Halifax Index 2024

Economy

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GROWTH CONTINUES BUT PRODUCTIVITY LAGS

Many sectors of the economy showed strong growth in 2023. The manufacturing sector saw 4.5% growth in gross sales. Air and sea cargo grew 6.6% and 1.2%, respectively, with the latter reaching a record high. The tourism industry prospered with overnight stays increasing 5.4%; air and cruise passenger numbers grew by double-digits. The overall size of the economy increased.

However, measures of the economy more directly connected to our living standards declined. Nova Scotia ranked near the bottom of provinces across a wide array of productivity measures and productivity improvement was outpaced by competitors. This has meant slow growth in real GDP and declining real GDP per capita.

According to the Conference Board of Canada, real GDP grew by 1.4% in 2022 and is expected to grow by only 0.8% in 2023. Given the significant concurrent population growth, real GDP per capita decreased by -2.6% in 2023.

This stall in productivity (and consequently living standards) can be felt in public sentiment. Fewer consumers and businesses expressed confidence in Halifax’s economy. Narrative Research’s Consumer Confidence Index only marginally rebounded from its all-time low in Q4 2022. Similarly, Halifax Partnership’s Business Confidence Index fell to its lowest level since 2015. An increasing share of businesses point to the cost of living and cost of labour as disadvantages to doing business in Halifax.

Halifax Index 2024
Growth

Growth in real gross domestic product (GDP), the annual sum of goods and services produced, is a key metric for tracking the health of an economy. Population growth is also important as more people typically implies more workers, which in turn means higher levels of production. When population growth exceeds GDP growth, however, GDP per capita falls. This is problematic because GDP per capita, the annual amount of goods and services that each person is able to enjoy, is the metric that best tracks material standard of living. When GDP per capita falls, so do average living standards.

Halifax experienced positive real GDP growth in 2023 and an increase is forecasted for 2024. However, Halifax was only in the middle of the pack among benchmark cities in both cases. This tepid economic growth coupled with record-setting population growth generated declines in real GDP per capita. If population growth remains vigorous, productivity will need to improve substantially to reverse the downward trend in our material standard of living.

Retail sales in Halifax grew by 2.8% from 2022 to 2023, while manufacturing sales,1, 2at 4.5%, showed solid growth over 2022. The Atlantic Economic Council forecasts $4.2 billion in major project spending in Halifax in 2024, a 20% increase over 2023. A further increase of 18% is predicted for 2025.

Consumer confidence climbed during the first half of 2023 from an all-time low at the end of 2022. The latter half of the year saw the Consumer Confidence Index fall and then climb again. As 2023 closed, the index remained well below pre-pandemic values.

(f): Forecasted
Source: Conference Board of Canada, Major City Insights (Winter 2024)

Real GDP Growth by City

  • All benchmark cities but St. John’s saw a lower rate of real GDP growth in 2023 from 2022 and most are forecasted to have the same or lower growth in 2024 than in 2023.
  • Halifax’s real GDP growth rate is expected to slow from 1.4% in 2023 to 0.8% in 2024. These figures tie Halifax for fourth-best among benchmark cities in 2023 and place it fifth in 2024.
  • Over the 2025 to 2028 period, Halifax’s projected annual GDP growth is expected to fluctuate within the 2.4% to 2.6% range.

*Halifax Economic Region
**Due to data limitations, figures are based on Major City Insights (Autumn 2023) for St. John's and KCW.
Source: Conference Board of Canada, Major City Insights (Winter 2024) and Statistics Canada, Annual Demographic Estimates, Table 17-10-0148-01

Real GDP per Capita

  • Aside from the pandemic-induced drop in 2020, Halifax has enjoyed consistent annual real GDP growth over the past decade. In recent years, however, population growth has outpaced GDP growth, meaning that GDP per capita has declined.
  • Among benchmark cities, Halifax had the second-lowest GDP per capita in both 2022 and 2023.
  • All benchmark cities experienced a drop in real GDP per capita from 2022 to 2023. Halifax’s decrease of $1,259 (-2.6%) was in the middle of the pack among benchmark cities.

