Archived information

The Standard on Web Usability replaces this content. This content is archived because Common Look and Feel 2.0 Standards have been rescinded.

Archived information is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

Economic Impact of Marine Related Activities in Canada

Economic Impact - National & Regional

1. National impact

Gross value of output

Marine activities had a gross value of output of just over $30 billion in Canada in 2006 (Table 5.1). 1 About two-thirds of this output was generated in Atlantic Canada and one-third in Pacific Canada. Offshore oil & gas activity on the east coast accounts for most of the difference in total output between the Atlantic and Pacific regions. Marine activities in the Arctic accounted for about 0.2% of the national total.

Table 5.1: Gross value of output by marine activity, Canada and regions, 2006
Gross value of output ($000s) Atlantic Pacific Arctic Canada
Private Sector Seafood
Commercial fishing 1,501,372 318,909 6,000 1,826,281
Aquaculture 467,565 427,466 - 895,031
Fish processing 3,234,566 727,739 5,000 3,967,305
Offshore oil & gas
Oil & gas exploration/extraction 9,121,886 - - 9,121,886
Support activities for oil & gas 186,000 - - 186,000
Transportation
Marine transportation 872,600 1,911,000 - 2,783,600
Support activities 1,003,000 2,484,000 - 3,487,000
Tourism & recreation
Tourism & recreation 1,590,981 2,743,930 2,556 4,337,467
Manufacturing & construction
Shipbuilding 470,000 237,000 - 707,000
Boat building 150,000 209,000 - 359,000
Oil & gas facilities construction 267,785 - - 267,785
Ports and harbours construction 134,422 132,567 - 266,989
Sub-total private sector 17,498,805 8,872,702 13,556 26,379,063
Public sector
National Defence 1,643,200 550,225 - 2,193,425
Stewardship
Fisheries & Oceans 1,021,609 302,648 45,192 1,369,449
Other federal departments 74,600 42,700 4,500 121,800
Provincial departments 71,975 47,000 10,000 128,975
Universities 64,215 41,200 - 105,415
ENGOs 9,776 36,600 - 46,376
Sub-total public sector 2,885,375 1,020,373 59,692 3,965,440
Total 20,384,180 9,893,075 73,248 30,344,503

Note: Commercial fishing output is an input to fish processing, so is excluded from the total. Source: Tables 5.15, 5.25 and 5.29.

Overall impact of ocean activities

Ocean sector activities generated an estimated $17.7 billion in direct GDP in Canada in 2006, creating over 171,000 direct jobs. Table 5.3 provides a summary of overall impacts, grouping activities into seven main sectors to facilitate presentation and discussion.

The ocean sector accounted for 1.2% of the Canadian GDP in 2006. In creating 171,000 direct jobs, ocean activities accounted for 1.1% of total Canadian employment (Table 5.2).

When the scope of ocean sector activities is broadened to include spin-off impacts (indirect and induced activities), the relative importance of the ocean sector increases to 1.9% of national GDP and 2.0% of total employment.

Table 5.2: Ocean activity in the Canadian economy, 2006
Sectors Ocean sector impact Ocean as % of total Canadian
GDP ($ millions)
Direct 17,685 1.2% -
Direct plus spinoff 27,653 1.9% -
Total - - 1,450,490
Employment (FTE)
Direct 171,365 1.1% -
Direct plus spinoff 316,119 2.0% -
Total - - 16,021,180

Source: Table 5.3; Canada totals from Statistics Canada, Cat. No. 384-0002; 2006 Census.

The slight difference in the relative impact of GDP and employment on corresponding national totals is attributable mainly to the structure and performance of the offshore oil & gas industry. It is highly capital intensive and generates substantial returns to and of capital, resulting in relatively low employment per unit of GDP (this is evident from a comparison of the oil & gas industry in Figures 5.1 and 5.2).

Comparative impact of ocean activities – structure and performance

Ocean activities vary widely in their comparative GDP, employment and income impacts. Among the factors that help to explain these differences:

  • Offshore Oil & Gas: this sector leads the next most important industry (transportation) by more than 100% in terms of contribution to direct GDP, but occupies a significantly lower position in terms of its employment and labour income impacts. The strong GDP result is due to the high returns to and of capital flowing from high petroleum prices, while the relatively low employment reflects the capital intensiveness of the industry.
  • Marine Transportation: ranks second in contribution to GDP and employment and ranks first in labour income. The relatively high overall employment impact is attributable largely to the strong backward linkages to road and rail transportation and warehousing.
Table 5.3: Economic impact of marine activities (Atlantic and Pacific only), Canada, 2006
Output, GDP and Income in $000s Employment in full-time equivalent Direct Indirect
GDP Employment Income GDP Employment Income
Private Sector - Seafood
Commercial fishing 929,861 10,098 623,943 220,891 3,416 119,958
Aquaculture 289,010 4,173 121,845 204,659 2,936 102,429
Fish processing 932,433 22,983 650,887 566,486 7,863 214,123
Private Sector - Offshore oil & gas
Oil & gas exploration/extraction 7,753,603 3,334 227,039 952,713 2,800 115,558
Support activities for oil & gas 85,560 488 35,340 35,340 271 13,020
Private Sector - Transportation
Marine transportation 1,211,790 14,506 845,742 497,318 6,633 288,256
Support activities 1,826,641 27,086 1,209,378 633,509 11,718 399,305
Private Sector - Tourism & recreation
Tourism & recreation 1,890,053 45,449 1,449,157 1,300,864 25,045 922,351
Private Sector - Manufacturing & construction
Shipbuilding and boat building 462,390 8,944 386,720 150,070 3,236 115,500
Oil & gas facilities construction 125,607 841 65,926 47,193 423 16,067
Ports and harbours construction 106,796 1,569 69,417 66,655 1,572 57,287
Sub-total private sector 1 15,613,744 139,471 5,685,394 4,675,698 65,914 2,363,855
Public sector - National Defence
National Defence 1,225,623 20,413 1,225,623 282,225 6,724 262,778
Public sector - Stewardship
Fisheries & Oceans 586,354 8,500 586,354 294,719 1,498 85,116
Other federal departments 65,095 650 65,095 14,595 291 10,855
Provincial departments 82,255 596 82,255 17,932 749 23,884
Universities 75,810 1,061 59,629 15,836 221 6,080
ENGOs 35,622 674 31,373 4,819 71 2,288
Sub-total public sector 2 2,070,758 31,894 2,050,329 630,125 9,555 391,000
Total 17,684,503 171,365 7,735,722 5,305,824 75,469 2,754,856

Table 5.3: Economic impact of marine activities (Atlantic and Pacific only), Canada, 2006 (continued)
Output, GDP and Income in $000s Employment in full-time equivalent Induced Total
GDP Employment Income GDP Employment Income
Private Sector - Seafood
Commercial fishing 302,414 3,447 213,573 1,453,167 16,961 957,474
Aquaculture 141,140 2,012 70,409 634,810 9,121 294,683
Fish processing 297,283 5,625 178,830 1,796,202 36,472 1,043,840
Private Sector - Offshore oil & gas
Oil & gas exploration/extraction 435,316 1,365 63,252 9,141,632 7,498 405,850
Support activities for oil & gas 26,598 160 11,160 147,498 919 59,520
Private Sector - Transportation
Marine transportation 553,693 6,380 382,854 2,262,801 27,518 1,516,852
Support activities 796,101 11,713 540,755 3,256,251 50,517 2,149,437
Private Sector - Tourism & recreation
Tourism & recreation 1,017,852 21,402 794,240 4,208,770 91,896 3,165,748
Private Sector - Manufacturing & construction
Shipbuilding and boat building 191,086 3,885 171,900 803,546 16,066 674,120
Oil & gas facilities construction 41,282 285 21,417 214,082 1,549 103,409
Ports and harbours construction 53,708 909 40,686 227,158 4,051 167,390
Sub-total private sector 1 3,856,473 57,182 2,489,074 24,145,916 262,567 10,538,323
Public sector - National Defence
National Defence 451,821 7,910 471,145 1,959,668 35,046 1,959,545
Public sector - Stewardship
Fisheries & Oceans 265,526 2,987 216,288 1,146,599 12,985 887,757
Other federal departments 21,552 277 18,372 101,242 1,218 94,322
Provincial departments 28,214 373 15,790 128,400 1,719 121,929
Universities 25,557 338 19,539 117,570 1,620 85,248
ENGOs 13,078 219 11,161 53,886 964 44,823
Sub-total public sector 2 805,748 12,103 752,295 3,507,366 53,552 3,193,624
Total 4,662,221 69,285 3,241,369 27,653,282 316,119 13,731,947

