Halifax Index 2023

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CONFIDENCE DOWN BUT HALIFAX’S ECONOMY CONTINUES TO GROW

Halifax’s real GDP grew by 3.3% in 2022 and positive growth, though at a lower rate, is expected to continue through to 2027.

The Halifax Gateway had a rebound year in 2022. There was large growth in air-passenger numbers, plane movements, cruise passengers and ships, air cargo, and port cargo. Overnight stays across Halifax hotels reached their highest number on record, and stays at room shares have almost returned to pre-pandemic levels.

Nova Scotia continues to trail other provinces on measures of capital investment, business research and development, and labour productivity.

Municipal and provincial debt levels continue to rise. Nova Scotia has a net debt per capita of $17,833. Halifax’s municipal debt is expected to be $194.5 million in 2023-24, with a debt-servicing cost of $36.6 million.

Halifax Index 2023
Economic Growth

Following pandemic-rebound growth of 6.5% in 2021, real GDP in Halifax grew by a robust 3.3% in 2022. The city did not, however, retain its number-one spot as the centre with the largest GDP growth in Canada. Across benchmark cities, Halifax fell to sixth place. According to the Conference Board of Canada, Halifax will maintain growth with a 1.2% increase in 2023, followed by an annual average growth of 2.0% from 2024 through 2027.

Retail sales in Halifax grew by 8.8% in 2022 with a sales value of $21,878 per capita. The Conference Board of Canada forecasts show growth of 1.9% in 2023 and then 3.2% per year on average for the 2024-2027 period. Note, though, that these retail sales figures are expressed in current dollars, and the growth in these figures can be attributed to both pent-up demand and price inflation.

Manufacturing sales1increased by 5.1% in 2022 and reached an all-time high of $3.19 billion. Following small dips in 2020, sales of both durable and non-durable goods increased in 2021 and 2022.

Consumer confidence in Halifax, as measured by Narrative Research’s Consumer Confidence Index, closed 2022 at an all-time low of 57.4. This reflects the impact of the pandemic, the onset of multi-decade high levels of inflation, and the Bank of Canada’s interest-rate hikes. With inflation slowing, consumer confidence has climbed back up to 71.0 as of Q1 2023.

(f): Forecasted
Source: Conference Board of Canada, Major City Insights (Winter 2023)

Real GDP Growth by City

  • After 6.5% growth in 2021, the fastest across Canadian cities, Halifax’s real GDP increased a further 3.3% in 2022, sixth fastest across benchmark cities.
  • According to the Conference Board of Canada, Halifax will see its real GDP grow by 1.2% in 2023 and then experience an average annual growth rate of 2.0% from 2024 to 2027.

Source: Conference Board of Canada, Major City Insights (Winter 2023) and Statistics Canada, Annual Demographic Estimates, Table 17-10-0135-01

Growth in Retail Sales and Per Capita Sales

  • Retail sales in Halifax grew by 8.8% in 2022, landing it in eighth place across the 10 benchmark cities. This followed retail sales growth of 19.6% in 2021, by far the fastest in the country.
  • Retail sales in Halifax had a per capita value of $21,878 in 2022, fourth across benchmark cities.
  • As Halifax emerges from the pandemic’s shadow and as inflation cools, 2023 is expected to be a year of slower retail sales (+1.9%) followed by average annual growth of 3.2% from 2024 to 2027.

Source: Statistics Canada, Monthly Survey of Manufacturing, Table 16-10-0011-01

Manufacturing Sales by Type

  • Manufacturing sales in Halifax reached a new high of $3.19 billion in 2022, growing by 5.1%. This was preceded by growth of 15.7% in 2021, following a 1.0% decline in 2020.
  • Durable goods, such as wood products, non-metallic mineral products, metals, and electronic equipment, have consistently made up about 60% of manufacturing sales since 2018. After miscellaneous manufacturing, the largest sales values for durable goods in Halifax were generated by fabricated metal product manufacturing and computer and electronic product manufacturing.
  • Non-durable goods including food, beverage, and tobacco products as well as petroleum and coal products made up the other 40% of sales over the same period. The largest sales value for non-durable goods in Halifax came from food manufacturing.

The Consumer Confidence Index is a composite of 5 questions on household economic well-being and expectations around the economy.

