Move to greener pastures in the Maritimes slowing
Population gains in the Atlantic provinces are showing moderation, says TD Economics
SYDNEY, N.S. — Canadians’ migration east in search of cheaper housing and a better quality of life in the Maritimes appears to be losing steam.
The pandemic drew a flood of new residents, many from Ontario, to the shores of the Atlantic Ocean, boosting the population of provinces that for years had seen more people leave than come in.
With remote work taking off and a more inexpensive lifestyle beckoning, Canadians from other provinces snapped up homes in New Brunswick, Nova Scotia and Prince Edward Island.
Interprovincial migration in 2021 was 40 per cent higher than in 2016 to 2020 combined.
Now the tide is turning. Even though population growth in other regions of the country is still at multiyear highs, gains in the Atlantic provinces are showing “notable moderation,” says a new report from TD Economics.
The flow of interprovincial migrants that ran at 5,000 or more a quarter in 2021 and 2022 has slowed to a trickle of 1,000 at the start of 2024.
“We anticipate this trend towards slower population growth in the Atlantic will persist, marking a very important development for a region where economic growth has broadly benefitted more from recent population inflows,” said Toronto Dominion economists Rishi Sondhi and Marc Ercolao.
ECONOMIC IMPACT
The economists say policy makers should take note because their “lofty population projections, especially in 2025, are at risk of overshooting.”
How much of an impact could this have on the economies of the Atlantic provinces?
Consumer spending here, which according to TD data has outperformed the rest of Canada over the past few years, will take a hit.
If population growth goes the way the economists think it will, gains in household spending in Atlantic Canada could be as much as 0.6 percentage points lower than what provincial governments are expecting.
The Atlantic provinces in their latest budgets forecast 3.3 per cent growth in gross domestic product next year. TD economists reckon the region will achieve half that.
And what about the housing market, which attracted so many of the interprovincial migrants in the first place? The wave of newcomers over the past few years bid up prices in every Maritime market, especially in Nova Scotia and Prince Edward Island where affordability is now the worst in history, said the economists.
Fewer newcomers moving into the region will blunt this force and TD expects growth in home prices to slow even with the fall in interest rates.