening in a country that’s still reeling from the collapse of its oil and gas industry.
Taken at face value, it sounds pretty grim. But according to the region’s economic and business experts, the future may be brighter than expected — provided we make the right choices.
It’s no secret that Atlantic Canada’s population crisis poses a major threat to our economy. After all, as Craig Alexander, VP of Economic Analysis at the C.D. Howe Institute points out, the number of available workers is a major factor in terms of economic growth.
Attracting immigrants might help, but according to Alexander, it’s not a silver bullet — especially given that immigration is much heavier in larger urban centres.
“There are just so many baby boomers,” he says. “Right now Canada’s bringing in 250,000 immigrants a year, but we’d have to bring in 2 million to offset it. And there’s just no way we could successfully integrate that many people into the economy.”
Dr. Dhirendra Shukla, chair of UNB’s Dr. J. Herbert Smith Centre for Technology Management and Entrepreneurship, is hoping the millennial generation will help, but adds that, as a region, we need to start attracting and retaining them.
“Millenials are looking for an exciting place to be,” he says. “Can we offer a value proposition for that? Are we a place people are attracted to as a region, as a place to live, as a place to do business? Do we have cultural diversity, a thriving community that attracts young people to come in and stay here?”
Building a region with rewarding workplaces and welcoming communities is key to attracting both millenials and immigrants. And according to Dr. Emmanuel Yiridoe, professor and department chair of Dalhousie University’s Department of Business & Social Sciences, that’s a challenge some organizations are already tackling.
“I have colleagues that I’ve worked with for a year,” says Yiridoe, “and it’s difficult for them to find family doctors. In our case, the new Chamber of Commerce and the municipal office in Truro are working together to see how they can help address some of these issues for new individuals.”
While meeting the needs of the population is critical, Shukla thinks a change in perspective is just as important. He suggests that our aging population could give us early visibility into what will happen in the rest of the western world. If we leverage our significant R&D capabilities, he says, we could use that visibility to develop new technology, infrastructure, and expertise that other markets will value later on.
When it comes to trade, the rules have changed. We now need to adjust to two relatively new trade agreements: the Comprehensive Economic Trade Agreement (CETA), the trade agreement between Canada and Europe; and the Trans-Pacific Partnership (TPP), a trade agreement between Canada and 11 other Pacific Rim countries.
Although there’s concern about the TPP from a number of areas, particularly the dairy and auto industries, Alexander points out that a trade agreement is an “exercise in give and take.” And in this case, he says, the new rules around service trades offer plenty of opportunity for Canada.
“Increasingly, because of technology, you can do much more in terms of services,” says Alexander. “You can have a team of Canadian engineers doing design work on a bridge in China. Basically, you can work here in Canada, and sell your brainpower without actually building anything. Financial services are a great example of this.”
He also says more Atlantic Canadian businesses need to start exporting goods. “It’s hard to convince people to take that leap,” he says. “It’s much safer to sell to a local market. You understand the market, the people, you know the rules.” But agencies like Export Development Canada can help. “If you contact Export Development Canada, it’s like you have your own in-house research shop telling you what the rules are.”
As a region, we need to be more proactive if we want to maintain our footing in the new economy. For inspiration, Alexander suggests we look at Apple, which outdid its own product by producing the iPhone while the iPod was still popular.
“It’s hard for a business that’s producing a good quality product that’s selling well, to create the next product, one that makes the one they’re selling today redundant,” says Alexander. “But that’s what’s happening in the technology space. Even in other areas, things are still changing rapidly. And Canada can’t compete with places like China in terms of wages.”
In short, we need to stop being complacent. Our businesses need to constantly look ahead and evolve accordingly.
Shukla takes this line of thinking a step further.
“I think during the Internet boom, industry took a shortcut approach: ‘Can we outsource, can we offshore, can we ship it somewhere else to make it cheaper?’” he says. “But can we be the place that focuses on creative industry? Can we be the place that creates new, exciting companies that are more concerned about how our environment and mental health is, instead of focusing on cheap, cheap, cheap?”
What does it all mean?
With so many variables, it’s hard to say exactly what the economy will look like in five years, but Alexander has some predictions:
“The energy industry in Newfoundland is going to come back to life,” he says. “Demand for lumber from New Brunswick is going to rise. We will get in the odd trade spat with America over softwood lumber, but ultimately, America is still going to be building houses and a lot of that wood is going to come from Canada. I think we will end up with a pipeline into New Brunswick, and I think it will create a lot of jobs and lessen the need to import oil from abroad.”
But ultimately, outcomes will depend on the choices we make, and they won’t all be easy.
“It means New Brunswick is going to have to deal with its fiscal challenges,” says Alexander.
“Newfoundland is going to have to adjust to the fact that its energy sector is not going to be in the boom that it was before. Nova Scotia needs to take better advantage of its proximity to the U.S. market. And the traditional growth industries are going to change. If Atlantic Canada wants to succeed, there are going to have to be a lot of tough choices about how to transition the economy to one where other industries are the drivers of growth.”
But if we do it well, and we do it our way, Shukla thinks we’ll be just fine. “We don’t need to be Silicon Valley,” he says. “We just need to be ourselves and be proud of who we are. We don’t need to be world class — we need to be classy.”
And ultimately, he says we need to work together for the benefit of both traditional and new growth industries. If new companies take the time to connect with traditional companies to help them with their technology gaps, and the traditional companies respond in kind by sharing their experience, Shukla predicts we’ll all benefit from a stronger economy.