Source: Narrative Research, Consumer Confidence Index (Various)

Consumer Confidence Index

  • Halifax closed 2022 with consumer confidence at its lowest recorded level ever with an Index value of only 57.4.
  • The drop in consumer confidence started in 2020 when the pandemic began and declined 20.1 points from Q4 2019 to Q4 2020.
  • As health restrictions eased, confidence climbed 6.1 points between Q1 2021 and Q3 2021. However, with high inflation and rising interest rates, confidence declined again by 30.5 points between Q4 2021 and Q4 2022.
  • As 2023 started, inflation showed signs of abating and interest rates remained stable. Consumer confidence climbed up to 71.0 as of Q1 2023.

Halifax Index 2023
Business Confidence

Halifax Partnership’s Business Confidence Survey, carried out by Narrative Research, gathers views from business owners on Halifax’s economy. The Business Confidence Index (BCI), calculated on a scale of -100 to +100, is based on five questions that span the past, current, and future performance of Halifax’s economy.

Halifax’s 2023 BCI score was 30.4, down 11.6 from 42.0 a year earlier. This is the lowest BCI score since 2017 when it was 29.1. Asked to rate Halifax as a place to do business, 12.5% of businesses rated Halifax below average, double that of 2022. About 55.0% said the city was average, while 28.8% said above average.

As with the 2022 survey results, connections to universities and colleges (79.8%), workplace-safety culture (78.5%), and quality of life of residents (73.5%) were the three aspects of doing business in Halifax cited most frequently as advantages. These three also had the highest net advantage2scores.

The three aspects of doing business in Halifax that were seen as the greatest net disadvantages3were cost of living for residents (79.0%), energy costs (71.9%), and the tax environment (68.0%). The cost of real estate or office rent and access to health care were also seen as disadvantages by 68.4% and 64.2% of businesses, respectively.

Some areas saw major declines over the past few years. Cost of living for residents, which was a net advantage in 2018 and 2019, had the highest net disadvantage score in 2023. Availability of labour also changed from a net advantage to a net disadvantage, while the cost of labour, though still a net advantage, saw a decline of close to 30 points in its score since 2020.

RATINGS OF BUSINESS CONFIDENCE
Index (-100 to +100) and Share of Business-Owner Respondents, Halifax, 2013 to 2023

Year

BCI

Rating Halifax as a Place to Do Business

Above Average

Just Average

Below Average

Don’t Know/No Answer

Spring 2013

24.6

19.0%

59.0%

18.0%

4.0%

Spring 2014

20.2

14.0%

66.0%

17.0%

4.0%

Spring 2015

21.1

15.0%

61.0%

19.9%

4.1%

Spring 2016

28.1

25.7%

55.3%

13.9%

5.2%

Spring 2017

29.1

23.1%

60.2%

12.3%

4.4%

Spring 2018

32.9

27.0%

57.3%

12.4%

3.3%

Spring 2019

32.8

26.3%

60.8%

9.7%

3.2%

Spring 2020

34.9

31.5%

55.0%

9.8%

3.7%

Spring 2021

37.5

39.5%

52.3%

6.5%

1.6%

Spring 2022

42.0

39.4%

50.2%

6.6%

3.7%

Spring 2023

30.4 28.8% 55.0% 12.5% 3.6%

Question: “All things considered, how would you rate the city of Halifax as a place to do business? Would you say Halifax is above average, just average, or below average as a place to do business?
Source: Narrative Research, Business Confidence Survey (Various)

Business Confidence

  • The Business Confidence Index fell to 30.4 in 2023 down 11.6 points from a year ago. Rising prices and associated interest-rate increases over the last year have no doubt played a key role in this decline.
  • The 2023 BCI score in Halifax is the lowest since 2017 when it was 29.1.
  • The share of businesses that rate Halifax as an above average place to do business fell by 10.6 percentage points, whereas the share of those that rate Halifax as just average and below average increased by 4.8 and 5.9 percentage points, respectively.



Question: "Would you say the following aspects of Halifax present a [listed responses] for your business?"

