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.

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.

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.

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.

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.

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.

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.