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Atlantic companies more ambitious than ever, but weighed down by disproportionate public sector: Don Mills & David Campbell

Sep 22, 2024 | Business

  • Atlantic companies more ambitious than ever, but weighed down by disproportionate public sector: Campbell and Mills

By Avery Mullen

A shift in the mentality of the Atlantic Canadian business community is one reason more investment capital is flowing into Atlantic Canada, but an outsized public sector compared to the rest of Canada and the possibility of a longer-term, national immigration crackdown are among the worries still plaguing the region, attendees at a private equity conference in Halifax heard Wednesday.

Economist David Campbell and retired pollster Don Mills, who together host the popular Insights Podcast, were the keynote speakers at the event, which was organized by the Toronto chapter of industry group the Association for Corporate Growth.

“When I started my business many, many years ago, there was a different attitude in the region,” recalled Mills, who ran polling firm Narrative Research until it was sold in a 2018 management buyout. “You started a business, the question was, could I make it in Halifax? Could I make it in Nova Scotia? It was very inward-looking.

Economist David Campbell,left, and retired pollster Don Mills, who together host the popular Insights Podcast, were the closing keynote speakers Wednesday at a conference in Halifax organized by the Toronto chapter of industry group the Association for Corporate Growth. (The Notebook).

“One of the things that we’re finding, because we’ve done podcasts with many of the major incubators and accelerators across the region, is there’s a new ambition that is evident. … They have a vision to build national or global organizations,” says Mills.

Founded in 1954, the Association for Corporate Growth, or ACG Toronto is one of the oldest North American chapters of the global organization. It exists to connect private capital investors with potential investments, as well as acting as a general hub for the industry.

The interest in Atlantic Canada shown by ACG Toronto is an example of the changing approach to business at play on the East Coast, with CEO Mike Fenton suggesting the market for a conference such as ACG’s would not have been large enough even a decade ago.

“A lot of the companies that are members in either our Toronto or Montreal chapters or even western Canada, who are still looking for good deals in Canada maybe haven’t thought about Atlantic Canada, don’t know enough about the ecosystem here,” said Fenton, explaining ACG’s move into the region. “Or they don’t know about the strong entrepreneurial that is accessible here.”

The interest in Atlantic Canada shown by the Toronto chapter of the Association for Corporate Growth is an example of the changing face of business in the region, CEO Mike Fenton said in an interview Wednesday. He suggested the market for a conference such as ACG’s would not have been large enough even a decade ago. (The Notebook).

One of the early proving grounds for the transformation that brought about the arrival of ACG has been P.E.I.’s life sciences and pharmaceuticals sector, which produced some of the first true international companies in the region.

Earlier this year, for example, Indiana pharmaceuticals giant Elanco Animal Health sold its Prince Edward Island operation to Merck & Co. for US$1.3 billion. The business unit was a stalwart of the province’s life sciences cluster, dating back to the 1980s in various permutations. The operation at the time employed more than 140 people on the island and generated about US$175 million in annual revenue.

“One of our biggest challenges in this region is that we’re not very good at exports,” said Mills. “We need more exporters, we need more manufacturer ears. And we’re getting some of them now … There’s something real going on in P.E.I.”

BIOVECTRA, the Charlottetown drug maker that in 2019 was bought by Miami-based H.I.G. Capital for US$250 million, announced in July it had reached an agreement to be sold again, this time for US$925 million, to Santa Clara, California’s Agilent Technologies. The deal is expected to close by the end of this year, BIOVECTRA said at the time.

Much of how Atlantic Canadian has achieved and sustained economic growth in the face of a productivity handicap, is immigration, economist David Campbell and pollster Don Mills said Wednesday. That means a federal clampdown on newcomers could disproportionately impact the region (The Notebook).

The news, however, is not all good. In general, Campbell and Mills characterized Atlantic Canada as suffering from “chronic underperformance” on the economic front.

“We have a smaller private sector, proportionally, than any other part of the country, said Mills. “In Atlantic Canada, one in four people work for the public sector. One in four. In Canada, the average is one in five. We’re playing a man short, and yet we want to keep up with the GDP for the county.”

Much of what has allowed for Atlantic Canadian to achieve and then sustain workable levels of economic growth, even in the face of that productivity handicap, is immigration, Campbell and Mills said. But Campbell added he worries too much tightening of federal immigration policy could disproportionately hurt Atlantic Canada’s economy.

“If you have a change of government, and the new government comes in and says, ‘We’re going to dramatically cut immigration,’ that will hit our region harder,” said Campbell. “This region is older than the rest of the country from a median age perspective. This part of the country needs more immigrants. … What we want from a federal government is a government that recognizes the regional differences and the different provincial priorities.”

The median age across Canada is about 40.5 years. In Nova Scotia, it is 43.8, and in New Brunswick, it is 45.4.

“There’s a new ambition that’s evident”: economic David Campbell and retired pollster Don Mills have had their views on Atlantic Canada’s prospects reshaped by hosting their Insights podcast. (The Notebook).

“(Federal conservative leader) Poilievre has talked like he understands that,” said Campbell. “But you know, when he comes out and says, ‘We’re going to tie immigration to housing starts,’ it seems like a very blunt way to solve a problem.”

Stewart McKelvey partner Christine Pound moderated the closing keynote featuring Insights podcast hosts David Campbell and Don Mills Wednesday at a conference hosted by the Association for Corporate Growth, Toronto chapter. (The Notebook).

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