Source: Narrative Research, Business Confidence Survey (2023)

Ratings of Factors Affecting Businesses

  • Net advantage scores are derived for each aspect of doing business in Halifax by adding the shares who rated it an advantage and subtracting the shares who rated it as a disadvantage.
  • Availability of connections to universities and colleges (+70.4%), workplace safety and culture (+70.4%), and quality of life of residents (+50.8%) were ranked as the top three aspects of doing business in Halifax.
  • Conversely, the cost of living for residents (-61.7%), energy costs (-52.9%), and the tax environment (-47.6%) were seen as the three greatest net disadvantages by Halifax businesses.
  • Quality of life of residents, which most businesses considered to be Halifax’s most advantageous aspect until 2021, saw its net advantage score decline by 13.2 percentage points in 2022 and by a further 17.6 percentage points in 2023.

Question: "Would you say the following aspects of Halifax present a [listed responses] for your business? [Cost of Living]"

Source: Narrative Research, Business Confidence Survey (Various)

Rating of Cost of Living as an Aspect of Doing Business

  • The share of businesses that consider the cost of living of residents to be a major disadvantage grew to 40.4% in 2023. This is up 10.9 percentage points from 2022 and 33.6 percentage points since data collection began in 2018.
  • Cost of living of residents also had the highest net disadvantage score in 2023 (-61.7%) taking over the bottom spot from energy costs (-52.9%).
  • At 3.6%, the share of businesses that consider Halifax’s cost of living to be a major advantage has never been smaller.

Question: "Would you say the following aspects of Halifax present a [listed responses] for your business? [Cost of Labour]"

Source: Narrative Research, Business Confidence Survey (Various)

Rating of Cost of Labour as an Aspect of Doing Business

  • The net advantage score for the cost of labour was +4.9% in 2023. This is up from +3.8% in 2022, but down from +38.7% in 2021.
  • The share of businesses that consider this aspect a major, moderate, or minor disadvantage was 42.8%, up 15.4 percentage points from pre-pandemic 2020.
  • In 2020, 60.2% of businesses considered the cost of labour in Halifax an advantage. This share dropped to 47.7% in 2023.

Question: "Would you say the following aspects of Halifax present a [listed responses] for your business? [Availability of Labour]"

Source: Narrative Research, Business Confidence Survey (Various)

Rating of Availability of Labour as an Aspect of Doing Business

  • Availability of labour has become a widely publicized concern, and this was reflected in the survey with a net disadvantage score of -18.0%, down from -15.8% in 2022. This aspect actually had a net advantage score of +14.3% in 2018.
  • The overall share of businesses that consider availability of labour to be a major, moderate, or minor disadvantage has never been higher at 55.2%, while 37.3% still consider it an advantage.

Halifax Index 2023
Halifax Gateway

The Halifax Gateway includes the Port of Halifax, Halifax Stanfield International Airport, the Halifax Logistics Park, the Port of Sheet Harbour, and CN’s transportation infrastructure, all of which saw increased activity in 2022.

At Halifax Stanfield, air passengers and air cargo grew by 188.6% and 6.4%, respectively, over 2021 levels. The airport served 3.11 million passengers and transported 36,979 metric tonnes of cargo.

Cargo shipped through the Halifax Port Authority (HPA) saw an increase of 1.0% in 2022. The 601,700 20-foot-equivalent-units (TEUs) shipped through HPA in 2022 are the most ever recorded. Port-wide cargo saw an increase of 8.7% in 2022. Cargo throughput was 9.74 million metric tonnes.

Another aspect of the Halifax Gateway that saw welcome change was the cruise industry. After two years of no cruise ships or passengers landing on our shores, 2022 saw 239,493 cruise passengers visiting Halifax on 148 cruise ships.

HALIFAX GATEWAY ACTIVITIES
Units Indicated in Table, Halifax, 2015 to 2022

Year

Air Passengers (En/Deplaned)

Plane Movements (Itinerant)

Cruise Passengers

Cruise Ships

Port Cargo (Metric Tonnes)

HPA Port Cargo (TEUs)

Air Cargo (Metric Tonnes)

2015

3,702,705

78,295

222,309

141

7,569,286

418,359

32,000

2016

3,908,799

80,332

238,217

136

8,272,345

480,722

33,329

2017

4,083,188

78,972

292,722

173

8,902,348

559,242

34,051

2018

4,316,079

78,264

316,869

198

8,990,289

547,445

36,938

2019

4,188,443

74,708

323,709

179

8,622,250

546,691

41,129

2020

995,426

31,057

0

0

8,273,457

507,185

32,984

2021

1,076,45829,301008,962,430595,75134,769
20223,107,11948,725239,4931489,744,497601,70036,979