Table 5.3: Economic impact of marine activities (Atlantic and Pacific only), Canada, 2006 (continued)
Output, GDP and Income in $000s Employment in full-time equivalent Output
Private Sector - Seafood
Commercial fishing 1,820,281
Aquaculture 895,031
Fish processing 3,962,305
Private Sector - Offshore oil & gas
Oil & gas exploration/extraction 9,121,886
Support activities for oil & gas 186,000
Private Sector - Transportation
Marine transportation 2,783,600
Support activities 3,487,000
Private Sector - Tourism & recreation
Tourism & recreation 4,334,911
Private Sector - Manufacturing & construction
Shipbuilding and boat building 1,066,000
Oil & gas facilities construction 267,785
Ports and harbours construction 266,989
Sub-total private sector 1 26,371,507
Public sector - National Defence
National Defence 2,193,425
Public sector - Stewardship
Fisheries & Oceans 1,344,560
Other federal departments 98,450
Provincial departments 249,860
Universities 105,415
ENGOs 46,376
Sub-total public sector 2 3,917,546
Total 30,289,053

1. Sub-total of output value excludes commercial fishing because the value of fisheries output is included in fish processing.
2. Sub-total of output excludes provincial transportation subsidies (provincial ferries) because these are included in marine transportation revenues.
3. Employment impact is adjusted for the increase in the industrial wage index (2.1% from July 2005 to July 2006. Source: Statistics Canada, Table 281-0039).
4. Indirect and induced impacts of fish processing are adjusted to eliminate double counting of commercial fishing activity.

Figure S-1 Ocean GDP by sector, Canada, 2006 ($millions)
A bar graph depicting the total of ocean GDP by sector in Canada for 2006 in millions of dollars. Two gategories are attributed to each sector; direct and spinoff.
Figure S-2 Ocean employment by activity, Canada, 2006 (FTE)
A bar graph depicting the number of ocean employment by activity in Canada for 2006 (FTE). Two gategories are attributed to each activities; direct and spinoff.
Figure S-3 Ocean labour income by activity, Canada, 2005 ($millions)
A bar graph depicting the total of ocean labour income by activity in Canada for 2006 in millions of dollars. Two gategories are attributed to each activities; direct and spinoff.
  • Tourism and Recreation: the strong showing in employment creation is because this activity is essentially a service and tends to be labour intensive. Also, this study systematically quantifies all main segments of the tourism and recreation industry and so provides a comprehensive assessment that has been missing in past studies. The relatively low GDP impact is due mainly to the generally low wages and returns in the industry.
  • Seafood: ranks a distant fourth in contribution to GDP and third in contribution to employment. The relatively low GDP is attributable to generally low returns on capital. The high direct employment figure is due to the labour intensiveness of the industry; a small-boat fishery, particularly on the east coast, supports numerous small processing plants. Few plants are mechanized, with most relying on labour to give them the flexibility they need to adjust to changing resource and market conditions.
  • Manufacturing and Construction: There is relative balance among GDP, employment and income in the goods producing sector. This is not a large sector, generating less than $1 billion in GDP, but the impacts shown in Figures 5.1-5.3 tell only part of the story. Missing from the impacts are marine products manufacturers whose activities are not distinguishable in the official statistics.
  • National Defence: The contribution to GDP is through labour income only (governments do not generate profits), and consequently National Defence ranks below its relative position as measured by employment and income.
  • Public Sector and Research: the federal and provincial government departments, universities and ENGOs comprising this sector occupy a relatively large presence in the marine economy as managers, stewards and researchers. With upwards of 70% of expenditures accruing as personnel salaries, most of the impact occurs at the direct stage; there is limited expenditure available to trigger significant indirect impacts.

2. Atlantic region impacts

Seafood Sector

Activity

  • The commercial fishing industry is composed of some 19,000 mainly independent fishing vessels (Table 5.4) employing about 32,000 (skippers and crew) in primarily seasonal fisheries. Lobster, crab and shrimp are the main species.
  • The aquaculture industry is a mix of vertically integrated and independent operations (including contract growers), with 2,320 licenced sites (not all of which are active). Salmon accounts for 75-80% of production value, with mussels and oysters making up most of the balance.
  • The seafood processing industry consists of 510 establishments, employing some 34,400 workers in mainly seasonal jobs. Most plants buy from independent fishing vessels, with vertical integration generally limited to high capital cost offshore fisheries, including those allowing factory vessels (northern shrimp, scallop and clam).

    Table 5.4: Seafood sector structure, Atlantic Canada, 2006
    Commercial fisheries Aquaculture Processing
    Vessels Jobs Sites Jobs Plants Jobs
    19,000 32,000 2,320 3,350 510 34,400

    Source: provincial departments of fisheries and aquaculture

Production

Atlantic Canada's commercial fisheries have produced about 800-900,000 tonnes (landed weight) of raw material annually, with a value in the $1.5-1.9 billion range (Table 5.5). The value of production has declined since 2002 due in part to reduced landings of key species, and also to the strengthening of the Canadian dollar.

The Atlantic fisheries have undergone a major structural change since the early 1990s when the industry was dependent primarily on groundfish. The collapse of the groundfish stocks is illustrated in Fig. 5.4, with landings dropping from the 650,000 t range to just over 150,000 t in five years, and then to the 100,000 t range in more recent years. Over the same period, landings of the more valuable shellfish species have doubled. The impact on industry economics is evident from Fig. 5.5, which shows that landed value has increased by over 50% (in nominal terms) since 1990, with shellfish accounting for 85% of the total.

Figure 5.4: Atlantic commercial fisheries, quantity landed

A line graph depicting the quantity landed of Atlantic commercial species from 1990 to 2006.

Figure 5.5: Atlantic commercial fisheries, value of landings

A line graph depicting the value of landings of Atlantic commercial species from 1990 to 2006.

Aquaculture shows a steady increase in tonnage and value to 2007, with a slight drop in value 2007 in response largely to pressure on exchange rates (Fig. 5.6 and 5.7). Since 1990, production (quantity and value) have increased about 5-fold in response to rising demand and improved production methods.

Figure 5.6: Atlantic aquaculture quantity produced

A line graph depicting the quantity produced of Atlantic aquaculture by species from 1990 to 2006.

Figure 5.7: Atlantic aquaculture value of production

A line graph depicting the value of production of Atlantic aquaculture by species from 1990 to 2006.

Through the early to mid-2000s, the final product value of the seafood sector (aquaculture and processing) approached $4.0 billion, though the trend has been one of decline with the total dropping to the $3.7 billion range in 2006 (Table 5.5). The rise in aquaculture production was not enough to offset the sharp drop in processed product value in 2005 due to weak markets for snow crab in the U.S.

Table 5.5: Seafood production, Atlantic Canada, 2003-2007
  Commercial fisheries Landings Aquaculture Output Processing Product Seafood industry Export Value
tonnes 000s tonnes 000s 000s 000s 000s
2003 851,024 1,838,861 71,800 300,450 3,652,241 3,952,691 3,371,494
2004 875,540 1,867,209 72,735 285,000 3,538,071 3,823,071 2,965,049
2005 799,719 1,607,962 77,575 363,000 3,259,993 3,622,993 3,172,550
2006 818,544 1,501,372 81,464 467,565 3,234,566 3,702,131 2,965,593
2007 801,617 1,593,618 83,346 423,094 n.a. n.a. 2,821,695

Source: DFO, http://www.dfo-mpo.gc.ca/stats-eng.htm; Statistics Canada, special tabulation Statistics Canada, Cat. No. 301-0006

Offshore Oil & Gas Sector

Activity

Offshore oil & gas extraction activity is to date conducted only on the East Coast of Canada. Three crude oil projects have been developed and are in production on the Grand Banks off Newfoundland and Labrador, with another project in the planning stage. One natural gas project has been developed and is in production on the Scotia Shelf off Nova Scotia, with another project in the planning stage. Key statistics are shown in Table 5.6.

Table 5.6: Offshore oil & gas sector, operating costs and employment, 2006
Projects # Operating costs $ millions Employment FTE # Wells drilled Cost $ millions Employment FTE
4 1,300 3,000 6 185 200

Source: CNLOPB/CNSOPB

Support services (exploration) activities consisted of six wells in 2006, all on the Grand Banks. A drilling program typically consists of a jack-up or semi-submersible rig, supported by supply and safety vessels, helicopters and a range of well finishing and testing services. Exploration activities on the Grand Banks have been fairly steady over the past decade, while disappointing results on the Scotia Shelf have led to a drop-off in exploration in that area.

Production

The Newfoundland and Labrador offshore produced 110 million barrels of crude oil in 2006, with a total value of $8.1 billion (Table 5.7). Production has increased in steps, starting with Hibernia in 1997 and followed by Terra Nova in 2002 and White Rose in 2007 (Fig. 5.8). Rising oil prices since 2002 account for the doubling in output value since 2004 (more than enough to offset the declining value of the U.S. dollar), with revenues rising to the $13.0 billion range in 2008 (Fig. 5.8).