*Halifax Economic Region
**Due to data limitations, figures are based on Major City Insights (Autumn 2023) for St. John’s and KCW.
Source: Conference Board of Canada, Major City Insights (Winter 2024) and Statistics Canada, Annual Demographic Estimates, Table 17-10-0148-01

Growth in Retail Sales and Per Capita Sales

  • Retail sales per capita for Halifax in 2023 were slightly more than $24,000. Only St. John’s and Quebec City had higher figures among benchmark cities.
  • Halifax retail sales grew by 2.8% from 2022 to 2023, the fourth-highest growth rate across benchmark cities. Calgary led with growth of 5.6%.

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

Manufacturing Sales by Type

  • Manufacturing sales for Halifax grew by 4.5% from 2022 to 2023 following 14.9% growth the year before.
  • The durable goods3, 2sector led the way with 6.6% growth in 2023, while the non-durable sector posted a 1.6% growth rate.
  • Close to half of non-durable sales in 2023 came from the manufacturing of food, beverages, and tobacco, while roughly 15% was attributable to plastics and rubber products manufacturing.
  • Fabricated metal products as well as computer and electronic products each accounted for approximately 10 - 15% of durable goods sales in 2023.
  • Certain subcomponents of durable goods manufacturing, such as aerospace manufacturing and shipbuilding, are characterized by a small number of relatively large firms. In these situations, data were suppressed by Statistics Canada to avoid the disclosure of firm-specific information. It is, therefore, difficult to provide additional detailed commentary on the makeup of the durable goods sector.

The Consumer Confidence Index is a composite of five questions on household economic well-being and expectations around the economy.
Source: Narrative Research, Consumer Confidence Index (Various)

Consumer Confidence Index

  • At the end of 2022, consumer confidence in Halifax hit its lowest recorded level since Narrative Research began calculating the Consumer Confidence Index in the 1990s.
  • The index rose sharply in the first quarter of 2023 followed by a smaller increase in the second quarter. The confidence measure then dropped in the third quarter before rebounding somewhat at the end of the year.
  • The Q4 2023 index value was 66.5 – far below pre-pandemic levels.

Halifax Index 2024
Business Confidence

Halifax Partnership’s Business Confidence Survey, carried out by Narrative Research, gathers views from business owners on Halifax’s economy.

In past years, data were gathered via telephone interviews with representatives of 300 Halifax businesses. Response rates for telephone surveys have been declining in the opinion research sector, and in 2024, only half the data were collected via traditional telephonic interviews. The other half were collected via an online survey. Upon completion of the data-gathering, a decision was made to report solely the telephone surveys to allow for consistency with previous editions. So, this year we report the results only of the 150 telephonic surveys. Margins of error around results are accordingly somewhat larger than in past years.

As with residents, business confidence weakened in 2024.

The Business Confidence Index (BCI), which ranges from a scale of -100 to +100, is based on five questions that span the past, current, and future performance of Halifax’s economy.

In 2024, the BCI fell to 25.0, the second consecutive decline and its lowest level since 2015. Asked to rate Halifax as a place to do business, nearly 15% of businesses rated Halifax below average, the highest share since 2015. About 57% said the city was average, while 25% rated it above average.

Ratings of various aspects of doing business in Halifax in 2024 were similar to 2023. Connections to universities and colleges, quality of life for residents, telecommunications and internet services, and Halifax Gateway connections remained at the top of the rankings, while cost of living for residents, the tax environment, and energy costs remained at the bottom.

Across 15 rated aspects, seven aspects were rated as net advantages,4while eight were rated as net disadvantages.5

At -73.6, cost of living for residents registered a new record low for any one aspect across seven years of surveying, and the cost of labour slipped into net negative territory for the first time in 2024. Quality of life for residents remained firmly positive but did drop to a new low.