Source: Various including Statistics Canada, Port of Halifax, Halifax Stanfield International Airport

Halifax Gateway

  • Halifax Stanfield International Airport served 3.11 million passengers in 2022, 188.6% (+2.03 million) more than in 2021. However, passenger numbers have not recovered yet to pre-pandemic levels.
  • Cruises returned to Halifax in 2022 with the city welcoming 239,493 passengers on 148 cruise ships.
  • Halifax broke records in 2022 for port-wide cargo, which increased 8.7% to 9.74 million metric tonnes, and for HPA port cargo, which increased 1.0% for a total of 601,700 20-foot- equivalent-units (TEUs).
  • Air cargo going through Halifax Stanfield increased 6.4% in 2022 with 36,979 metric tonnes being serviced.

DOWNLOAD THE DATA: HALIFAX-GATEWAY.XLSX

Halifax Index 2023
Tourism

After the pandemic led to massive declines in overnight hotel stays in 2020, Halifax grew to new highs in 2021 and 2022. There were 1.92 million overnight stays in 2022, 2.3% more than the previous high in 2019. Overnight stays at traditional hotels grew 68.8% over 2021 and were 4.6% above the previous high set in 2019. Room-share stays grew 65.4% over 2021 and were only 6.0% below 2019 numbers. This trend is expected to continue nationally. Forecasters such as Destination Canada and the Conference Board of Canada’s Tourism Research Institute predict strong tourism growth for the country in 2024.

The supply of hotel rooms in Halifax saw another year of growth in 2022 with 62 new rooms added. The annual growth rate for new rooms has fallen every year since 2018 but remains positive. Discover Halifax notes that supply challenges remain the number one obstacle for growth within the industry, with constraints on hotel-room supply and rental cars, air access, and tight labour markets across North America.

There may be additional uncertainty around supply with conversions such as the Hogan Court hotel under construction in Bedford. This property was purchased by the Province of Nova Scotia for conversion to a transitional care unit. However, according to Discover Halifax, there is still a strong portfolio of hotel investments and new builds at various stages of construction.

Looking at active businesses in the Nova Scotia tourism industry, the majority (1,282) are in the food and beverages sector, followed by recreation and entertainment (318) and accommodation (285). The rest of the industry is composed of businesses related to travel services and transportation.

Source: Discover Halifax, Year-End Key Performance Indicators

Overnight Stays in Hotels and Room Shares

  • Total overnight room stays in Halifax grew 68.1% in 2022 to 1.92 million room nights. This is the highest number of overnight stays Halifax has ever seen, beating the previous high of 2019 by 42,713.
  • Overnight stays at traditional hotels reached a record-high of 1.53 million – growing 68.8% over 2021. Stays at room shares did not overtake the record set in 2019 but were the second highest on record at 391,501, up 65.4% over 2021.

Source: Discover Halifax, Year-End Key Performance Indicators

Hotel Room Supply

  • 62 new hotel rooms were added in 2022 to bring the total to 6,398 across Halifax.
  • The annual growth in the number of hotel rooms has been slowing in recent years, falling to 1.0% in 2022, down from 3.0% in 2021, 4.5% in 2020, and 6.2% in 2019.

Source: Statistics Canada, Longitudinal Employment Analysis Program, Table 33-10-0270-01

Tourism Industry Business Counts

  • As of December 2022, Nova Scotia had 2,026 active businesses in the tourism industry. The number of businesses took a noticeable dip during the pandemic but has largely recovered to its previous stability.
  • Most of the businesses (63.3%) in the tourism industry were food and beverage services. Recreation and entertainment and accommodation represented 15.7% and 14.1% of the industry, respectively. The remaining businesses were in tourism transportation (5.6%) and travel services (1.4%).

Halifax Index 2023
Productivity

Rising productivity, generating more output per amount of input, is crucial to improving the standard of living especially in an era of tightening labour markets. The state of infrastructure, the quantity and quality of machinery and equipment, the effort and resources put into innovation, and the skill level of the labour force all contribute to productivity.