Similar increases in natural gas prices served to push the Sable gas production value to $1.5 billion in 2005. The decline to just over $1.0 billion in 2006 was due to reduced production (geological factors caused a drop in pressure, which was remedied in 2007 with the installation of compression facilities), weaker prices and the reduced value of the U.S. dollar. Increased production coupled with higher natural gas prices pushed revenues to the $1.5 billion range in 2008 (Fig. 5.9).

Table 5.7: Offshore petroleum production, Atlantic Canada, 2002-2006
  Crude oil Natural gas
million bbls $ millions bcf $ millions
2002 104 4,082 193 827
2003 123 4,994 165 1,152
2004 115 5,681 153 1,096
2005 111 7,387 149 1,518
2006 110 8,108 134 1,014
2007 134 10,435 155 1,079
2008 125 12,917 164 1,462

Source: See Appendix A for derivation and sources

Figure 5.8: Atlantic Canada crude oil production, quantity and value

A line graph depicting the Atlantic Canada crude oil production by quantity and value from 1997 to 2008.

Figure 5.9: Atlantic Canada natural gas production, quantity and value

A line graph depicting the Atlantic Canada natural gas production by quantity and value from 2000 to 2008.

Marine Transportation Sector

Activity

Atlantic Canada has 60 commercial ports, nine larger ones managed by Canada Port Authorities and 51 regional or local ports administered by Transport Canada. Four main segments characterize the industry: bulk, container, ferry service and cruise ship.

  • Bulk: several ports in the region handle international bulk cargoes including Québec City, Saint John, Halifax, Come-By-Chance and Port Hawkesbury (crude oil and refined products); Sept-Îles and Port Cartier (iron ore); Sydney, Belledune and Dalhousie (coal).
  • Container: Montreal and Halifax are Canada's second and third largest container ports (after Vancouver), with both also handing a range of bulk products including wheat and gypsum. Montréal container traffic has steadily increased over the past 30 years, and the port is considering further expansion. St. John's also handles containers (domestic service), while a service to the Caribbean operates from the Port of Saint John.
  • Ferry service: several services operate in the region, carrying over one million passengers and several hundred thousand cars and trucks. The main ones are North Sydney-Port Aux Basques and North Sydney-Argentia (integral components of the Newfoundland and Labrador supply chain); Yarmouth-Maine; Nova Scotia-PEI, Saint John-Digby and PEI-Madgalen Islands.
  • Cruise ship: traffic has increased steadily over the past decade, with Halifax and Saint John ranking as the 3rd and 4th largest ports of call in Canada. Other ports include Sydney and Québec City.

Production

The marine component of the water transportation sector generated output valued at an estimated $1.9 billion in Atlantic Canada in 2005 (latest year for shipping data). The marine transportation segment accounted for $872 million, while support activities contributed an estimated $1,000 million (Table 5.8).

Table 5.8: Marine transportation sector production, Atlantic Canada, 2001-2005
  # Vessel movements Cargo
(000 t)
Cargo
(% container)
Water transportation revenues Support activities revenues $millions Total revenues1 # Pilotage assignments
2001 - - 8.6 615 707 1,322 30,406
2002 14,079 217,060 8.8 668 768 1,436 30,953
2003 14,324 248,323 8.1 728 837 1,565 32,509
2004 13,807 245,752 8.8 750 863 1,613 32,287
2005 16,273 257,472 8.4 823 946 1,769 33,887
2006 n.a. n.a. n.a. 872 1,003 1,875 n.a.

Source: Statistics Canada, Shipping in Canada 2005; Transport Canada, Transportation in Canada 2007
12006 revenue data estimated from 2006 GDP using a 2005 GDP/Revenue ratio of .367.

Industry activity is characterized by a rising number of vessel movements and increased cargo tonnage. The figures reflect the importance of shipping in supporting Atlantic Canada's resource industries. Though not obvious from the data, the cargo tonnage also indicates increased container traffic (a steady percentage of an increasing tonnage), a reflection of the importance of the eastern Canadian ports (Montreal and Halifax) to European-North American trade.

Tourism and Recreation

Activity

Due largely to the scope and focus of data sources, tourism is broken down into three expenditure-driven areas for this analysis: marine recreational fishing, cruise ship travel, and coastal tourism/recreation including coastal travel by tourists, marine boating and beach recreational activities by local residents. In each case the activities tend to be seasonal, lasting 2- 6 months in Atlantic Canada.

The data in Table 5.9 provide an overview of the key industry indicators, including average spending per trip or person that forms the basis of the impact estimates. With recreational fishing and coastal recreation, spending is on travel, accommodation, food, charters and equipment. Regretably, data for boating for years prior to 2006 are not available. A study was conducted in 2002 but differences in methodology suggest the results may not be comparable (see Appendix C for details). With cruise ship travel, impacts are driven by expenditures by passengers and crew at ports of call. Excluded from the spending figures in Table 5.9 is spending by cruise ships on port fees, fuel and provisions (these expenditures are captured by Water Transportation).

Table 5.9: Tourism and recreation activity, Atlantic Canada, 2006
Recreational fishing Cruise ship Coastal tourism
Days Avg spend/day Passengers Avg spend/passenger Days Avg spend/day
950 123 486 118 24,634 40

Source: Appendix C

Production

Marine tourism and recreation activities generated expenditures estimated at $1.6 billion in Atlantic Canada in 2006 (Table 5.10). Spending by tourists engaged in coastal activities accounts for almost 90% of total spending, followed by and recreational fishing at 7% and cruise ship travel at 3%.

Table 5.10: Tourism expenditures in Atlantic Canada, 2002-2006
Year Recreational fishing Cruise ship Coastal Tourism Coastal Recreation Coastal Boating Total
2002 148 61 940 164 n.a. n.a.
2003 140 57 871 162 n.a. n.a.
2004 132 71 870 160 n.a. n.a.
2005 124 59 842 158 n.a. n.a.
2006 116 57 818 156 444 1,591

Source: Appendix C

Marine Construction

Activity

Marine construction consists of construction activity taking place in the marine environment. Two types of marine construction are included in this study: ports and harbours and offshore oil & gas development (installation of facilities). Quantifying the impact of marine construction draws on four distinct data sources:

  • Port Authorities and port operators/users for construction of docks and facilities
  • Fisheries and Oceans Canada for construction and maintenance of small craft harbours
  • Department of National Defence for construction and maintenance of base facilities
  • Oil & gas industry for offshore field development.

Production

The value of marine construction activity in Atlantic Canada declined from a high of $517 million in 2003 to about $250 million in 2006, with an average annual expenditure of $397 million (the figures in Table 5.11 are adjusted for inflation and expressed in 2005 dollars). Development of offshore oil & gas fields off Newfoundland and Labrador and Nova Scotia accounts for about twothirds of the total, with completion of projects in this sector explaining the declining trend. Economic impacts are estimated using the 5-year average capital expenditures.

Table 5.11: Expenditures in Marine Construction in Atlantic Canada, 2002-2006
Year Ports Small craft harbours National Defence Oil & gas Total
2002 58,995 n.a. 61,442 316,815 n.a.
2003 50,773 26,027 69,499 369,957 516,254
2004 44,222 24,922 57,862 329,124 456,131
2005 45,902 21,525 55,830 204,750 328,007
2006 58,061 23,279 49,833 118,272 249,445
5-year avg. 51,590 23,938 58,893 267,784 309,967

Source: Appendix D

Shipbuilding and boat building

Activity

The ship and boat building industry has two components – Ship Building and Repairing and Boat Building – which combined generated revenues in the $620 million range in Atlantic Canada in 2006.

Atlantic Canada's ship and boat building industry consists of some 250 establishments. The few shipyards in the region conduct mainly repair and refit work on commercial, navy and Coast Guard vessels. The yards have enjoyed some success in building vessels for the navy and Coast Guard, but there is limited demand for new ships in Canada. Yards find it difficult to compete in international markets because of the degree of subsidization occurring in most countries.

The bulk of the new building occurs in boat yards, most of which specialize in fishing vessels. A few have also ventured into the recreational vessel market with good results. Both these markets are highly sensitive to underlying economic conditions. Good catches and rising prices in the early 2000s meant strong demand for fishing vessels. Demand diminished after 2006 in response to declining catches and weak markets. The outlook for both recreational and fishing vessels is poor in the economic climate of 2009.

Production

The ship and boat building industry generated output valued at an estimated $620 million in Atlantic Canada in 2006. The shipbuilding segment accounted for $285 million, while the boat building segment contributed an estimated $335 million (Table 5.12).

