Every year, the Halifax Index provides an overview of the city and insights to strengthen and grow Halifax. This 10th annual edition continues to measure Halifax’s startup growth across a wide range of key indicators and progress towards the city’s Economic Growth Plan goals.
The Index compares Halifax against five other similar-sized Canadian “benchmark cities.” They include St. John’s, Quebec City, Kitchener-Cambridge-Waterloo (KCW), Regina, and Victoria. This year, the Index reports on the continuing economic impacts of the COVID-19 pandemic and highlights indicators regarding recovery.
“2020 was unlike anything any of us have seen or could have predicted.”, Ian Munro, Chief Economist.
What’s a Startup?
- Locally owned business.
- Commercializing technology.
- Targeting the global market.
Summary of Halifax Startups in 2020:
- Number of startups 689
- New Companies 40
- Jobs 2,988
- Job Growth 23%
- Revenue growth 67%
- Total funding $121.7M
- Publicly Listed Startups 5
- Stock Market Funding $54.7M
- Ocean Companies 48
Halifax added startups, despite the pandemic
Halifax is the cornerstone of the Atlantic Canadian startup community.
Companies reported growth of 23%:
- Halifax startups employed 1,427 in 2016
- They employed 2,989 in 2020
- Employment has more than doubled in 4 years
ECONOMIC GROWTH
Halifax’s real GDP fell by 3.5% in 2020 to $20.48 billion. While this was one of the largest annual declines experienced, Halifax has rebounded well and the Conference Board of Canada predicts robust GDP growth of 4.6% for 2021. With mandated lockdowns, physical-distancing requirements, and travel restrictions, much of the decline was in the service sector, which makes up over 80% of the city’s employment.
As well, retail sales in Halifax fell by 4.8% although The Conference Board of Canada expects this figure to rebound by 4.3% in 2021 as pent-up demand for finished goods comes back to the marketplace.
In comparison to benchmark cities, Halifax performed better than most. With the second-lowest percentage drop in GDP, Halifax was only behind Victoria (-2.9%). Halifax’s drop in retail sales was the third-largest across benchmark cities. Only St. John’s and Victoria saw increases in retail sales with a growth of 1.5% and 1.9%, respectively.
The total number of active businesses1,2fell year over year across all benchmark cities. Halifax saw a 3.9% decrease in the number of active businesses between 2019 and 2020, but it remained above 2015 levels (the earliest year in Statistics Canada’s data series). In fact, Halifax experienced the smallest decline across all benchmark cities.
With the onset of the pandemic, consumer confidence in Halifax, as measured by Narrative Research’s Consumer Confidence Index (CCI), plunged in the first three quarters of 2020. This brought the CCI to a 10-year low of 83.6 points. As the economy rebounded and reopened, the year ended with a small increase of 1.7 points in Q4.
GOVERNMENT
With COVID-19 came steep job losses and widespread business restrictions and closures. All levels of government rolled out emergency-assistance programs to keep people and businesses afloat. These sharp hikes in government spending were financed through increased borrowing that will be paid back over time.
Nova Scotia, as has been the case for some time, remains in the middle of the pack across provinces for net debt per capita. According to the 2021-22 Nova Scotia budget, the net debt of the province is expected to be $16.7 billion for 2020-21 and increase to $18.0 billion for 2021-22. The 2020-21 figure equates to $17,032 per capita and 37.4% of GDP.
Fiscal 2020-21 saw total Halifax Regional Municipality revenue decline by 1.8%, and it is expected to decline again by 3.5% in 2021-22. Property taxes remained the largest source of revenue in 2020-21. Revenue generated through other sources, however, increased in 2020-21 mainly due to stimulus packages from the federal and provincial governments, somewhat offsetting pandemic-related declines in transit fares and parking revenues.
Municipal debt remained the same at $235.7 million in 2020-21 as it was in 2019-20. Debt is expected to increase to $241.2 million in 2021-22, the first increase in a decade.
Municipal spending is expected to increase by $51.3 million (5.4%) in 2021-22. The departments with the largest proportional increases were Planning and Development, Corporate and Customer Services, and Other Government Support Services.
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