The Partnership’s annual Business Confidence Survey, carried out by Narrative Research, asks businesses about their intentions to engage in activities that can improve productivity. Fewer businesses expect to diversify their supply chains (-3.2 pp) or introduce a new product or service (-1.4 pp) in 2023 compared with previous surveys. However, there were small increases over 2022 in the shares of businesses who expect to make use of cutting-edge technology (+2.0), invest in R&D (+1.7 pp), enter a new market outside Atlantic Canada (+0.3 pp), and invest in facilities and equipment (+0.1 pp).

Capital expenditure per capita in Nova Scotia increased by 17.7% to $5,036 in 2022. Although the growth rate was the second largest across all provinces, the dollar value of capital expenditure was the lowest. Nova Scotia also has some of some of the oldest capital stock on average in the country. Non-residential assets like buildings, highways, machinery, and equipment had an aggregate average age of 12.1 years in Nova Scotia, the second oldest in Canada after New Brunswick (12.5 years). These assets have about 51.9% of their service life remaining, which is also the worst across provinces.

The most recent R&D data available are from 2020. On a per available worker basis, Nova Scotia’s business sector performed $364 of research and development in 2020, less than one-third of the national figure and third lowest across the 10 provinces.

Nova Scotia’s labour productivity declined by 1.4% in 2022 to a per-hour dollar value of $47.90. The most adversely affected jobs during the pandemic were in low-wage service industries, which typically make up a relatively small share of total economic output. Jobs in higher-wage sectors, which typically represent a larger share of total output, did not suffer massive losses in hours worked as they often were able to transition to remote work. Hence, with the decline in hours worked being much higher than the decline in total economic output, productivity calculated in dollars per hour worked soared in 2020. In 2022, productivity numbers dropped for all provinces except Manitoba (+2.8%) and Saskatchewan (+1.6%). Overall, Nova Scotia’s productivity per hour of work is headed in the right direction since the 2022 figures were higher than their pre-pandemic levels.

INTENDED BUSINESS ACTIVITIES OVER NEXT YEAR
Share of Business-Owner Respondents, Halifax, 2014 to 2023
Business Activity
2014201520162017201820192020202120222023
Increase sales75.0%72.4%80.2%82.4%85.6%85.2%86.3%79.1%88.0%80.3%
Hire additional staff53.0%51.5%59.3%60.4%66.9%67.5%65.4%59.0%73.2%65.0%
Increase employee training------71.6%62.0%66.0%63.8%
Introduce a new product or service52.0%47.0%48.5%51.0%54.4%55.8%61.9%50.7%58.0%56.6%
Make a major investment in facilities or equipment*30.0%32.8%28.9%34.8%46.7%44.8%48.0%47.0%42.8%42.9%
Diversify supply chain--------41.1%37.9%
Enter a new market outside Atlantic Canada27.0%31.3%24.1%27.6%29.0%28.3%29.4%25.1%24.2%24.5%
Make a major investment in R&D*12.0%12.3%13.6%11.0%22.7%21.3%22.7%21.0%21.6%23.3%
Utilize cutting-edge technology**-----24.4%28.2%24.2%21.2%23.2%
Downsize or reduce staff8.0%11.1%9.7%7.4%8.0%6.6%8.8%7.6%9.1%5.3%

*An investment greater than 2% of annual revenues.
**Examples provided to respondent: artificial intelligence, big data, 3D printing, and smart sensors.

Question: “Over the next 12 months in your Halifax business operations, do you expect that your company will…

Source: Narrative Research, Business Confidence Survey (Various)

Business Intentions

  • In 2023, slightly larger shares of businesses expect to utilize cutting-edge technology (+2.0pp), make a major investment in R&D (+1.7pp), enter a new market outside Atlantic Canada (+0.3pp), and/or make a major investment in facilities or equipment (+0.1%) compared to 2022.
  • The shares of businesses intending to introduce a new product or service and intending to diversify their supply chains have fallen by 1.4 and 3.2 percentage points, respectively.
  • The Partnership’s survey found that 65.0% of businesses intend to hire additional staff in 2023, 8.2 percentage points lower than in 2022. Over the same period, the share of businesses who intend to downsize also fell from 9.1% to 5.3%, the lowest since the survey began.
  • The share of businesses who expect to increase sales fell in 2023 to 80.3% from 88.0% in 2022. The 2023 share is only 1.2 percentage points higher than the pandemic-low of 79.1% seen in 2020, but it is still 7.9 percentage points higher than the record-low of 72.4% in 2015.