Table 5.12: Ship and boatbuilding (marine) production, Atlantic Canada, 2002-2006
  Ship building & repairing Boatbuilding Total
# establishments revenues $ millions # establishments revenues $ millions # establishments revenues $ millions
2002 - 433 - 325 - 758
2003 - 251 - 356 - 607
2004 80 304 420 371 500 675
2005 66 228 205 270 271 498
2006 61 285 191 335 252 619

Source: Industry Canada, http://www.ic.gc.ca/cis-sic/cis-sic.nsf/IDE/cis33661este.html Statistics Canada, special tabulation and Cat. No. 301-0006

Public Sector

Federal government

Six federal departments play a significant role in the Atlantic Region marine economy (Table 5.13):

  • National Defence carries out its defence, maritime control and surveillance activities from naval and air bases in Nova Scotia, Newfoundland and Labrador and Québec, with support services at headquarters in Ottawa.
  • Fisheries and Oceans carries out its fisheries, oceans and Coast Guard responsibilities from five regional centres in Atlantic Canada: St. John's, Halifax, Moncton and Québec City, with central support from headquarters in Ottawa.
  • Transport Canada carries out its marine safety, security and management functions at several ports in eastern Canada and from its regional offices in Moncton and headquarters in Ottawa.
  • Natural Resources Canada carries out its oceans related activities in the Atlantic Region from facilities at the Bedford Institute of Oceanography (Geological Survey of Canada – Atlantic) in Nova Scotia, with fieldwork conducted throughout the region and the eastern Arctic.
  • Canadian Food Inspection Agency carries out its seafood inspection and monitoring work from several centres in the Atlantic region.
  • Environment Canada carries out its work from Atlantic regional headquarters in Halifax, with offices in other major centres in the region.
Table 5.13: Public sector role in the ocean economy, Atlantic Canada, 2006
Sector Expenditures ($000s) Employment (FTE)
Federal
National Defence 1,643,120 13,195
Fisheries and Oceans 1,021,609 6,850
Transport Canada 36,700 500
Natural Resources Canada 24,000 80
Canadian Food Inspection Agency 9,600 112
Environment Canada 4,300 25
Sub-total federal 2,739,329 20,762
Provincial
Seafood 30,250 n.a.
Offshore oil & gas 25,000 n.a.
Transportation (ferries) 19,550 n.a.
Tourism 19,275 n.a.
Sub-total provincial 94,075  
Universities
Universities 64,215 612
ENGOs
ENGOs 9,776 180
Total 2,907,395 n.a.

Source: Departments/Agency, special tabulations; Appendix F. Note: Transport Canada expenditures are net of subsidies (see Table F-4).

Provincial governments

All five provincial governments in eastern Canada participate in the management and administration of at least some ocean activities; mainly fish processing and marine transportation, but also offshore oil & gas, tourism and environment. Expenditures are summarized in Table 5.13.

Atlantic region impact

Ocean sector activities generated an estimated $12.9 billion in direct GDP in Atlantic Canada in 2006, creating about 97,600 direct jobs (Table 5.14). Table 5.15 (next page) provides a summary of overall impacts.

The ocean sector accounted for 3.5% of Atlantic Canada GDP in 2006. In creating 97,600 direct jobs, the ocean sector accounted for 2.0% of total Atlantic Canadian employment (Table 5.14).

When the scope of ocean sector activities is broadened to include spin-off impacts (indirect and induced activities), the relative importance of the ocean sector increases to 5.0% of regional GDP and 3.7% of total employment.

Table 5.14: Ocean activity in the Atlantic Canada economy, 2006
  Ocean sector impact Ocean as % of total Atlantic Canada
GDP ($ millions)
Direct 12,923 3.5% -
Direct plus spinoff 18,430 5.0% -
Total - - 369,398
Employment (FTE)
Direct 97,619 2.0% -
Direct plus spinoff 175,790 3.7% -
Total - - 4,782,245

Source: Totals from Statistics Canada, Cat. No. 384-0002; 2006 Census.

The relative impact of ocean activities in the regional economy is three times higher than at the national level. This should not be surprising since most of the activity occurs in the smaller regional economy. Nonetheless, readers should note that recent studies in Newfoundland and Labrador and in Nova Scotia found that marine activities accounted for substantially higher shares of provincial totals than those appearing in Table 5.14 (e.g., 40% of provincial GDP in Newfoundland and Labrador and 15% of provincial GDP in Nova Scotia).2 Though much of the same data used in those studies forms the basis of the impacts in this report, the difference in the relative impacts is explained by the much larger regional economy (including Québec) that forms the context of this study.

Table 5.15: Economic impact of ocean activities, Atlantic Canada, 2006
Output, GDP and Income in $000s
Employment in full-time equivalent
Direct Indirect
GDP Employment Income GDP Employment Income
Private Sector - Seafood
Commercial fishing 786,352 9,621 540,589 169,864 2,758 87,827
Aquaculture 173,594 2,511 70,549 76,419 1,194 38,309
Fish processing 712,656 18,606 526,772 479,158 6,906 174,825
Private Sector - Offshore oil & gas
Oil & gas exploration/extraction 7,753,603 3,334 227,039 952,713 2,800 115,558
Support activities for oil & gas 85,560 488 35,340 35,340 271 13,020
Private Sector - Transportation
Marine transportation 351,840 5,146 272,330 115,078 1,971 77,916
Support activities 534,961 10,140 413,830 236,060 2,909 101,090
Private Sector - Tourism & recreation
Tourism & recreation 710,163 18,547 488,090 476,391 11,603 426,826
Private Sector - Manufacturing & construction
Shipbuilding and boat building 265,310 6,604 275,070 80,800 2,313 77,450
Oil & gas facilities construction 125,607 841 65,926 47,193 423 16,067
Ports and harbours construction 53,769 790 34,950 26,884 923 33,425
Sub-total private sector 1 11,553,415 76,626 2,950,484 2,695,900 34,071 1,162,314
Public sector - National Defence
National Defence 774,438 12,919 774,438 227,202 5,754 229,764
Public sector - Stewardship
Fisheries & Oceans 444,109 6,378 444,109 206,951 1,098 63,931
Other federal departments 49,593 487 49,593 10,302 219 8,470
Provincial departments 49,089 433 49,089 10,825 357 11,565
Universities 45,322 600 35,366 9,577 149 4,020
ENGOs 7,440 176 6,484 1,080 18 458
Sub-total public sector 2 1,369,991 20,993 1,359,078 465,937 7,595 318,208
Total 12,923,406 97,619 4,309,562 3,161,838 41,666 1,480,522

Table 5.15: Economic impact of ocean activities, Atlantic Canada, 2006 (continued)
Output, GDP and Income in $000s
Employment in full-time equivalent
Induced Total
GDP Employment Income GDP Employment Income
Private Sector - Seafood
Commercial fishing 236,272 3,109 173,386 1,192,488 15,487 801,802
Aquaculture 58,297 957 30,014 308,311 4,662 138,872
Fish processing 222,756 4,517 139,095 1,414,570 30,028 840,692
Private Sector - Offshore oil & gas
Oil & gas exploration/extraction 435,316 1,365 63,252 9,141,632 7,498 405,850
Support activities for oil & gas 26,598 160 11,160 147,498 919 59,520
Private Sector - Transportation
Marine transportation 131,346 2,029 108,450 598,264 9,146 458,696
Support activities 221,745 3,725 157,904 992,766 16,773 672,824
Private Sector - Tourism & recreation
Tourism & recreation 336,388 8,904 285,209 1,522,942 39,054 1,200,124
Private Sector - Manufacturing & construction
Shipbuilding and boat building 100,527 2,873 119,505 446,637 11,790 472,025
Oil & gas facilities construction 41,282 285 21,417 214,082 1,549 103,409
Ports and harbours construction 22,157 467 20,271 102,810 2,180 88,646
Sub-total private sector 1 1,832,685 28,389 1,129,661 16,082,001 139,086 5,242,459
Public sector - National Defence
National Defence 279,711 5,286 301,676 1,281,351 23,959 1,305,878
Public sector - Stewardship
Fisheries & Oceans 187,322 2,205 159,087 838,382 9,681 667,127
Other federal departments 14,822 204 13,781 74,716 910 71,843
Provincial departments 14,521 202 8,328 74,434 992 68,982
Universities 13,037 172 10,454 67,936 921 49,840
ENGOs 2,199 48 1,938 10,719 242 8,880
Sub-total public sector 2 511,611 8,116 495,264 2,347,540 36,704 2,172,550
Total 2,344,296 36,505 1,624,925 18,429,540 175,790 7,415,009

