Top stories of 2019: Atlantic Canada’s biggest business news of the year
It’s been a momentous year for business news in Atlantic Canada, from boardrooms to courtrooms and pulp mills to fishing wharves. These are the top business headlines of 2019 that continue to be read, shared and talked about. Some of these high-profile stories filled the business pages for weeks. Others promise to continue dominating the news in 2020.
MASS SALMON DIE-OFF
They died in early September. But it would be weeks before the death toll was known: An estimated 2.6 million salmon died in pens on Newfoundland’s south shore.
It was the biggest die-off of farmed fish in Atlantic Canada’s history. Northern Harvest Sea Farms blamed the deaths on unusually warm waters, saying the salmon clustered at the bottom of pens in search of cooler water. They suffocated from a lack of oxygen.
In all, about 5,000 tonnes of salmon – half of Northern Harvest’s fish stock – perished.
The situation dealt a serious blow to the aquaculture industry, which many say has breathed new life into struggling coastal communities.
It also reignited debate over salmon farming’s potential impact on the environment and traditional fishing grounds, including the use of antibiotic and pesticides, and concerns with farmed salmon escaping cages and breeding with wild salmon.
The Newfoundland and Labrador government responded with the release of new aquaculture policies and procedures, while other Atlantic provinces said they were monitoring the situation.
The mass die-off will likely plague the aquaculture industry in Atlantic Canada for years to come.
MUSKRAT FALLS
The Muskrat Falls hydroelectric dam will soon be online, with first power expected before the year is out.
But the wounds of the $12.7-billion over-budget project run deep, with many in Newfoundland and Labrador concerned about the crippling cost overruns and environmental impacts of the dam.
A high-profile public inquiry into what many consider a boondoggle dominated the news for months in 2019, with more than a hundred witnesses and thousands of exhibits.
In July, Moody’s Investors Service downgraded the province’s credit rating, citing in part the high cost of Muskrat Falls.
Without government action, electricity rates could double overnight — a measure experts say could crush the economy.
Rate mitigation hearings were held this fall to figure out how to pay for the project.
Given the federal government backstopped the 824-megawatt project’s debt, it’s widely expected Ottawa will lend a hand in the new year.
NORTHERN PULP
The mill opened in 1967. It was hailed as an economic boon for Nova Scotia, creating jobs in
Pictou County and supporting the province’s forestry industry.
But the pulp mill — Scott Paper then, Northern Pulp now — also brought pollution.
Toxic effluent was piped into Boat Harbour, a bay off the Northumberland Strait alongside a Mi'kmaq community. Foul-smelling sulphur odours — once shrugged off as "the smell of money" — filled the air year after year.
As awareness grew about the air and water pollution, the public began to demand higher emissions standards and cleaner water.
Amid increasing concern with the mill, the Nova Scotia government passed the Boat Harbour Act in 2015, banning the use of the once pristine tidal estuary for the mill’s waste after Jan. 31, 2020.
Northern Pulp proposed to build a new treatment plant that would treat the waste, then pipe it into the ocean.
But this week, the province’s environment minister said the mill’s report on the proposed system lacked enough science-based information, and ordered an environmental assessment report.
Three days later, the premier said he wouldn’t extend the deadline to close Boat Harbour. The decision will continue to make headlines in 2020, as hundreds of mill workers are expected to be laid off as the mill shutters.
QUADRIGACX
The downfall of Canada’s largest cryptocurrency exchange was sudden and dramatic.
Quadrigacx founder and CEO, Gerald Cotten, died last December while travelling in India.
Upon his death, it was revealed that the Fall River man had sole access to so-called “cold wallets” — encrypted offline platforms used for storing digital cash.
Without the passwords to recover the cryptocurrency, more than 100,000 customers of the online exchange lost an estimated $250 million.
The complex case dominated business news as the company sought legal protection from its creditors, and later entered bankruptcy, through Nova Scotia Supreme Court.
Earlier this month, lawyers for clients who lost millions through Quadriga asked the RCMP to exhume the remains of the firm's founder to confirm they are indeed those of Cotten.
The story promises to continue unfolding in 2020.
CRANE COLLAPSE
Powerful storm Dorian walloped Atlantic Canada in September, plummeting hundreds of thousands into darkness, uprooting trees and knocking down a tall construction crane in downtown Halifax.