RATINGS OF BUSINESS CONFIDENCE
Index (-100 to +100) and Share of Business Owner Respondents, Halifax, 2013 to 2024

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%

Spring 2024

25.0

25.0%

56.7%

14.9%

3.4%


Source: Narrative Research, Business Confidence Survey (Various)

Business Confidence

  • The Halifax Business Confidence Index dropped noticeably again in 2024 hitting its lowest level since 2015.
  • It should be noted that this decline in business confidence does not appear to be a phenomenon unique to Halifax. For example, the Bank of Canada’s Business Outlook Survey Indicator, based on a Canada-wide survey of businesses, has shown a similar decline nationally over the past two years.
  • The share of respondents rating Halifax as an above-average place to do business hit its lowest level since 2017, and the share rating Halifax as a below-average place to do business reached its highest level since 2015. The above-average share (25.0%), however, continued to be significantly larger than the below-average share (14.9%).

Question: "Would you say the following aspects of Halifax present a [listed responses] for your business?"
Source: Narrative Research, Business Confidence Survey (2024)

Ratings of Factors Affecting Businesses

  • As in 2023, connections to universities and colleges, quality of life for residents, telecommunications and internet services, and Halifax Gateway connections continued to be the highest-rated aspects of doing business in Halifax.
  • Also similar to 2023 are those aspects at the bottom of the list: cost of living for residents, the tax environment, and energy costs.
  • Net advantage scores are derived for each rated aspect of doing business in Halifax by adding the shares of those who cited an aspect as an advantage then subtracting the sum of the shares who cited the aspect as a disadvantage.
  • Almost all aspects had a lower net rating in 2024 than in 2023, and where increases occurred, they were quite small.
  • There were seven aspects that had a net positive rating and eight that were net negative. When these survey questions were first posed in 2018, only four aspects received net negative ratings.

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

  • Business views on the cost of living for Halifax residents continued to deteriorate in 2024.
  • Almost half (46.8%) of survey respondents rated this aspect as a major disadvantage for doing business in Halifax. It should be noted again, though, that these results are not necessarily unique to Halifax. It is entirely possible that had the same survey been conducted in other Canadian cities, the results may have been highly similar.
  • The net rating for this aspect was -73.6 – the single lowest rating for any aspect over seven years of surveying. In 2018 and 2019, cost of living for residents received a net positive rating.

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

  • For the first time in 2024, the cost of labour received a net negative rating (-5.9).
  • From 2018 through 2021, the net rating for this aspect was above +30.
  • While the share (11.2%) citing cost of labour as a major disadvantage hit an all-time high in 2024, the share citing this aspect of doing business in Halifax as a major advantage rose to its highest level (6.9%) since 2019.

Question: "Would you say the following aspects of Halifax present a [listed responses] for your business? [Quality of Life for Residents]"
Source: Narrative Research, Business Confidence Survey (Various)

Rating of Quality of Life as an Aspect of Doing Business

  • Quality of life for residents has consistently been one of the top-rated aspects of doing business in Halifax.
  • The net rating for this aspect, however, has declined for three consecutive years from a high of +81.6 in 2021 to +34.8 in 2024.
  • The share of respondents rating the quality of life for residents in Halifax as a major disadvantage more than doubled from 5.0% in 2023 to 11.1% in 2024.

Halifax Index 2024
Logistics

Halifax Stanfield International Airport and the Port of Halifax saw continued growth in 2023.

Passenger numbers at Halifax Stanfield were up 15% although the number of itinerant flights6was static over 2022.

Flight, air passenger, and air cargo numbers all remain below pre-pandemic highs.

Air cargo at Halifax Stanfield grew by 6.6% in 2023, while cargo levels through the Port of Halifax reached a new record high in 2023.

Source: Halifax Stanfield International Airport and Statistics Canada, Aircraft Movement Statistics, Table 23-10-0296-01

Airport Passengers and Itinerant Flights

  • The number of flights at Halifax Stanfield International Airport in 2023 was essentially unchanged from 2022.
  • The number of passengers in 2023, however, rose by almost half a million, a 15% increase over 2022.
  • These 2023 figures remained well below pre-pandemic levels.

Source: Halifax Stanfield International Airport, Custom Request

Airport Cargo

  • Air cargo at Halifax Stanfield grew for a third consecutive year rising by 6.7% over 2022.
  • The 2023 air cargo figure is the second-highest on record and was just short of the pre-pandemic high set in 2019.

