Emergence of an East Coast boomtown: 'The timing is now for Halifax'
Published Monday, July 3, 2017 11:37AM ADT
Halifax is booming, its skyline awash with construction cranes, and Ontario native Jesse Rodgers can tell you why.
Rodgers, a veteran of Waterloo's tech startup scene, moved to the Nova Scotia capital a year ago with his wife and four kids. They bought a big house on a quiet, tree-lined street a stone's throw from the ocean.
The family bought a boat. They eat supper together almost every night. The kids joined sports teams, and Rodgers coaches hockey in the winter, baseball in the summer.
They are part of a convergence of factors -- thriving manufacturing and construction sectors, healthy employment and income gains, strong housing and retail markets, off-the-charts population gains -- that have made Halifax one of the country's fastest-growing cities, and earned it the title of Canada's fifth-biggest tech hub.
In a region that is largely consumed by a narrative of decline, Halifax stands out, and not just because of its fast-changing skyline.
"The startup community in Halifax feels like Waterloo 15 years ago and it's going to grow," said Rodgers, who helms the city's start-up entrepreneur hub Volta Labs. "The timing is now for Halifax."
Halifax has long been lauded for its short commutes, affordable homes, clean air and nearby beaches. It's home to multiple universities and colleges, military bases, start-ups and a convenient time-zone and geography.
But the city's charm may come from what it doesn't have: Million-dollar tear-downs, gruelling commutes to increasingly expensive, far-flung bedroom communities, summertime smog warnings, crush-loaded transit.
Halifax resonates as an anti-Toronto -- many big city charms but few big-city headaches.
The city had a record population boom last year, economic growth has been strong, entrepreneurial activity is on the rise and housing starts are up.
The municipality's planning department is processing more building permits than ever before. In 2011, for example, the city issued permits for 96 new residential units. Last year, that number soared to 1,040 units.
The city's per capita population growth in 2016 outpaced Montreal, Vancouver, Ottawa and, just barely, Toronto, according to recent Statistics Canada figures.
Much of the increase came from international immigrants, who made up three-quarters of the city's 8,147 new residents. Even without a wave of Syrian refugees, it was still a record year.
Ian Munro, chief economist with the Halifax Partnership, the city's economic development agency, called the two per cent increase in population, to nearly 426,000 residents, "spectacular."
"I don't know yet if that's a trend or a blip," he said. "We have to wait to see what next year holds."
Munro suggested international students putting down roots could account for a "good chunk" of newcomers. More than half the immigrants are under the age of 30, while most are under age 45, figures show.
"If you want to be coldly, narrowly economic about it, getting this working-age cohort is the sweet spot," he said. "They buy homes, start families, build businesses, hire people and establish contacts in their homelands to encourage more immigrants."
Eddy Ng, a professor at Dalhousie University's Rowe School of Business in Halifax, said immigrants and refugees are often pulled to big urban centres like Toronto in search of networks.
"But if their first point of entry was Halifax and they studied here and felt comfortable, they are more likely to stay," he said. "Also immigrants that arrive at an earlier age are more likely to integrate into society."
Hai Hu is one of those highly coveted immigrants. After completing a PhD in software engineering in Beijing, he launched a tech company and moved to Silicon Valley.
But sky-high rents and pricey talent pushed Hu to look beyond California. He eventually stumbled upon a Nova Scotia start-up visa program, designed to attract foreign entrepreneurs to the province.
"In the Valley, they say you have to raise fast, die fast. But I'm in the business-to-business area and I need more time to build up trust," Hu said of his company, Skyline IT. "Halifax is close to the United States but it's still affordable."
Halifax Mayor Mike Savage said a couple things are driving the city's population boom. The biggest is a growing "stickiness" with immigrants who in the past have landed here and then moved to other places, he said. The city is also a draw for young working professionals in search of a more balanced lifestyle.
"Particularly among young people, it's not just about salary," Savage said. "It's about what kind of life they can have here.
"The demands and the expectations of young people is different than it was a number of years ago. People want to work not only in an interesting city and an interesting company in an interesting field, they want a work-life balance and leisure time."
Yet some of Halifax's boom is a cannibalization of rural regions on the East Coast, rather than Toronto ex-pats or international newcomers moving in. About 1,270 people moved to the city from somewhere else in the province last year, about 15 per cent of the city's total population growth.
And there is at least one sign the city is not yet a fully-fledged boomtown: Halifax lost about 440 people to other parts of Canada last year.
But that doesn't discount Halifax's growth and magnetism for big city deserters. In years past, thousands of locals packed their bags and moved west. Either fewer people are leaving Halifax, or enough people are moving to the city to counteract outmigration.
But population growth isn't the only ingredient to Halifax's dawning boom.
The city's GDP is expected to grow nearly two per cent in 2017, the Conference Board of Canada said. Rising container traffic, a growing services sector and manufacturing buoyed by work on Arctic patrol ships at the Halifax Shipyard will push Halifax's GDP beyond the national average within the next year or two.
Meanwhile, job growth is expected to climb, with 4,000 new jobs over two years curbing unemployment to 5.9 per cent in 2018.
Mike Johnston knows about job growth.
Seventeen years ago, he bought a laptop, put a satellite dish on his suburban Halifax roof and launched the northeastern seaboard's smallest software consulting shop.
It was the summer of 2000. The Truro native had been living in Boston, a would-be doctor who shunned med school after Harvard to throw himself into the heady heyday of software development.
But all that changed as the tech sector was brought to its knees by the dotcom crash, and Johnston was brought back to Nova Scotia by his high school sweetheart and newborn baby. From a suburban Halifax bedroom, Johnston called his tech contacts and potential clients, and nabbed enough contract work with IBM to keep him afloat.
His digital-media company, REDspace, has stayed put in Halifax even when hiring prospects were slim.
To get workers with the right training, Johnston sat down with local community college officials and spelled out what he needed.
The next step was convincing more experienced tech workers to come out east to work for him.
"In past years I've heard outright from senior people in their mid-30s or early 40s -- they've got a family, they've got kids in school in Toronto -- they say, 'If I pick up and move my family and cut my roots and it doesn't work out with you, what else is going on,"' he said. "The reality is now there is a lot happening out here. There are a lot of companies doing neat stuff. Some big like the IBMs of the world, but there is also a growing start-up scene and interesting research and development at the universities."
REDspace now has a payroll of 170 employees -- with 25 joining the payroll in the last six months alone -- in a sprawling, colourful office space in a suburban mall.
If anything, the challenge now is hanging on to top tech workers being wooed by competing technology companies.
"We're an export-driven company and we're doing it all from Halifax," Johnston said. "We mostly work on engaging front-end digital experiences ... But we also do the back-end plumbing that's perhaps less visible and less sexy but drives much of the delivery of streaming video."
Whether REDspace and some rosy Halifax economic and population data are outliers on the city's skyline or signify a growing, evolving Halifax remains to be seen.
And a boomtown, however backed up by the numbers, is not all positive. People grumble about street closures and dust during construction, the lack of parking and uptick in traffic.
Then there's also a changing streetscape -- mostly for condo towers, but new office space as well -- and contentious loss of some historic buildings. And while Halifax's affordable real estate market might be a draw to some accustomed to Toronto prices, declining vacancy rates have pushed up rental costs.
Savage admits a booming town has its downsides. As costs creep up, vulnerable populations might be priced out of the market.
"I visited Calgary in the boom years and as things got better people gravitated towards the city," he said.
"Calgary had the biggest homeless shelter in the country. There aren't very many cities that are doing well that don't have an issue with poverty. We need to make sure no one gets left behind."