The crane became a symbol of the post-tropical storm and the strength of mother nature.
Hurricane-force winds crumpled the towering crane nearly in half, leaving it dangling over the concrete frame of a building under development.
The crane became an infamous — albeit fleeting — attraction for locals and tourists. Storm-watchers flocked to the downtown area to see the wreckage firsthand — despite authorities pleading with residents to steer clear of the area.
It forced the evacuation of homes and businesses in the vicinity for several weeks, prompting a proposed class action lawsuit to recoup losses incurred by businesses and residential tenants displaced by the fallen crane.
TRADE WITH CHINA
As tensions between China and the U.S. deepened this year, Atlantic Canada quietly stepped up trade with the Asian country.
Nova Scotia led the charge, with the province’s exports to China on track to hit $1 billion this year. Seafood alone accounted for about two-thirds of trade.
A big factor propelling the trade increase was the difference in tariffs on seafood from
Canada compared to the U.S. Lobster from Yarmouth, for example, has a seven per cent tariff in China compared to a whopping 35 per cent tariff on lobster from Maine.
Meanwhile, P.E.I. also plans to strengthen trade with China, with the goal of quadrupling sales with China by 2025. China is already the island’s second largest international trading partner, with seafood and frozen potatoes leading the exports.
New Brunswick has also boosted trade with China, conducting 10 official missions to China since 2008. Last year, exports to China totalled roughly $126 million, with the top exports being chemical wood pulp, salmon, crabs, lobsters and newsprint.
P.E.I.’S RED-HOT ECONOMY, RISING IMMIGRATION AND HOUSING CRUNCH
Prince Edward Island was the little province that could in 2019.
The island’s tiny economy was expected to end the year with 2.8 per cent growth — higher than any other province in Canada.
A recent RBC Economics report found that retail spending in P.E.I. increased three per cent over the year, again the biggest increase in the country, and it was the only province where new motor vehicle sales grew in 2019.
The province also led the country in population growth, driving demand for new housing and spurring a meteoric rise in the island’s construction sector.
A housing shortage, especially in Charlottetown, is expected to continue to be an issue in 2020.
It was in late 2017 that Washington imposed new tariffs on Canadian lumber.
New Brunswick mills were largely unscathed at first, as a U.S. housing boom drove demand — and prices — for lumber.
But a sluggish housing market south of the border and lower lumber prices in 2019 have made the duties more noticeable for New Brunswick forestry players.
A recent RBC Economics report said that trade tariffs on lumber products had depressed exports of forestry products from New Brunswick to the U.S.
Whether the dispute will be resolved — or the tariffs will continue in 2020 — remains to be seen.
CANNABIS
Cannabis was legalized in the fall of 2018. But it was over 2019 — the first full year of weed sales — that Crown agencies, private retailers and commercial producers across Atlantic Canada worked out the kinks of growing and selling cannabis.
In June, the Nova Scotia Liquor Corporation said it sold $33 million worth of cannabis in the fiscal year ending March 31. Although overall sales were higher compared to the previous year, the NSLC reported a lower profit margin.
Meanwhile, the government of Newfoundland and Labrador signed deals to see new stores and a production facility. Auxly Cannabis Group became the third private enterprise to ink a deal with the province for the production and sale of recreational cannabis.
In November, the New Brunswick government announced plans to privatize Cannabis NB.THE province’s finance and Treasury Board minister said given the losses incurred by the provincial cannabis corporation, it was time to turn it over to the private sector.
Meanwhile, the Prince Edward Island Cannabis Management Corporation lost $483,000 during its first six months of selling weed, but broke even after receiving its share of the cannabis tax.
ATLANTIC CANADA OFFSHORE
Nova Scotia’s offshore has gone largely quiet. On Dec. 31 last year, the Sable Offshore Energy Project delivered the last of its natural gas to Nova Scotia.
While decommissioning continued at both Exxonmobil Canada Ltd.’s Sable project and Encana Corp.’s Deep Panuke Offshore Gas Project, offshore production has ended – for now.
In Newfoundland and Labrador, the offshore sector was plagued by four significant spills since April 2018.
The incidents have prompted the offshore regulator to review and improve safety, prevention and spill response measures.
The spills haven’t dampened interest in the province’s offshore. It’s anticipated oil and gas companies could invest billions in the sector over the coming years as the search for the region's next large project heats up.