Source: Port of Halifax, Cargo & Cruise Statistics

Port of Halifax Cargo

  • Cargo movements at Port of Halifax facilities reached a new high in 2023 at 9.9 million metric tonnes.
  • This was a 1.2% increase over the previous record high of 9.7 million metric tonnes in 2022.

Halifax Index 2024
Tourism

Many tourism sector metrics showed strong growth from 2022 to 2023 with figures returning to pre-pandemic levels.

Overnight stays in hotels reached a new high in 2023. The total figure, which includes room shares, was just below the record set in 2019.

Cruise vessel calls and cruise passenger numbers both grew substantially from 2022 to 2023 although figures have not recovered to pre-pandemic levels.

Total hotel room supply in Halifax dipped slightly from 2022 to 2023.

*Due to methodological changes in how room shares are counted, room share figures for 2022 and 2023 have been restated and reduced. Due to data limitations, 2021 and prior years’ entries cannot be restated accordingly.
Source: Discover Halifax, Year-End Key Performance Indicators (Various)

Overnight Stays in Hotels and Room Shares

  • Total overnight room stays in Halifax increased by almost 100,000 from 2022 to 2023, a growth rate of 5.4%. The 1.87 million overnight stays in 2023 fell just short of 2019’s record high of 1.88 million.
  • Two-thirds of this growth, 65,000 overnight stays, came from an increase in traditional hotels, while one-third of the increase, 31,000 overnight stays, was in room shares.
  • The 2023 figure for hotels set a new record high, but the 2023 figure for room shares remained below the record set in 2019.

Source: Discover Halifax, Year-End Key Performance Indicators (Various)

Hotel Room Supply

  • The average daily supply of hotel rooms in Halifax fell by 248 from 2022 to 2023.
  • The average of 6,051 hotel rooms available in 2023 was the lowest level of supply since 2019.
  • The April 2023 conversion of Dartmouth’s DoubleTree hotel and its 204 rooms into a homeless shelter contributed to the decline in hotel room supply.

Source: Port of Halifax, Cargo & Cruise Statistics

Cruise Passengers and Cruise Ships

  • Both the number of cruise vessels calling on Halifax and the number of cruise passengers visiting Halifax increased sharply from 2022 to 2023.
  • The number of cruise passengers grew by over 60,000 (+25%), while the number of vessels jumped by 30 (+20%).
  • The 2023 vessel call figure was essentially the same as in 2019 before the pandemic but not quite as high as the 198 ships that came to Halifax in 2018.
  • The 2023 cruise passenger total exceeded the 300,000 threshold but remained short of the almost 324,000 passengers who visited in 2019.

Halifax Index 2024
Productivity

Canada’s weak performance on productivity measures, as well as the sobering implications of what this means for our current and future standards of living, have been prominent in recent headlines. Previous editions of the Halifax Index have pointed out that Nova Scotia fares poorly in interprovincial comparisons of productivity measures. This situation remains largely unchanged in 2023.

It is heartening to see a significant rise in the share of surveyed Halifax businesses who said they expect to utilize cutting-edge technology in the coming year and also to see no drop in the shares planning to make major investments in facilities, equipment, and R&D.

Less comforting was Nova Scotia’s rank near the bottom among provinces in terms of capital expenditure per capita; business R&D per available worker; and investment per labour force in non-residential buildings, intellectual property products, and engineering construction.

There is some brighter news. Nova Scotia outpaced the national average in annual growth in capital expenditures per capita and ranked fourth among provinces for investment in machinery and equipment.

For this year’s labour productivity metric, the value of output per hour worked was compared across provinces only for service-producing businesses7 rather than for the entire provincial economy. This approach mutes the outsize impact of the oil and gas sector in the three main energy-producing provinces. Even with this adjusted approach, however, Nova Scotia ranked near the bottom of the pack ahead only of the other two Maritime provinces.