*Capital expenditures are calculated using preliminary data for 2022.

Source: Statistics Canada, Annual Capital and Repair Expenditures Survey, Table 34-10-0035-01 and Statistics Canada, Annual Demographic Estimates, Table 17-10-0005-01

Capital Expenditure per Capita

  • As in 2021, capital investment per capita in Nova Scotia was the lowest across all provinces in 2022.
  • At $5,036, Nova Scotia’s investment per capita increased by 17.7% (+$759) in 2022, which was the second-largest increase after Saskatchewan’s 18.3% increase.
  • After declining by 16.5% between 2010 and 2020, capital investment per capita has grown for two successive years for a combined growth of 27.7% since 2020.

Service life and age calculations were based on current prices.

Source: Statistics Canada, Stock and Consumption of Fixed Non-residential Capital, Table 34-10-0166-01

Capital Service Life Ratio

  • The age and remaining life of a jurisdiction’s capital stock provides insight into the quality of that capital (older capital stock may be less efficient and productive) and future cost burdens (the cost of replacement will have to be faced more quickly for older capital stock).
  • The average age of non-residential capital in Nova Scotia was 12.1 years in 2021, the second oldest across all provinces.
  • Nova Scotia’s average non-residential asset has 51.9% of its service life remaining, tied for bottom place with New Brunswick.

Source: Statistics Canada, Various, Table 27-10-0273-01 and Statistics Canada, Labour Force Survey, Table 14-10-0393-01

Business R&D Performed per Available Worker

  • Business research and development is a critical driver of innovation. The most recent data available at a provincial level are for 2020.
  • On a per available worker basis, Nova Scotia’s business sector performed $364 of R&D, less than one-third of the national figure. Only New Brunswick’s and Prince Edward Island’s business sectors had lower figures.
  • Nova Scotia has consistently been near the bottom of the rankings on this business R&D metric over the past decade.
  • Nova Scotia ranked third in 2020 on R&D per available worker in the post-secondary sector and sixth across all types of performers.

Source: Statistics Canada, Productivity Measures, Table 36-10-0480-01

Labour Productivity by Province

  • Productivity levels in dollars of output per hour worked declined for all provinces and the country in 2022, except in Manitoba and Saskatchewan.
  • At $47.90 per hour, Nova Scotia’s labour productivity was the second lowest in the country falling by 1.4% since 2021.
  • The declines in labour productivity in 2022 came after productivity increased to record highs in 2020 as a result of the asymmetric effects of the pandemic on the labour market. Job losses and reduced hours were concentrated in lower-wage/lower-output industries that require in-person service, whereas most high-wage/high-output industries simply shifted to remote-working arrangements. Hence, productivity numbers were temporarily inflated in 2020 by the larger decreases in the number of hours worked by those in low-wage industries.

Halifax Index 2023
Startups

Over the course of 2022, medical technology companies in Halifax were on track for a fantastic year, but on December 6, 2022, an announcement from ABK Biomedical sealed the deal. The Halifax medtech company, which grew out of research carried out at Dalhousie University, revealed it had closed a US$30 million (C$40.3 million) funding round. It was the company’s second round of that size in three years.

ABK may be the shiniest example of what is happening in medtech in the Nova Scotian capital these days, but it is not alone. Halifax now boasts more than 40 companies producing digital products to improve the delivery of health care.

In 2022, these companies together attracted $60.3 million in investment capital and formed the cornerstone of medtech startup activity in the city. They employed 400 people by Entrevestor’s estimate, up 9% from the previous year. It was a strong performance for a segment of the innovation community that had been barely mentioned in previous years.

The medtech group was one of the bright lights in a startup community that produced an impressive – but imperfect – record in 2022. The biggest challenges were the slowdown in job growth and the size of the community overall. Halifax should celebrate the fact that local startups now employ nearly 4,000 people, but it should be noted that hiring slowed dramatically late in the year. Entrevestor estimates that employment overall grew by about 6.1%, less than one-fifth of the pace in 2021. The total number of startups in the city increased by 7.9% to 313 – considered a slow year by Entrevestor.