Table 5.15: Economic impact of ocean activities, Atlantic Canada, 2006 (continued)
Output, GDP and Income in $000s
Employment in full-time equivalent
Output
Private Sector - Seafood
Commercial fishing 1,501,372
Aquaculture 467,565
Fish processing 3,234,566
Private Sector - Offshore oil & gas
Oil & gas exploration/extraction 9,121,886
Support activities for oil & gas 186,000
Private Sector - Transportation
Marine transportation 872,600
Support activities 1,003,000
Private Sector - Tourism & recreation
Tourism & recreation 1,590,981
Private Sector - Manufacturing & construction
Shipbuilding and boat building 620,000
Oil & gas facilities construction 267,785
Ports and harbours construction 134,422
Sub-total private sector 1 17,498,805
Public sector - National Defence
National Defence 1,643,200
Public sector - Stewardship
Fisheries & Oceans 1,041,912
Other federal departments 74,600
Provincial departments 94,080
Universities 64,215
ENGOs 9,776
Sub-total public sector 2 2,910,223
Total 20,409,028

1. Sub-total of output value excludes commercial fishing because the value of fisheries output is included in fish processing.
2. Sub-total of output excludes provincial transportation subsidies (provincial ferries) because these are included in marine transportation revenues.
3. Employment impact is adjusted for the increase in the industrial wage index (2.1% from July 2005 to July 2006. Source: Statistics Canada, Table 281-0039).
4. Indirect and induced impacts of fish processing are adjusted to eliminate double counting of commercial fishing activity.

3. Pacific region impacts

Seafood Sector

Activity

  • The commercial fishing industry is composed of some 2,000 mainly independent fishing vessels (Table 5.16) employing about 8,000 (skippers and crew). Groundfish (halibut & redfish), salmon, clam, crab and shrimp are the main species. Generally, the industry has been in steady decline over the past 20 years, with key species such as salmon and clam at a fraction of their earlier levels.

    Table 5.16: Seafood sector structure, Pacific Canada, 2006
    Commercial fisheries Aquaculture Processing
    Vessels Jobs Sites Jobs Plants Jobs
    2,000 ~8000 586 2,100 242 3,700

    Source: BC Ministry of Environment, BC Seafood Industry Year in Review, 2007

  • The aquaculture industry is composed of 586 sites, creating some 2,100 jobs. Atlantic Salmon accounts for 95% of production value, with oyster and clam making up most of the balance.
  • The seafood processing industry consists of 242 establishments, employing some 3,700 workers. Plants handle fish from the capture fisheries as well as the aquaculture sector.

Production

Over the past decade, Pacific Canada's commercial fisheries have typically produced 200- 250,000 tonnes (landed weight) of raw material annually, with a value in the $300-350 million range (Table 5.17). This is down from the early 1990s when landings were in the 300,000 t range, with landed value of $400 million or more. Figures 5.10 and 5.11 show that the drop in tonnage and value from the early 1990s is accounted for mainly by declining salmon stocks. Reduced groundfish landings have contributed to the slight decline since 2004.

Figure 5.10: Pacific commercial fisheries quantity landed

A line graph depicting the quantity landed of Pacific commercial species from 1990 to 2006.

Figure 5.11: Pacific commercial fisheries landed value

A line graph depicting the landed of value of Pacific commercial species from 1990 to 2006.

Aquaculture shows a substantial increase in tonnage and value to 2002, followed by a sharp drop in tonnage and value to 2004 (attributable to weak markets and pressure on exchange rates), and then a return to strong growth up to 2006 (Figures 5.12 and 5.13). Output value has increased from a few million dollars in 1990 to over $400 million in 2006. Atlantic salmon accounts for over 95% of product value.

Figure 5.12: Pacific aquaculture quantity produced

A line graph depicting the quantity produced of Pacific aquaculture by species from 1990 to 2006.

Figure 5.13: Pacific aquaculture value of production

A line graph depicting the value of production of Pacific aquaculture by species from 1990 to 2006.

Through the early to mid-2000s, the final product value of the seafood sector exceeded $775 million, with a decline in 2006 to the $727 million range (Table 5.17).

Table 5.17: Seafood production, Pacific Canada, 2003-2007
  Commercial fisheries Landings Aquaculture Output Processing Product Seafood industry Export Value
tonnes $000s tonnes $000s $000s $000s $000s
2003 217,658 346,522 75,126 273,531 649,085 922,616 996,791
2004 254,720 346,219 65,666 241,828 775,539 1,017,367 986,723
2005 248,440 330,022 73,624 337,158 719,912 1,057,070 995,607
2006 211,497 318,909 80,609 427,466 727,739 1,155,205 986,886
2007 171,011 293,925 80,430 364,400 n.a n.a. 904,899

Source: DFO, http://www.dfo-mpo.gc.ca/stats-eng.htm; Statistics Canada, special tabulation Statistics Canada, Cat. No. 301-0006

Offshore Oil & Gas Sector

Federal and provincial moratoria, in place since 1972, prohibit offshore oil and gas exploration off the coast of British Columbia. Though the Geological Survey of Canada in its most recent (1988) report suggests substantial quantities of recoverable reserves of crude oil and natural gas may exist, any economic impact from their development (and figures from Atlantic Canada indicate this could be substantial) would be contingent on lifting these moratoria.

Marine Transportation Sector

Activity

The Pacific coast has 21 commercial ports, six larger ones managed by Canada Port Authorities and 15 regional or local ports administered by Transport Canada. The marine transportation industry is composed of three main segments: bulk, container and ferry service (the NAICS definition excludes cruise ship travel because it involves not transportation from one port to another, but embarking and disembarking at the same location; for purposes of this study, the impact of the cruise industry is captured under tourism).

  • Bulk: several Pacific coast ports handle bulk cargo including Port Metro Vancouver (coal, sulfur, forest products and automobiles), Prince Rupert (coal and grain), and Nanaimo and Port Alberni (forest products).
  • Container: Vancouver is Canada's largest container port with four terminals (Fraser, Deltaport, Centerm and Vanterm). A new container terminal opened in Prince Rupert in late 2007, aimed at picking up Asia-North America traffic and alleviating congestion in other west coast ports.
  • Ferry service: BC Ferries, with 36 vessels operating on 25 routes (and 47 terminals), is the largest ferry operator in the world by number of vessels. In 2005 it handled 21.7 million passengers and 8.5 million vehicles. Four new ferries are entering service or are on order (none being built in Canadian shipyards).

Production

Marine transportation generated output valued at an estimated $4.4 billion in the Pacific region in 2006. Container cargo accounts for 16% of total tonnage, about double the Canadian average. This reflects the increasing importance of the west coast as a point of entry for manufactured products from the Far East. Shipping and ferries accounted for $1.9 billion in revenue, while support activities contributed an estimated $2.5 billion (Table 5.18).

Table 5.18: Marine transportation production, Pacific region, 2001-2005
Year # Vessel movements Cargo
(000 t)
Cargo
(% container)
Water transportation revenues Support activities revenues $millions Total revenues # Pilotage assignments
2001 - - 12.0 1,406 1,828 3,234 13,435
2002 20,748 112,893 14.9 1,523 1,980 3,503 12,655
2003 21,425 118,377 16.3 1,641 2,133 3,774 12,952
2004 21,645 127,750 16.9 1,659 2,157 3,816 13,002
2005 21,491 133,055 16.5 1,803 2,344 4,147 13,219
2006 n.a. n.a. n.a. 1,911 2,484 4,395 n.a.

Source: Statistics Canada, Shipping in Canada 2005; Transport Canada, Transportation in Canada 2007 *2006 revenue data estimated from 2006 GDP using a 2005 GDP/Revenue ratio of .367.

Tourism and Recreation

Activity

Tourism is broken down into three expenditure-driven areas for this analysis: marine recreational fishing, cruise ship travel, and coastal tourism in the form of water-based recreational activities.

The data in Table 5.19 provide an overview of the key industry indicators, including average spending per trip or person that forms the basis of the impact estimates. With recreational fishing and coastal recreation, spending is on travel, accommodation, food, charters and equipment. Boating is included under coastal tourism/recreation, though due to limitations with the data, neither trips nor average expenditures/trip are available and are not included in Table 5.19. Estimated expenditures for boating are included under coastal tourism/recreation in Table 20.

With cruise ship travel, impacts are driven by expenditures by passengers and crew at ports of call. Excluded in the average spending figure in Table 5.19 is spending by cruise ships on port fees, fuel and provisions.