Just as stemming the tide of looming population decline became the central rallying cry from the Now or Never (Ivany) report a decade ago, addressing and reversing our stagnant productivity performance is critical to ensuring rising standards of living and improved well-being into the future.

INTENDED BUSINESS ACTIVITIES OVER NEXT YEAR
Share of Business Owner Respondents, Halifax, 2015 to 2024
Business Activity
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Increase sales72.4%80.2%82.4%85.6%85.2%86.3%
79.1%
88.0%
80.3%78.3%
Hire additional staff
51.5%
59.3%
60.4%
66.9%
67.5%
65.4%
59.0%
73.2%
65.0%56.0%
Increase employee training
-
-
-
-
-
71.6%
62.0%
66.0%
63.8%49.4%
Introduce a new product or service
47.0%
48.5%
51.0%
54.4%
55.8%
61.9%
50.7%
58.0%
56.6%49.9%
Make a major investment in facilities or equipment*
32.8%
28.9%
34.8%
46.7%
44.8%
48.0%
47.0%
42.8%
42.9%42.2%
Diversify supply chain
-
-
-
-
-
-
-
41.1%
37.9%33.8%
Enter a new market outside Atlantic Canada
31.3%
24.1%
27.6%
29.0%
28.3%
29.4%
25.1%
24.2%
24.5%25.2%
Make a major investment in R&D*
12.3%
13.6%
11.0%
22.7%
21.3%
22.7%
21.0%
21.6%
23.3%21.2%
Utilize cutting-edge technology**
-
-
-
-
24.4%
28.2%
24.2%
21.2%
23.2%35.5%
Downsize or reduce staff
11.1%
9.7%
7.4%
8.0%
6.6%
8.8%
7.6%
9.1%
5.3%11.9%

*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

  • There is no consistent pattern to changes from 2023 to 2024 in intentions to engage in various business activities.
  • The shares of businesses expecting to make major investments in facilities or equipment and in R&D were stable as were the share expecting to enter a new market.
  • There was a sharp increase in the share of businesses planning to utilize cutting-edge technology like AI, big data, 3D printing, and smart sensors.
  • There also was a jump – to a new record high – in the share of respondents expecting to reduce staff levels. There was also a sizeable decrease in the share planning to hire new staff and increase employee training.

Capital expenditures are calculated using preliminary data for 2023.
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

  • Nova Scotia continued to trail all other provinces in capital expenditure per capita in 2023.
  • Nova Scotia’s expenditure ($5,473) was not even two-thirds of the national figure ($8,446).
  • On a more positive front, Nova Scotia, at +8.4%, ranked in the top half of provinces in growth from 2022 to 2023.

Source: Statistics Canada, Stock and Consumption of Fixed Non-residential Capital, Table 36-10-0098-01 and Statistics Canada, Labour Force Survey, Table 14-10-0327-01

Investment per Labour Force by Asset Type

  • In 2022, Nova Scotia’s total investment per labour force across four broad asset types was ahead of only Manitoba, New Brunswick, and Prince Edward Island. It was less than half of Alberta, which led the country.
  • Nova Scotia ranked near the bottom for investment per labour force in non-residential buildings (8th), intellectual property products (8th), and engineering construction (9th). In these three categories, Nova Scotia’s investment ranged from approximately 50% to 75% of those nationally.
  • In the machinery and equipment category, Nova Scotia fared better with the fourth-highest figure across the ten provinces. Here Nova Scotia exceeded the national figure by 14%.

Source: Statistics Canada, Various, Table 27-10-0273-01 and Statistics Canada, Labour Force Survey, Table 14-10-0327-01

Business R&D Performed per Available Worker

  • Only Prince Edward Island had a lower level of business R&D per worker than Nova Scotia in 2021.
  • Nova Scotia’s $391 per available worker was up from $364 in 2020.
  • The figure for the leading province, Ontario, was more than four times that of Nova Scotia.
  • Compared to the country as a whole, Nova Scotia’s $391 per available worker was less than 30% of the national figure ($1,332).

