respectively of the labor force is absorbed 

 by manufacturing, i?/ In the Atlantic Prov- 

 inces, however, only lU to 22 percent of 

 the non-agricultural labor force is engaged 

 in manufacturing. Proportionally more than 

 two -and -one -half times as many workers are 

 in manufacturing pursuits in Maine and 

 Massachusetts as in Newfoundland. On the 

 other hand, while only a statistically 

 minute segment of the non-agricultural 

 labor force in the two New England states 

 have jobs in forestry, fishery, and mining, 

 these industries provide enqployment for 

 15-16 percent of the labor force in Nova 

 Scotia and New Brunswick and 32 percent in 

 Newfoundland. 20/ 



The Atlantic Provinces, because of the 

 dominance of their extractive industries, 

 are dependent for their prosperity upon ex- 

 port sales of these reaources primeirily in 

 raw or semi -processed forms. The possi- 

 bilities of expansion in secondary manu- 

 facturing are severely restricted by the 

 limited size of local markets, the trans- 

 portation costs to the population centers 

 in central Canada, and the tariff barriers 

 to the nearby New England market. 



The economists of the region feel that 

 logically there should be more commerce 

 with New England in terms of processed raw 

 materials and secondary manufactured goods. 

 They do npt place the blame for lack of 

 such trade on the United States alone. 

 Many feel that Dominion policy since Con- 

 federation, e.g., in respect to Canadian 

 tariffs and the transcontinental railroads, 

 (perhaps now the Saint Lawrence Seaway), 

 has shifted the direction of trade from a 

 more natural north-south to a linear east- 

 west orientation. 21/ as the result of ex- 

 tensive provincial financial aid, there 

 has been some development of secondary 

 manufacturing in Newfoundland since Confed- 

 eration with Canada in 19U9. In the other 

 Atlantic Provinces, however, the net value 

 of manufacturing production in constant 

 dollars has not changed significantly in 

 the postwar years. 



The area has developed a definite re- 

 source-export based econony. This develop- 

 ment stems fundamsntally from the principle 

 of comparative advantage. The Atlantic 

 Provinces have been endowed with certain 

 natural assets such as forest and mineral 

 resources, highly productive fishing banks, 

 and extensive hydroelectric potential. Add 

 to this situation the area's seaboard loca- 

 tion, and it is clear that such an economy 

 must have a substantial export base . 



There appear to be possibilities for 

 further development of certain of the 

 primary industries. The forest resource 

 is exploited at a rate well below repro- 

 ductive capacity and the long-run outlook 

 for its pulp and paper products in world 

 markets seems very promising. The dis- 

 covery of vast iron ore and other metals 

 deposits in Labrador, the extensive iron 

 resources on Bell Island, Newfoundland, 

 the large deposits of copper, lead, and 

 ainc found in New Brunswick in 1953, and 

 the possibilities of increased production 

 of non-metallics such as gypsum, flurospar, 

 limestone, and barites, make the long-term 

 prospect for minerals encouraging. The 

 important Nova Scotia coal mining industry, 

 however, may suffer a decline because of 

 high cost operations, competition from 

 other fuels and transport costs to central 

 Canadian markets. Coal mining is still 

 the most valuable segment of the mining 

 industry. Little change is seen in the 

 role of agriculture due to the physiography 

 of the region, transport costs, and ex- 

 change difficulties. 



The economies of the Provinces have 

 been subject to both seasonal and cyclical 

 fluctuations because of their resource and 

 export orientation. Fishing and woods 

 operations are subject to seasoiial varia- 

 tions in production while employment, pay- 

 rolls, and production in mining and in 

 forestry -connected activities have varied 

 cyclically with demand in export markets. 

 The result has been over-specialization, 

 instability in emplojrment, a situation of 

 surplus labor, a reluctance, therefore. 



ip/ Bureau of Labor Statistics. Employment and Earnings , Annual Supplement, 

 April, 1958. 



20/ Census of Can ada. 1951. 



■^V Paper by S. N. Branch, "A Look at the Economy of Canada's Atlantic Provinces", 

 delivered at the Joint Economic Conference (NEC-APEC), Saint John, New Brunswick, 

 August h, 1958. 



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