Table 5.19: Tourism and recreation activity, Pacific, 2006
Recreational fishing Cruise ship Cruise ship
Days (000s) Avg spend/day Days (000s) Avg spend/day Days (000s) Avg spend/day
2,260 292 1,263 323 11,643 64

Source: Appendix C

Production

Marine tourism activity makes a major contribution to the Pacific ocean economy, generating expenditures estimated at $2.7 billion in 2006 (Table 5.20). Cruising has been a major growth industry, with Vancouver (a home port) and Victoria placing first and second among Canada's cruise ship ports. Prince Rupert is also an important port of call on the increasingly popular cruises to Alaska. Spending by tourists engaged in recreational fishing has also increased. Coastal tourism and recreation are the largest sources of impact, accounting for 60% of total expenditures. Regretably, data for boating for years prior to 2006 are not available. A study was conducted in 2002 but differences in methodology suggest the results may not be comparable (see Appendix C for details).

Table 5.20: Tourism expenditures in Pacific region, 2002-2006
Year Recreational fishing Cruise ship Coastal Tourism Coastal Recreation Coastal Boating Total
2002 545 258 682 57 n.a. n.a.
2003 574 268 615 57 n.a. n.a.
2004 604 328 632 57 n.a. n.a.
2005 633 373 661 57 n.a. n.a.
2006 662 408 691 57 926 2,744

Source: Appendix C

Marine Construction

Activity

This activity consists of port and harbour construction. There has been no offshore oil & gas development.

Quantifying the impact of marine construction draws on four data sources:

  • Port Authorities and port operators/users for construction of works including docks and cargo/passenger handling facilities
  • Fisheries and Oceans Canada for construction and maintenance of small craft harbours
  • Department of National Defence for construction and maintenance of naval bases and facilities
  • BC Ferries for construction of terminal facilities

Production

The value of marine construction activity in the Pacific region almost doubled over the period, rising from just under $100 million in 2002 to $190.7 million in 2005, with an average expenditure of $132.6 million (the figures in Table 5.21 are adjusted for inflation and expressed in 2005 dollars). Port development at Prince Rupert (a new container terminal) and expansion in Vancouver account for two-thirds of total expenditures. Economic impacts are estimated using the 5-year average capital expenditures.

Table 5.21: Marine Construction in the Pacific region, 2002-2006
Year Ports Small craft
harbours
National
Defence
BC Ferries Total
2002 36,440 n.a. 21,077 39,378 n.a.
2003 18,865 2,750 9,533 39,574 70,721
2004 39,069 3,009 15,197 73,630 130,906
2005 44,834 3,569 41,289 101,000 190,692
2006 81,502 4,225 38,701 45,806 170,234
5-year avg. 44,142 3,388 25,159 59,878 132,567

Source: Appendix D

Shipbuilding and boat building

Activity

The ship and boat building industry has two components – Ship Building and Repairing and Boat Building – which combined generated revenues in the $450 million range in the Pacific region in 2006.

The BC ship and boat building industry consists of some 330 establishments. Among these are four major shipbuilders: Victoria and Vancouver Shipyards (part of the Washington Marine Group), Allied Shipbuilders in Vancouver and the Nanaimo Shipyard Group. The Victoria Shipyard completed construction of eight navy training vessels in 2008, but otherwise, the yards are occupied mainly with repairs, refits and conversions for DND, Coast Guard and BC Ferries. BC's boat yards, which make up the bulk of the industry, specialize in pleasure craft and fishing vessels, and most are relatively small operations.

Production

The ship and boat building industry generated output valued at $446 million in the Pacific region in 2006. The shipbuilding segment accounted for $237 million, while the boat building segment contributed $209 million (Table 5.22).

Table 5.22: Ship and boatbuilding (marine) production, Pacific, 2002-2006
Year Ship building & repairing Boatbuilding Total
# establishments revenues $ millions # establishments revenues $ millions # establishments revenues $ millions
2002 - 175 - 225 - 400
2003 - 217 - 228 - 445
2004 111 213 245 181 356 394
2005 53 222 251 191 304 413
2006 74 237 259 209 333 446

Source: Industry Canada, http://www.ic.gc.ca/cis-sic/cis-sic.nsf/IDE/cis33661este.html Statistics Canada, special tabulation and Cat. No. 301-0006

Public Sector

Federal government

Six federal departments play a significant role in the Pacific Region ocean economy (Table 5.22):

  • National Defence carries out its defence, maritime control and surveillance activities from naval and air bases in Esquimalt and Comox.
  • Fisheries and Oceans carries out its fisheries, oceans and Coast Guard responsibilities from its regional headquarters in Vancouver and from 25 coastal offices, including Victoria where the Coast Guard is based.
  • Transport Canada carries out its marine safety, security and management functions at several ports in the province and from its regional offices in Vancouver.
  • Natural Resources Canada carries out its oceans related activities in the Pacific region from facilities at the Pacific Geoscience Centre (Geological Survey of Canada – Pacific Division), with fieldwork conducted along the west coast.
  • Canadian Food Inspection Agency carries out its seafood inspection and monitoring work from several centres in BC.
  • Environment Canada carries out its programs from Pacific regional headquarters in Vancouver.

Provincial government

The BC government participates in the management and administration of several ocean activities; mainly ferries, aquaculture and fish processing, tourism and environment. Expenditures are summarized in Table 5.23. Subsidies to the BC ferry system are not included in the expenditures used to estimate economic impact.

Table 5.23: Public sector role in the ocean economy, Pacific, 2006
Sector Expenditures ($000s) Employment (FTE)
Federal
National Defence 550,225 7,675
Fisheries and Oceans 302,648 2,365
Transport Canada 13,100 175
Natural Resources Canada 2,000 30
Canadian Food Inspection Agency 2,750 40
Environment Canada 6,000 26
Sub-total federal 876,723 10,311
Provincial
Transportation (ferries) 108,400 n.a.
Seafood 10,000 n.a.
Tourism 16,420 n.a.
Other 21,000 n.a.
Sub-total provincial 155,820 -
Universities
Universities 41,200 470
ENGOs
ENGOs 36,600 510
Total 1,032,543 n.a.

Source: Departments/Agency, special tabulations; Appendix F. Note: Transport Canada expenditures are net of subsidies (see Table F-4).

Pacific region impact

Ocean sector activities generated an estimated $4.8 billion in direct GDP in the Pacific region in 2006, creating over 73,600 direct jobs. Table 5.24 provides a summary of overall impacts, with impacts by activity set out in Table 5.25.

The ocean sector accounted for 2.6% of British Columbia GDP in 2006. In creating over 73,600 direct jobs, the ocean sector accounted for 3.5% of total British Columbia employment (Table 5.24).

When the scope of ocean sector activities is broadened to include spin-off impacts (indirect and induced activities), the relative importance of the ocean sector increases to 5.0% of provincial GDP and 6.7% of total employment.

Table 5.24: Ocean activity in the Pacific region economy, 2006
  Ocean sector impact Ocean as % of total British Columbia
GDP ($ millions)
Direct 4,761 2.60% -
Direct plus spinoff 9,221 5.00% -
Total - - 182,743
Employment (FTE)
Direct 73,646 3.50% -
Direct plus spinoff 140,204 6.70% -
Total - - 2,092,765

Source: Totals from Statistics Canada, Cat. No. 384-0002; 2006 Census.

The overall value of output and impact results in Table 5.25 are 17% lower than the estimates in a 2007 study of the economic impact of ocean activities in British Columbia.3 The major differences between the findings arise mainly from differences in the scope of what is included in the respective studies. Differences in the output values for certain activities and the size of the multipliers used to estimate impacts contribute to the differences in a minor way.

  • Scope: the GSGislason report includes two activities – the marine component of forestry (an example of "own-account" water transportation) and Ocean High Tech manufacturing – not included in this study. Combined, they account for two-thirds of the difference in overall output value and GDP impact.
  • Output value: the estimated value of ocean tourism (recreation) is 20% higher in the Gislason study (Gislason: $3.3 billion vs. this report: $2.7 billion). This is more than offset by the difference in water transportation (Gislason study: $3.6 billion vs. this report: $4.4 billion). Since tourism and water transportation combined account for at least 60% of the direct GDP impact in both studies, the refinement of the methods used to estimate output value of these activities is essential. The estimates of output value of all other activities are comparable.
  • Multipliers: the multipliers account for a small difference in the impacts. The indirect GDP impact adds 24% to the direct impact in the Gislason study; it adds 21% in this study. The induced GDP impact adds about 30% to direct and indirect impacts in both studies. These differences would be accounted for in part by the different I-O model versions used (2003 vs. 2005).