*This combines the business establishments falling within the North American Industry Classification System (NAICS) codes 41, 44-45, 48-49, 51, 52, 53, 54, 55, 56, 61, 62, 71, 72, and 81 with the exception of the owner-occupied dwelling industry and private households.
Source: Statistics Canada, Productivity Measures, Table 36-10-0480-01

Service-Sector* Labour Productivity by Province

  • Last year’s Halifax Index reported that in 2022, the latest year for which data were available, Nova Scotia ranked ninth among the provinces in terms of labour productivity, ahead of only Prince Edward Island. The three provinces with large oil and gas sectors – Newfoundland and Labrador, Saskatchewan, and Alberta – all had labour-productivity figures far above the other seven provinces as a result of the high value of their energy outputs.
  • Statistics Canada has not yet provided 2023 data points for this metric, so an update of last year’s table is not possible. So, 2022 data are presented again, but this time only for the service-producing businesses sector. This approach diminishes the effect of manufacturing and extractive industries that may be highly concentrated in specific provinces and allows for a more consistent comparison of service industries that vary less across provinces.
  • This approach produces less variance across provinces, with no significant outliers. Even with this approach, Nova Scotia still landed in eighth spot just barely ahead of New Brunswick in ninth and Prince Edward Island in tenth.

Halifax Index 2024
Startups

The innovation economy in Halifax is at an interesting juncture: there were a record number of business failures and new companies in 2023. One reason for optimism is that young ventures continued to find investment capital. While IMV Inc. failed, others like cleantech venture CarbonCure Technologies and manufacturer Site 20/20 made landmark announcements.

On the surface, 2023 witnessed little change in the size of the Halifax startup community. Slightly more than 300 innovation-driven companies employed about 3,800 people, the same as in 2022. A deeper look into the data and news reports, though, shows it was an important year for the startup community’s composition, revenue growth, and funding.

In 2023, 43 companies failed, a huge increase from 16 the previous year. While most of these ventures were essentially experimental companies launched by one or two entrepreneurs each, the failed companies included the drug discovery company IMV Inc., once the flagship of Halifax’s life sciences cluster.

Counterbalancing this wave of failures was an equally strong flood of new companies, especially in the IT sector. There were 70 companies that launched in Halifax in 2023, an increase of 62% over the previous year. Some of these companies are headed by entrepreneurs who have successfully exited previous ventures, such as Travis McDonough (the former CEO of Kinduct Technologies Inc.) and Tukan Das (former CEO of LeadSift). The bottom line: Halifax shed a lot of weak companies and replaced them with a new generation of ventures, many with experienced leadership at the helm.

The overall figure for investment funding in 2023 is inauspicious: $167.1 million, down 30% from the previous year. However, that drop can be attributed to the decline in funding by publicly listed companies. In 2022, Meta Materials Inc., raised about $64 million by selling shares on the Nasdaq. But that company suffered upheavals in 2023 and, combined with the failure of IMV, two capital-hungry companies were removed from the fundraising totals.

The big funding news was cleantech superstar CarbonCure raising US$80 million (C$105.7 million) in a venture capital round led by Swiss impact investor Blue Earth Capital. It was the biggest VC funding round in Nova Scotia’s history and should help to propel the Dartmouth company toward its goal of capturing 500 million tonnes of carbon dioxide annually by 2030.

There was more eye-catching funding news: angel funding (equity investments in startups by wealthy individuals) in Halifax companies rose in 2023, but it fell drastically in the rest of Atlantic Canada. Angel funding in Halifax climbed 27% to $11.7 million in 2023 – accounting for 74% of all the angel financing in Atlantic Canada. Angel funding is essential at this point in the startup community’s development because of the record number of new companies. Many of these companies will need pre-seed and seed funding in the next few years, and it will be hard to find investment if angels are not writing cheques.

More successful startups are ramping up sales. The poster child for this is Site 20/20, which makes automated traffic signals for construction sites. It placed sixth in Deloitte’s prestigious Technology Fast 50 list of Canada’s fastest-growing startups on the back of remarkable 2,392% revenue growth from 2019 to 2023.

