Date: March 23, 2021
For Immediate Release
HALIFAX – Atlantic Canada needs more people working if.this region is to sustain even modest rates of economic growth, according to a new report from the Atlantic Provinces Economic Council (APEC), the fourth in itsLooking Ahead series.
Our demographics indicate that 50% more people will reach retirement age over the next two decades than will enter the labour market. As a result, our labour force would shrink by 130,000 people by 2040, without more people moving to the region or a higher proportion of the people already here participating in the job market.
“We estimate the Atlantic region needs to retain an average of 13,000 to 16,000 immigrants a year to sustain economic growth over the next two decades, with the number depending upon net flows of people to and from other parts of Canada,” says APEC’s President and CEO, David Chaundy. “If the region retains 75% of new immigrants, it will need to attract 18,000 to 22,000 immigrants a year to meet our labour force needs.” Only about 70% of recent immigrants are still in Atlantic Canada five years after arrival.
If the region was not able to attract and retain any immigrants over the next two decades, APEC projects the region’s economy would grow at half the pace in our baseline projection. This would result in output (real GDP) being $15 billion, or 11%, lower in 2040 than our baseline scenario.
Investments in Capital, Skills and Productivity Required
Investment in buildings, machinery, equipment, software and skills upgrading are vital for economic growth. To meet our economic growth projections, we assume that Atlantic productivity growth as a result of these investments will be 0.8% per year, slightly faster than the 0.6% rate achieved between 2006 and 2019.
“If this boost to Atlantic productivity growth is to be achieved by capital investment alone, it could require an increase in annual capital investment of about $5.5 billion,” says Chaundy. Capital investment in Atlantic Canada averaged $14 billion per year over the past decade.
If the region attracts fewer immigrants than we anticipate, the region will need to achieve even faster productivity growth to achieve our economic growth projections.
Greater Participation and Inclusion Is Important
The region’s overall labour force participation rate – the proportion of the population aged 15 and older who are available and looking for work – will fall from 60% in 2019 to 56% by 2040 if participation rates remain the same for each age group. This is because there will be more seniors and their participation rate in 2019 was only 12%, compared with 86% for those aged 25-55 years.
There are several ways to increase labour force participation and employment for those currently in the Atlantic region. These include raising participation rates for women, older workers, people with disabilities, and reducing unemployment rates for Indigenous and black Atlantic Canadians. A variety of policies and initiatives will be required to reduce barriers to participation and employment.
APEC’s Looking Ahead series is designed to assess Atlantic Canada’s demographic and economic future, and to stimulate informed discussion on how stakeholders can best respond. Past and current bulletins are available on APEC’s website atwww.apec-econ.ca/lookingahead
APEC’s President and CEO, David Chaundy, will be sharing further details of APEC’s economic and demographic projections in afree webinar on Atlantic Canada’s Economic and Demographic Future,this Thursday, March 25.
To schedule an interview with APEC’s President and CEO, David Chaundy, please contact: