• Nova Scotia began 2021 with very strong gains across a number of sectors and remains positioned for very strong growth this year.
  • A severe third pandemic wave and control measures may stall those gains.

Data released to date suggest that Nova Scotia began the year with particularly strong economic momentum. We noted last quarter that the province’s labour market witnessed an impressive rebound in the second half last year—supported by effective COVID-19 containment and its remote work-capable services industries’ resilience to lockdown measures. In the first quarter of 2021, gains in Nova Scotia employment, manufacturing shipments, car sales, and wages and salaries outpaced national-level advances.

Yet, the third wave of the pandemic hit Nova Scotia particularly hard, and has the potential to stall some of the province’s gains in the first half of this year. It was an unfortunate turn for a jurisdiction that had carried a relatively small COVID-19 caseload up to that point. The surge in cases began in late April and strict severe new lockdown measures were in effect through May, those developments impacted full-time employment and hours worked in the latter month. However, infection rates have since fallen and stabilized, and that has allowed the province proceed with reopening plans.

The relatively strong fiscal position outlined in Nova Scotia’s 2021 budget partly reflects resilience to the pandemic. Read our full summary here, where we note that: a) Nova Scotia has the earliest projected return to balance date of any Canadian province (FY25), and b) it aims to keep infrastructure outlays above $1 bn for the second straight fiscal year. The latter move should help support the recovery in 2021.

Federal shipbuilding contracts should support the manufacturing sector over the medium-term. Construction of arctic offshore patrol ships is expected to continue until the middle of this decade.

We continue to monitor international migration flows as the pandemic progresses; Nova Scotia has witnessed some gains on this front. Newcomer admissions are up incrementally versus year-earlier levels—the rally supported by a pickup in Provincial Nominees and likely related to measures to provide permanent resident status to individuals already in Canada. However, newcomer admissions remain below the target level across the country.

Exports have gotten off to a solid start to the year. Tire manufacturing and sales to the United States surged in April to overcome early 2021 weakness. We suspect that demand for these products south of the border will be strong as reopening proceeds and auto production picks up in the US, and pandemic-related uncertainty eases. Seafood manufacturing export values also jumped in April, but sales to China have been soft to begin 2021, which may be related to efforts in that country to support domestic producers.


This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank nor any of its officers, directors, partners, employees or affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.

These reports are provided to you for informational purposes only. This report is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any financial instrument, nor shall this report be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The information contained in this report is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a “call to action” or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. Scotiabank may engage in transactions in a manner inconsistent with the views discussed this report and may have positions, or be in the process of acquiring or disposing of positions, referred to in this report.

Scotiabank, its affiliates and any of their respective officers, directors and employees may from time to time take positions in currencies, act as managers, co-managers or underwriters of a public offering or act as principals or agents, deal in, own or act as market makers or advisors, brokers or commercial and/or investment bankers in relation to securities or related derivatives. As a result of these actions, Scotiabank may receive remuneration. All Scotiabank products and services are subject to the terms of applicable agreements and local regulations. Officers, directors and employees of Scotiabank and its affiliates may serve as directors of corporations.

Any securities discussed in this report may not be suitable for all investors. Scotiabank recommends that investors independently evaluate any issuer and security discussed in this report, and consult with any advisors they deem necessary prior to making any investment.

This report and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced without the prior express written consent of Scotiabank.

™ Trademark of The Bank of Nova Scotia. Used under license, where applicable.

Scotiabank, together with “Global Banking and Markets”, is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including; Scotiabank Europe plc; Scotiabank (Ireland) Designated Activity Company; Scotiabank Inverlat S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Casa de Bolsa, S.A. de C.V., Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Derivados S.A. de C.V. – all members of the Scotiabank group and authorized users of the Scotiabank mark. The Bank of Nova Scotia is incorporated in Canada with limited liability and is authorised and regulated by the Office of the Superintendent of Financial Institutions Canada. The Bank of Nova Scotia is authorized by the UK Prudential Regulation Authority and is subject to regulation by the UK Financial Conduct Authority and limited regulation by the UK Prudential Regulation Authority. Details about the extent of The Bank of Nova Scotia's regulation by the UK Prudential Regulation Authority are available from us on request. Scotiabank Europe plc is authorized by the UK Prudential Regulation Authority and regulated by the UK Financial Conduct Authority and the UK Prudential Regulation Authority.

Scotiabank Inverlat, S.A., Scotia Inverlat Casa de Bolsa, S.A. de C.V, Grupo Financiero Scotiabank Inverlat, and Scotia Inverlat Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financial authorities.

Not all products and services are offered in all jurisdictions. Services described are available in jurisdictions where permitted by law.