In addition, 13 Halifax startups shared their full revenue data with Entrevestor for the past two years, and their revenue growth was 85% on a weighted-average basis. As well, seven other companies shared their revenue growth metrics, and four of these indicated their revenue increased 75% or more. One reported growth of 997%. In the last two years, revenue growth by Atlantic Canadian startups has generally been in the 40% to 50% range, so the numbers from Halifax startups are impressive.

Halifax’s entrepreneurs are becoming a more diverse bunch although the pace of progress is slow. Some 104 Halifax startups were led by immigrants in 2023 – more than one-third of all startups in the city, an increase of 13% from 2022. Women run 72 companies, one more than the previous year. The number of innovation-driven startups headed by Black founders was unchanged at six, and the city added an Indigenous-led startup, bringing the number to four.

For more information on startups in Halifax and across Atlantic Canada, see Entrevestor's 2023 Startup Data Report.

Halifax Innovation Sector Highlights
Units Indicated in Table, Halifax, 2021 to 2023
Number of Startups
(Enterprises)
New Companies
(Enterprises)
Failures
(Enterprises)
Revenue Growth
(% Change)
Total Funding
($ Millions)
2021
290
34
40

42%

$307.5
2022
311
43
16
46%
$238.0
2023
310

70

43
85%
$167.1

Source: Entrevestor, Custom Request

Highlights

  • Halifax added 70 new startup companies in 2023 bringing the total number to 310, roughly the same figure as 2022.
  • There were 27 more failures in 2023 than in 2022 with 43 companies closing shop.
  • Halifax’s startup community grew its revenue by 85% in 2023 compared to 46% in 2022. This was despite another notable decline in total funding across startups (-$70.9 million).

Source: Entrevestor, Custom Request

Employment at Startups

  • Halifax’s startups employed 3,749 people in 2023. This was a decline of 2.5% over 2022 but an increase of 162.7% since Entrevestor’s records started in 2016.
  • Since 2016, the startup community has a cumulative annual employment growth rate of 14.8%. In 2023, the first decline in the number of jobs was recorded. Prior to 2022, the annual growth rate had not fallen below double-digits.

Source: Entrevestor, Custom Request

New Startup Companies

  • Halifax added 70 new startup companies in 2023, 27 more (+62.8%) than in 2022.
  • This sets a new peak year for the number of new companies joining the ecosystem.
  • On average, Halifax has been adding 47 new companies each year since 2017.

Source: Entrevestor, Custom Request

Annual Equity Funding

  • Total equity funding was $167.1 million, a decline of 29.8% over 2022. This means Halifax startups received $70.9 million less in funding but still managed to grow their revenue by 85%.
  • Only $1.9 million of this funding came from stock markets through the publicly listed Sona Nanotech Inc.

*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

  • Entrevestor surveys startups on the diversity8of their owners.
  • Immigrants owned 104 (33.5%) of the startups in Halifax, 13 more than in 2022 and 34 more than in 2021.
  • 74 (23.9%) companies had female owners, slightly more than in 2022 when they owned 72 (23.0%) companies.
  • There were the same number of Black startup owners in 2022 and 2023 at six (1.9%). There was one more Indigenous owner in 2023 bringing the total to four (1.3%) startups.

Halifax Index 2024
Government

Government is a key driver of Halifax’s economy through the Province’s role as the largest employer and the Municipality’s major capital investments. After recovering its financial position post-pandemic, the Province forecasts rising debt levels and greater expenditures in the coming years. Such expenditures, including those in health care and housing, may prove to be of critical public value. However, forecasts of rising debt levels can be a cause for concern.

The Province expects to maintain ongoing budget deficits in the years to come. Its net debt-to-GDP ratio was near its 20-year low at 33.3% for 2023-24, but it is expected to rise in each of the next four years. Compared to other provinces, Nova Scotia was in the middle with the fifth-highest net debt-to-GDP ratio and net debt per capita ($17,665) in 2023.

