APEC says public dollars driving most project spending in Atlantic Canada

ST. JOHN'S, N.L. - A regional economic think-tank says public dollars are still driving spending on major projects in Atlantic Canada as the struggling economy continues to keep many private-sector investors on the sidelines.
In releasing its annual project inventory report on Tuesday, the Atlantic Provinces Economic Council said it's not clear what will happen as government stimulus money begins to wind down.
"The critical issue is whether the private sector will pick up the slack as stimulus spending starts to wind down in 2011," said senior economist David Chaundy.
The 2010 inventory tracked 343 of the region's largest investment projects valued at $72 billion.
"Government stimulus spending on project activity increased 32 per cent in 2009 and is expected to grow an additional 20 per cent in 2010," said Chaundy in a release.
"The largest share of the increase in public spending went to transportation, while broad infrastructure programs and education also received significant funding."
He said the effects of the global recession on private investment have already led to cancellation of projects such as an $8-billion refinery project in Saint John, N.B., and a $5-billion petrochemical plant in Nova Scotia.
APEC said private-sector investment fell for the second consecutive year in Prince Edward Island and New Brunswick as various projects wound down.
It increased in Newfoundland and Labrador due to higher spending on offshore projects and the Vale Inco nickel processing facility, and went up in Nova Scotia because of spending on renewable energy.
However, next year may be a problem for most of the region with the exception of Newfoundland and Labrador.
"This regional divergence in investment spending could be a pattern that continues for years to come," said Chaundy.