What was astonishing in 2022 was the strong flow of funding and investment into Halifax-based companies even though the global economy was experiencing problems. Companies completing Entrevestor’s survey reported a 46% increase in revenue on a weighted-average basis. Many of the city’s largest innovation-driven companies experienced huge gains in sales. For example, in April, industrial algae company Mara Renewables raised $39.5 million (the city’s second largest venture capital (VC) round in 2022). The key factor in closing the deal was the company’s outstanding revenue growth.

A stock market transaction led fundraising in 2022: Dartmouth-based Meta Materials Inc. sold US$50 million, about C$64 million, of stock in part to finance its acquisition of Devens, Massachusetts-based Optodot Corp. Including that deal, Halifax companies raised $222.4 million in equity capital in 2022, including $137.9 million in VC.

Though employment growth slowed and failures increased in 2022, Halifax’s innovators are benefiting from a strong flow of capital and have been using it to boost revenues.

For more information on startups in Halifax and across Atlantic Canada, see Entrevestor's 2022 Startup Data Report.

Halifax Innovation Sector Highlights
Units Indicated in Table, Halifax, 2021 and 2022
Number of Startups
(Enterprises)
New Companies
(Enterprises)
Failures
(Enterprises)
Revenue Growth
(% Change)
Total Funding
($ Millions)
2021290
34
40

42%

$307.5
2022313

43

2746%$222.4

Source: Entrevestor, Custom Request

Highlights

  • Halifax added 43 new startup companies in 2022 increasing the total number to 313.
  • There were 13 fewer failures in 2022 than in 2021; in all, 27 companies closed shop.
  • Halifax’s startup community grew its revenue by 46% in 2022 compared to 42% in 2021. This occurred despite a US$85.1 million decline in total funding across startups.

Source: Entrevestor, Custom Request

Employment at Startups

  • Halifax’s startups employed 3,875 people in 2022. This represents growth of 6.1% over 2021 and 171.5% since Entrevestor’s records began in 2016.
  • Employment at startups has had a cumulative average growth rate of 18.1% per year since 2016. 2022 was the first year on record when the percentage growth in employment was not in double digits. In fact, before 2022, the rate had never dipped below 14%.

Source: Entrevestor, Custom Request

New Startup Companies

  • Halifax added 43 new startup companies in 2022, nine more (+26.5%) than in 2021.
  • 2019 remains the peak year for new companies (62) joining the ecosystem.
  • On average, Halifax has been adding 42 new companies each year since 2017.

Source: Entrevestor, Custom Request

Annual Equity Funding

  • Annual equity funding for Halifax’s companies declined 27.7% over 2021. Halifax’s startups received $85.1 million less in equity funding yet still grew their revenue by 46%.
  • While 65% of the equity funding received in 2021 came from what Meta Materials raised on the stock market, most of 2022’s equity funding was spread more widely across Halifax’s startup community.

*An enterprise was included if it had one or more of its leadership team (e.g. Founder, Co-Founder, CEO) who identified as a member of these groups.

Source: Entrevestor, Custom Request

Leadership Diversity at Startups

  • Immigrants owned 91 (29.1%) of the startups in Halifax, 20 more than in 2021.
  • 72 (23.0%) companies had female owners compared to 58 (20.0%) in 2021.
  • There was one more Black-owned startup in 2022 than in 2021 bringing the total number to six (1.9%). The change was the same for Indigenous owners who now own three (1.0%) startups, one more than in 2021.

Halifax Index 2023
Government

Government plays a key role in Halifax’s economy. It is the largest employer provincially and municipally, and it makes major capital investments. The importance of government to the economy was never more evident than during the pandemic when significant fiscal measures were implemented to support the economy and the business community.

With the substantial investments required to keep the economy afloat through the pandemic, the Nova Scotia government saw its net-debt-to-GDP ratio increase to 35.0% in 2020-21. However, this has declined over the last two fiscal years and is expected to reach its lowest level in over 30 years in 2022-23, at 32.5%. Across provinces, Nova Scotia’s net-debt-to-GDP ratio is in fifth place with a per capita debt of $17,833.

Municipal revenue in 2022-23 grew by 5.4% to a total of $1.11 billion with a further 5.5% expected increase in 2023-24. Property taxes (excluding deed-transfer taxes) remain the largest source of revenue at roughly 75% ($827.7 million) in 2022-23. This is followed by other revenues (e.g., transfers from other governments, interest revenues, fee revenues, and other sources) at 13.7% or $151.7 million.