The Halifax Regional Municipality expects to increase its revenue by 6.1% in 2023-24 and its overall expenditure9by 5.2%. Most of its revenue (74.8%) comes from property taxes, less deed transfer taxes. Deed transfer taxes alone constitute 5.9% of total revenue. The municipality expects to collect $1,196 million10in revenues, spend $1,043 million on its own activities, and pass an additional $201 million it collects onto the Province (primarily for schools and education). The Municipality expects to increase its net debt by $8.7 million in 2023-24 and spend $36.6 million in debt-servicing costs.

As important as how much it spends, is what the municipality spends money on. The municipality’s largest expenditures go to fiscal services11($231.2 million), mandatory provincial costs ($201.4 million), and Halifax Transit ($145.5 million). In absolute terms, spending on Halifax Transit increased the most (+$14.0 million) in 2023-24; fiscal services decreased the most (-$26.1 million).

(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 increased to 33.3% in 2023-24. This was slightly above 2022-23 (32.5%) and the second lowest since 1991-92.
  • The province’s 2023-24 net debt-to-GDP ratio was down 1.7 percentage points from the height of pandemic-related expenses in 2020-21 and down 4.8 percentage points since the recent peak in 2013-14.
  • The provincial government forecasts that it will gradually raise the net debt-to-GDP ratio to 38.4% by 2027-28, an increase of 5.1 percentage points above where it is now.

Source: Scotiabank Economics, Economics Publications - Fiscal Policy

Provincial Net Debt Comparisons

  • According to 2024-25 provincial budgets, Nova Scotia was fifth-highest across provinces both for net debt-to-GDP ratio (33.3%) and net debt per capita ($17,665) in fiscal year 2023-24.
  • Nova Scotia’s net debt per capita decreased by $168 between 2022-23 and 2023-24.

(f): Forecast data
Source: Halifax Regional Municipality, Finance and Asset Management

Municipal Revenue by Source

  • Halifax’s municipal revenue increased 6.9% in 2022-23 and is expected to increase by another 6.1% in 2023-24, followed by another 4.1% increase in 2024-25.
  • 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.
  • Other revenues, which include transfers from other governments, interest revenues, fee revenues, and other sources, continue to be the second largest source, generating about 15.0% of municipal revenue in 2022-23. HRM expects this share to decline to 12.6% by 2024-25.
  • HRM expects revenue from deed transfer taxes to decline roughly $4 million (-5.3%) in 2023-24 and make up roughly 6% of the municipality’s total funding. Deed transfer taxes are expected to decline in both absolute terms and as a share of total revenue in the coming years.
  • Tax agreements and payments in lieu of taxes are expected to comprise approximately 5% of revenue as they have since 2014-15 (except for 2021-22).

(f): Forecast data
In the April 2023 budget, HRM debt stock were restated for actual debentures issued.
Source: Halifax Regional Municipality, Finance and Asset Management

Municipal Debt Balance and Service Costs

  • The Halifax Regional Municipality’s outstanding debt is expected to increase by $8.7 million (+4.7%) between 2022-23 and 2023-24. This is a much slower growth rate than the $54.5 million (+41.5%) increase the year prior.
  • The outstanding debt balance is expected to rise by another $48.3 million (+24.8%) in 2024-25 and continue to increase again the following year.
  • HRM expects to pay $36.6 million in debt-servicing costs in 2023-24, up 4.3% from $35.1 million the prior year. The municipality expects debt-servicing costs to increase by $12.7 million (+34.7%) in 2024-25.

Budget data reflect a forecast for the 2024-25 fiscal year.
Source: Halifax Regional Municipality, Finance and Asset Management

Municipal Spending by Department

  • Total municipal spending in 2024-25, excluding mandatory provincial costs, is expected to rise from $991.4 million to $1,043.4 million, an increase of 5.2%.
  • The largest shares of municipal spending comes from fiscal services (18.6%), mandatory provincial costs (16.2%), and Halifax Transit (11.7%).
  • Halifax Transit budgeted the largest increase in absolute terms and its budget is expected to rise by $14.0 million in 2024-25. This will increase its share of total spending by 0.6 percentage points.
  • The fastest growth in spending is expected to come from community safety (+42.7%); property fleet and environment (+18.5%); information technology (+17.1%); planning and development (+17.1%); and the RCMP (+17.0%).

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