 

Table 5.25: Economic impact of ocean activities, Pacific, 2006
Output, GDP and Income in $000s
Employment in full-time equivalent
Direct Indirect
GDP Employment Income GDP Employment Income
Private Sector - Seafood
Commercial fishing 143,509 434 82,916 51,025 656 31,891
Aquaculture 115,416 1,662 51,296 128,240 1,742 64,120
Fish processing 219,777 4,362 123,716 87,329 958 39,298
Private Sector - Offshore oil & gas
Oil & gas exploration/extraction - - - - - -
Support activities for oil & gas - - - - - -
Private Sector - Transportation
Marine transportation 859,950 9,358 573,300 382,200 4,661 210,210
Support activities 1,291,680 16,933 794,880 397,440 8,807 298,080
Private Sector - Tourism & recreation
Tourism & recreation 1,179,890 26,875 960,376 823,179 13,437 493,907
Private Sector - Manufacturing & construction
Shipbuilding and boat building 197,080 2,340 111,650 69,270 924 38,050
Oil & gas facilities construction - - - - - -
Ports and harbours construction 53,027 779 34,467 39,770 649 23,862
Sub-total private sector 1 4,060,329 62,744 2,732,601 1,978,453 31,834 1,199,418
Public sector - National Defence
National Defence 451,185 7,494 451,185 55,023 970 33,014
Public sector - Stewardship
Fisheries & Oceans 142,245 2,122 142,245 87,768 400 21,185
Other federal departments 15,503 164 15,503 4,293 72 2,385
Provincial departments 33,166 163 33,166 7,107 392 12,319
Universities 30,488 461 23,896 6,180 72 2,060
ENGOs 28,182 498 24,522 3,660 53 1,830
Sub-total public sector 2 700,768 10,901 690,516 164,030 1,959 72,793
Total 4,761,096 73,646 3,423,116 2,142,483 33,793 1,272,211

Table 5.25: Economic impact of ocean activities, Pacific, 2006 (continued)
Output, GDP and Income in $000s
Employment in full-time equivalent
Induced Total
GDP Employment Income GDP Employment Income
Private Sector - Seafood
Commercial fishing 66,142 338 40,183 260,676 1,428 154,990
Aquaculture 82,843 1,055 40,396 326,499 4,459 155,811
Fish processing 74,526 1,108 39,735 381,632 6,428 202,748
Private Sector - Offshore oil & gas
Oil & gas exploration/extraction - - - - - -
Support activities for oil & gas - - - - - -
Private Sector - Transportation
Marine transportation 422,331 4,346 274,229 1,664,481 18,365 1,057,739
Support activities 574,301 7,979 382,536 2,263,421 33,720 1,475,496
Private Sector - Tourism & recreation
Tourism & recreation 681,043 12,497 508,999 2,684,112 52,809 1,963,282
Private Sector - Manufacturing & construction
Shipbuilding and boat building 90,559 1,012 52,395 356,909 4,276 202,095
Oil & gas facilities construction - - - - - -
Ports and harbours construction 31,551 443 20,415 124,348 1,871 78,745
Sub-total private sector 1 2,023,296 28,778 1,358,886 8,062,078 123,356 5,290,905
Public sector - National Defence
National Defence 172,110 2,624 169,469 678,317 11,087 653,667
Public sector - Stewardship
Fisheries & Oceans 78,204 782 57,200 308,217 3,305 220,630
Other federal departments 6,730 73 4,591 26,526 308 22,479
Provincial departments 13,693 172 7,462 53,966 726 52,947
Universities 12,467 165 9,085 49,135 699 35,041
ENGOs 10,826 171 9,223 42,668 722 35,575
Sub-total public sector 2 294,031 3,987 257,031 1,158,829 16,848 1,020,339
Total 2,317,327 32,765 1,615,918 9,220,907 140,204 6,311,245

Table 5.25: Economic impact of ocean activities, Pacific, 2006 (continued)
Output, GDP and Income in $000s
Employment in full-time equivalent
Output
Private Sector - Seafood
Commercial fishing 318,909
Aquaculture 427,466
Fish processing 727,739
Private Sector - Offshore oil & gas
Oil & gas exploration/extraction -
Support activities for oil & gas -
Private Sector - Transportation
Marine transportation 1,911,000
Support activities 2,484,000
Private Sector - Tourism & recreation
Tourism & recreation 2,743,930
Private Sector - Manufacturing & construction
Shipbuilding and boat building 446,000
Oil & gas facilities construction
Ports and harbours construction 132,567
Sub-total private sector 1 8,872,702
Public sector - National Defence
National Defence 550,225
Public sector - Stewardship
Fisheries & Oceans 302,648
Other federal departments 23,850
Provincial departments 155,780
Universities 41,200
ENGOs 36,600
Sub-total public sector 2 1,007,323
Total 9,880,025

1. Sub-total of output value excludes commercial fishing because the value of fisheries output is included in fish processing.
2. Sub-total of output excludes provincial transportation subsidies (provincial ferries) because these are included in marine transportation revenues.
3. Employment impact is adjusted for the increase in the industrial wage index (2.1% from July 2005 to July 2006. Source: Statistics Canada, Table 281-0039).
4. Indirect and induced impacts of fish processing are adjusted to eliminate double counting of commercial fishing activity.

4. Arctic region impacts

Seafood sector

Central and Arctic Region of DFO manages fisheries in the Arctic. This group works cooperatively with the government of NWT, Nunavut and Nunavik. The primary fisheries of the region are northern shrimp, turbot and char. Several other species have been researched, and may offer commercial fishing opportunity in the future including clam, starry flounder, scallops and sea cucumbers.

The Nunavut Wildlife Management Board (NWMB) allocates Arctic resources in Nunavut. The NWMB takes its direction from the Nunavut Land Claims Agreement and carries out its duties as an independent body. This board receives applications from community and corporate interests and makes annual allocations after committee and public consultations. Most of these resources are allocated to Hunter Trapper Organizations (HTO) representing communities, and the Baffin Fisheries Coalition and Qikitarjuaq Corporation.

The Arctic region comprises 64% of Canada's marine waters, but provides a small portion of the commercial harvest. This region includes all marine waters north of the NAFO 0B/2G boundary in the east and to the Beaufort Sea in the west. Commercial marine harvesting is carried out only in Hudson Strait east, in the eastern portion of the region. The marine fishery focuses on two species: northern shrimp and turbot (Greenland halibut). The shrimp fishery targets northern shrimp, with striped shrimp taken as a by-catch. Northern shrimp stock in the region are not fully utilized due to harsh conditions in the remote area, small shrimp size and lower catch rates than in other areas.

Fishing companies based in eastern Canada, including members from the Canadian Association of Prawn Producers (CAPP) and the Northern Alliance, conduct the fisheries for northern shrimp in the eastern Arctic. These companies fish under their own licences, as well as under coownership and royalty lease arrangements with Nunavut and Nunavik interests. In total, 12-13 factory trawlers participate in the Arctic shrimp fisheries. Catches from Artic waters are landed in Newfoundland and Labrador or Nova Scotia.

Turbot resources are harvested mainly with the factory trawlers used for shrimp. The offshore quota was 12,409 MT in 2007 and was harvested at 92%. This stock appears stable, though scientific information regarding recruits is uncertain. There is a small winter ice fishery for turbot in Cumberland Sound. The inshore fishery has an experimental quota of 500 MT. There is a recommendation to convert this to a commercial fishery. The harvest levels vary significantly each year depending upon ice conditions.

There are five processing plants in the Arctic, one in the NWT and four in Nunavut. The Nunavut plants currently employ 56 people, down from 94 in 2003. These plants process char and turbot, much of which is sold within the territory. Output in 2006 was valued at about $5.0 million.

These Arctic fisheries, though conducted primarily by southern companies, nonetheless make an important contribution to the regional economy in two ways: through royalty payments to Arctic interests holding shrimp licences, and also through employment of Innu and Inuit on the vessels (one of the terms of the agreements with licence-holders). Three northern companies, Qikiqtaaluk Corporation (Nunavut), Makivik Corporation (Nunavik) and Unaaq Fisheries (jointly owned by Qikiqtaaluk and Makivik), are provided equal shares of the northern shrimp quota. They negotiate a royalty (typically 8-10% of the landed value) with the companies who fish the licence. Though royalty amounts are not a matter of public record, these three arrangements are estimated to have generated $2-3 million in the past few years (this is down from earlier years due to declining shrimp prices). The incomes earned by the 50-60 northern crewmembers would add another $2.5 million, bringing total income to $5-6 million.

Offshore Oil & Gas Sector

Despite considerable exploration work since the early 1970s (seismic testing and drilling) and some significant discoveries, there has been no development of offshore oil and gas discoveries in the Beaufort Sea and eastern Arctic. Several factors help to explain this, including the need for land claims settlements, moratorium on development, hostile environment and high development costs, the lack of major discoveries that would justify the cost of developing a transportation system, and low energy prices.

