Reviewed by Moishe Alexander, CFC CEO

Public and private spending on major projects in Atlantic Canada will increase nine per cent to $8.8 billion this year despite a global recession that has left much of North America in much worse shape, an independent think-tank concludes in an report released Monday.
The Atlantic Provinces Economic Council’s annual Major Projects Inventory found that the economic downturn has prompted the delay or cancellation of some projects, but many ongoing projects in the region have benefited from lower labour and material costs.
“Things are not nearly as gloomy here in Atlantic Canada as they are in other parts of North America,” Elizabeth Beale, the council’s president and CEO, told about 100 businesspeople at the Pier 21 complex in Halifax.
The study found that even though private sector spending will dip four per cent in 2009, big increases in public spending will drive up the overall rate in the region.
The council concluded the federal and provincial governments have come forward in a big way to stimulate the region’s economy, boosting spending by a whopping $900 million in 2009 alone.
Nova Scotia’s share of the public funds will jump by 53 per cent, with most of the money earmarked for education, transportation and water upgrades. Newfoundland and P.E.I. will see public spending increase 40 per cent, and New Brunswick 15 per cent.
As for private sector spending, most of the new money – 40 per cent – will be spent by energy companies producing oil, natural gas and electricity.
According to the study, Nova Scotia will lead the way in 2009 with a 23 per cent increase in private and public spending on major projects as work continues on the Encana Corp.’s (TSX:ECA) $700-million Deep Panuke natural gas project.
The project is expected to start producing next year.
But there are no other offshore projects on Nova Scotia’s horizon, with the most recent exploration well drilled in 2004.
Newfoundland and Labrador will see project spending increase 20 per cent as work continues on Vale Inco’s $2.2-billion Voisey’s Bay nickel processing facility at Long Harbour and Husky Energy’s (TSX:HSE) $3.5-billion expansion of its White Rose offshore oilfield.
Spending will be up slightly in Prince Edward Island as work wraps up on 55 wind turbines erected for $220 million by West Cape Wind Energy.
In New Brunswick, major project spending will drop 13 per cent as most of the work on the Emera Inc. (TSX:EMA) Brunswick Pipeline was completed last year.
Still, New Brunswick has its share of megaprojects underway.
The council’s senior economist, David Chaundy, said major project spending in the province this year includes plans by the Potash Corp. of Saskatchewan (TSX:POT) to spend $1.7 billion to expand a potash mine near Sussex.
Two shafts are being drilled there this year, but the entire project won’t be completed until 2012.
As well, work is continuing on the $1-billion refurbishment of the Point Lepreau nuclear generating station in southern New Brunswick and the $1-billion Canaport liquefied natural gas terminal in Saint John.
On the downside, tight credit markets have led to delays in the construction of two condominium projects in Charlottetown, a new RCMP headquarters in Dartmouth, N.S., a number of wind energy projects in Nova Scotia and New Brunswick and expansion of the Come By Chance oil refinery in Newfoundland.
Lower commodity prices also forced the delay of an $800-million expansion of the Iron Ore Co. of Canada in Labrador.

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