Following a 9.8% increase in 2022-23, the municipal government’s gross expenditures are budgeted to increase by 6.0% in 2023-24. The department with the largest share of the budget is expected to be Corporate Services (Fiscal) at 21.0%. In terms of budget changes, Other Governmental Support Services4is expected to see the largest increase (+10.2%) while Planning and Development’s budget is expected to drop 9.1%, a decrease of about $2.5 million.

The outstanding debt balance in 2023-24 is forecasted to grow by $8.7 million (+4.7%). With the increase in the debt balance, associated debt-servicing costs are expected to rise by $1.5 million as well.

(f): Forecast data

Source: Province of Nova Scotia, Provincial Budget (Various)

Provincial Net Debt-to-GDP Ratio

  • Nova Scotia’s net-debt-to-GDP ratio dropped to 32.5% in 2022-23. This is the lowest since 1991-92.
  • The province’s net-debt-to-GDP ratio fell 5.3 percentage points between 2013-14 and 2019-20, but pandemic-related expenses caused it to break the trend and increase by 2.2 percentage points in 2020-21. However, the long-term trend has resumed. The ratio declined 2.5 percentage points over the last two years.
  • Net-debt-to-GDP is expected to increase to 36.2% by 2026-27, an increase of 3.7 percentage points from 2022-23.

Source: Scotiabank Economics, Economics Publications - Fiscal Policy

Provincial Net Debt Comparisons

  • Provincial budgets for 2023-24 show that Nova Scotia was fifth highest across provinces both for net-debt-to-GDP ratio (32.5%) and net debt per capita ($17,833) in fiscal year 2022-23.
  • Nova Scotia’s net debt per capita increased by $1,076 between 2021-22 and 2022-23.

(f): Forecast data

Source: Halifax Regional Municipality, Finance and Asset Management

Municipal Revenue by Source

  • Halifax’s municipal revenue increased 1.7% in 2021-22 and is expected to increase by another 5.4% in 2022-23. This will be followed by another 5.5% increase in 2023-24.
  • The main source for municipal revenue remains property taxes (excluding deed-transfer taxes), which have consistently made up about 75% of total revenue since 2014-15 and are expected to do so in 2023-24.
  • Similarly, other revenues, which include transfers from other governments, interest revenues, fee revenues, and other sources, continue to be the second-largest source generating about 13.0% of municipal revenue in 2021-22 and an expected 13.6% in 2022-23.
  • Revenues from deed-transfer taxes, forecast to be $76.0 million, are expected to decline 6.5% in 2022-23 but will still make up 6.8% of total revenue.
  • Tax agreements and payments in lieu of taxes are expected to make up about 5.0% of revenue as they have since 2014-15.

(f): Forecast data
In the April 2023 budget, HRM debt stock were re-stated for actual debentures issued.

Source: Halifax Regional Municipality, Finance and Asset Management

Municipal Debt Balance and Service Costs

  • After falling by $36.5 million in 2021-22, Halifax’s outstanding debt balance increased by $54.5 million in 2022-23 taking the total to $185.8 million.
  • The increase in outstanding debt resulted in a debt-servicing cost of $35.1 million for 2022-23, an increase of $6.1 million over the previous period.
  • The outstanding debt balance is expected to increase by $8.7 million in 2023-24 followed by a decline of $10.4 million in 2024-25. The associated servicing cost is expected to increase by $5.8 million over the same two-year period.

Budget data reflect a forecast for the 2023-24 fiscal year.

Source: Halifax Regional Municipality, Finance and Asset Management

Municipal Spending by Department

  • Municipal spending is expected to increase by 6.0% in 2023-24 to $1.17 billion.
  • The largest share of spending (21.0%) is expected to be on Corporates Services (Fiscal) followed by Mandatory Provincial Costs (16.4%), Halifax Transit (11.2%), and Public Works (10.6%).
  • The largest changes in spendings are expected to be in Other Governmental Support Services4(+10.2%), Property Fleet and Environment (+9.7%), and Fire and Emergency Services (+8.9%). The only department with an expected decrease in spending is Planning and Development (-9.1%).

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