Rising energy prices and dwindling reserves in southern areas have provided an impetus for renewed interest in Arctic resources. In 2007, the federal government awarded an exploration licence in the Beaufort Sea with a work commitment of $585 million. In 2008, the federal government's lease auction for parcels in the Beaufort Sea generated a bid of $1.18 billion. Each bid contains minimum work requirements ($146 million in the case of 2007 bid, and $300 million in the case of the 2008 bid).

When these work commitments will be carried out and what impact the expenditures will have on northern communities is difficult to predict (the companies have five years to complete the work), but northern leaders are optimistic that the work will result in a major boost to local economies in Inuvik and Tuktoyaktuk.

Marine Transportation Sector

Most shipping activity in the Arctic is related to re-supply. Statistics Canada provides no data on shipping costs or revenues, or contribution to regional GDP.

In 2005, there were 21 domestic cargo vessel movements in the North West Territories. There were no international vessel movements. In Nunavut, there were 154 cargo vessel movements in 2005. Of these, 28 took place in Frobisher Bay/Iqualuit. The region has no port facilities. Marine vessels must anchor offshore and unload their cargoes onto barges, which are dragged above the high water mark to the beach for unloading. The shipping season runs from July to October.

In summer 2008, three trial shipments of iron ore were made from the Baffinland project in Milne Inlet, Bafffin Island, to Vlissingen, Netherlands. These shipments could increase in the future.

In the western Arctic, two companies provide shipping on the Mackenzie River. Cooper Barging, provides about nine barge trips per annum serving Fort Simpson, Tulita and Norman Wells. Northern Transportation Company Ltd. (NTCL), serves a 5,000 km route from Hay River to the Mackenzie Delta. Its 12 tugs and 90 barges made 16 trips in 2007, moving about 90,000 tonnes of goods. The NTCL is managed and owned by the Inuvialuit Development Corporation and services northern communities with a tug and barge fleet. Most company activities are marine-based, but some operations are in freshwater and some marketing and regional offices expenditures are outside the region in Anchorage, Alaska, Calgary, Alberta, and Halifax, Nova Scotia.

Any increase in exploration or development of offshore oil and gas fields in the Beaufort Sea will increase shipping traffic, particularly for supply boats in this region.

Tourism and Recreation

Although local expenditure data for the cruise industry is not readily available, there has been a significant growth in northern cruise activity. The expedition cruise market in Labrador and the Arctic has been evolving over the past 15-20 years, and has gained considerable momentum in the past 3-4 years. Several companies, including Quark Expeditions, Cruise North, Adventure Canada, Polar Star Cruises and Quest Nature Tours, offer Arctic cruises.

Quark Expeditions is the largest polar expedition cruise operator in the world. They operate all polar cruises in the Arctic and Antarctic. Current Arctic itineraries include: Murmansk-North Pole; North West Passage (Provideniya-Resolute); Tanquary Fjord (Resolute-Tanquary Fjord); Arctic Adventure (Resolute-Nares Strait-Kangerlussuaq); Greenland Odyssey (Kangerlussuaq- Peary Land).

Cruise North is a five-year old venture owned by Makivik Corporation, which is also involved in First Air, Air Inuit and NEAS, amongst other interests. It operates entirely in Canadian waters, with a foreign-flag vessel imported on a seasonal basis. Most of its operations are based in Kuujjuaq, Quebec, in Ungava Bay. In 2007, it offered 10 departures, starting in mid-June from St. John's, and finishing in Kuujjuaq in early September. Other mid-summer itineraries include Kuujjuaq to Iqaluit, Iqaluit to Kuujjuaq, Churchill to Iqaluit and Iqaluit to Kuujjuaq. In addition to Arctic cruises, surveys (Travel Survey of Residents of Canada and International Travel Survey) indicate modest levels of coastal tourism and recreational fishing (though overlap exists with reported subsistence fishing). No data on expenditures related to cruise travel are available, but coastal tourism and recreational fishing generate expenditures estimated at $2.5 million. Tables 5.26 and 5.27 set out trip and expenditure data.

Table 5.26: Marine tourism and recreational fishing activity, Arctic, 2006
Recreational fishing Coastal tourism
Days (000s) Avg spend/trip Days (000s) Avg spend/trip
4.1 212 4.8 354

Sources: DFO, Survey of Recreational Fishing in Canada; Statistics Canada, Travel Survey of Residents of Canada, 2007

Table 5.27: Marine tourism expenditures, Arctic, 2002-2006 ($ millions)
Year Recreational
fishing
Coastal
tourism 1
Total
2002 793,090 1,137,872 1,930,962
2003 812,769 1,132,838 1,945,607
2004 832,449 1,225,340 2,057,789
2005 852,128 1,216,273 2,068,401
2006 871,807 1,684,298 2,556,105

1Includes Nunavut only up to 2005; no data for NWT before 2006 Sources: DFO, Survey of Recreational Fishing in Canada; Statistics Canada, Travel Survey of Residents of Canada, 2007

Marine Construction and Manufacturing

No significant construction activity is reported. Statistics Canada reports contain no data on enterprises engaged in shipbuilding or boat building.

Marine-related arts and crafts

A significant portion of NWT and Nunavut arts and crafts can be considered marine-based or marine-inspired. These include many carvings, animal skin products, prints and hangings. After costs, this sector is estimated to provide approximately $14 million in direct benefits (GDP) to the Arctic Region. (GSGislason and Associates, 2003).

Public Sector

Federal government

Although several federal departments have responsibilities related to the Arctic and its inhabitants, most marine programs are administered from other regions of Canada. Four federal departments have a significant presence in the Arctic marine economy (Table 5.28):

  • Fisheries and Oceans carries out oceans and Coast Guard responsibilities with up to 50 staff posted in northern communities. The most significant work focuses on management and research related to the Beaufort Sea LOMA including its species, their habitats, and interacting human activities.
  • Indian and Northern Affairs Canada is engaged in marine activities through its responsibilities related to: offshore energy and minerals development, northern contaminants research, climate change and adaptation research, and other ocean-based environmental research. Although it has many staff in the north, only 5-10 appear to have marine involvement.
  • Natural Resources Canada provides geosciences and mapping support for the Arctic region and at most one FTE would be positioned in the north.
  • Environment Canada also has a presence in the north with at most one local FTE responsible for trans-boundary water issues.

Territorial and First Nations government

The NWT and Nunavut governments have marine-related responsibilities in several departments, with most expenditures for staff, office space and supplies:

  • The NWT government supports marine-related: education, culture and employment, environment and natural resources development, tourism and industry investment, and municipal and community affairs.
  • The Nunavut government supports marine related: economic development, environmental protection and research, and cultural activities.
Table 5.28: Federal and territorial estimated ocean expenditures, Arctic, 2006
Sector Expenditures ($000s) Employment (FTE)
Federal
Fisheries and Oceans 45,190 100
Indian and Northern Affairs 2,500 5-10
Natural Resources Canada 1,000 1-3
Environment Canada 1,000 1-3
Sub-total federal 49,690 55-65
Territorial
Transportation 4,900 n.a.
Wildlife and harvest 3,400 n.a.
Tourism 500 n.a.
Other 1,200 n.a.
Sub-total provincial 10,000 -
Total 59,690 n.a.

Source: Departments/Agency, special tabulations

The following provides a summary of ocean activities from the Arctic region as discussed above.

Table 5.29: Total ocean activities revenues and expenditures, Arctic, 2006
Sector Output/Expenditures ($000s)
Private sector
Commercial fisheries 6,000
Fish processing 5,000
Arts and crafts 14,000
Transport n.a.
Tourism and Recreation 2,550
Sub-total private 27,550
Public sector - Federal
Fisheries and Oceans 45,190
Indian and Northern Affairs 2,500
Natural Resources Canada 1,000
Environment Canada 1,000
Sub-total federal 49,690
Public sector - Prov/Terr
Transportation 4,900
Harvest and Wildlife 3,400
Tourism 500
Other 1,200
Sub-total prov/terr 10,000
Total 87,240

Sources: Departments/Agencies, special tabulations; DFO, Northern Shrimp Integrated Fisheries Management Plan, 2003; GSGislason, and Outcrop Ltd., The Marine-Related Economy of NWT and Nunavut, 2003. Northern News Services, Opportunities North, 2008, p C9. Statistics Canada, Travel Survey of Residents of Canada, 2007

1 For private sector activities, gross value of output means revenues generated through sales; for public sector activities, gross value of output corresponds to total expenditures.
2 Department of Finance, Economic Research and Analysis Division, Estimating the Value of Marine, Coastal and Ocean Resources of Newfoundland and Labrador for the 2001-2004 Period, 2006; Gardner Pinfold, Economic Value of the Ocean Sector in Nova Scotia, 2002-2006.
3 GSGislason & Associates, Economic Contribution of the Oceans Sector in British Columbia, 2007.

Date modified: