Marine sectors in Canada methodology

Acknowledgements

The methodology and data sources sections are based in part on a report prepared for Fisheries and Oceans Canada by Gardner Pinfold, "Economic Impact of Marine Related Activities in Canada (2009)".

Methodology

Statistics Canada's Inter-provincial Input-Output Model (IO model) Footnote 1 was used to estimate the economic contribution of marine industries to the Canadian economy as measured by gross domestic product (GDP) and employment. This enables a meaningful comparison across industries and geographies.

First, marine industries were defined according to Gardner Pinfold (2009)Footnote 2. Then, gross value of output and/or expenditures data were collected for each marine industry, to which the corresponding IO multipliers were appliedFootnote 3. An exception to this approach was made for marine tourism and recreation, National Defence and Fisheries and Oceans, where commodity level expenditures were provided to Statistics Canada for a customized run of the IO model to obtain the related economic impact.

GDP impacts represent an industry's contribution to Canada’s GDP. More specifically, the GDP of an industry consists of the value it adds to production of output by applying labour and capital to purchased inputs. GDP is calculated by subtracting from total revenues (or output) of a given industry, the costs of material, energy, and purchased services (e.g. accounting and legal services retained from outside the given industry).

Employment is measured in terms of number of jobs, which includes both full-time and part-time employment.Footnote 4

Economic impacts are driven by direct, indirect and induced demand, expressed in terms of industry and consumer purchases of goods and services. The sum of impacts flowing from each level of demand gives the overall economic impact of marine sectors in Canada:

  • Direct impacts are generated by direct demand for the products and services produced and sold by the marine industries included in this study. These marine industries directly add value to the goods and services purchased to produce their outputs. For example, the fishing industry adds value to the vessel, nets and traps and other supplies it purchases from manufacturers, by harvesting and selling fish; the shipping industry adds value to the ships, fuel and other supplies, by providing marine transportation services.
  • Indirect impacts are concerned with the indirect demand created by the marine industries for goods and services in other industries. For example, commercial fishing enterprises buy fishing gear from manufacturers, who in turn buy necessary raw material from other manufacturers and suppliers; oil and gas companies buy services from maintenance contractors, who in turn purchase tools and materials from other businesses. These industries in turn buy more basic goods and services, and so on.
  • Induced impacts are generated on account of the demand created in the broader economy through consumer spending of incomes earned by those employed in direct and indirect industries and activities. It may take a year or more for these rounds of consumer spending to work their way through an economy.

When two marine industries are linked by a supply chain, such as commercial fishing and fish and seafood processing or marine transportation and support activities for marine transportation, there is a real risk of double counting economic impacts, as one industry generates demand for the outputs of the linked industry. For example, fish and seafood processing generates demand for the outputs of the commercial fishing industry, causing the indirect impacts of the fish and seafood processing industry to double count at least a portion of the direct and indirect impacts corresponding to the commercial fishing industry.

The existence of double counting between marine industries was assesses using the IO Supply and Use Tables Footnote 5. Double counting of economic impacts between commercial fishing and fish and seafood processing in the seafood sector, and between marine transportation and support activities for marine transportation in the transportation sector were removed in proportion to their respective IO linkages.

Data sources

Fishing and seafood

Commercial Fishing:

Atlantic and Pacific Regions: Fisheries and Oceans Canada (DFO), commercial sea fisheries landings, Canada Provincial - Values

Arctic Region: Pacific Region Salmon Integrated Fisheries Management Plans and DFO Central & Arctic region internal catch data.

Aquaculture: Statistics Canada Table 36-10-0488-01, Output, by sector and industry, provincial and territorial, Aquaculture [BS112500]. 2016 extrapolated from 2015 using Statistics Canada Table 32 10 0108 01, Aquaculture economic statistics, value added account, gross output.

Fish processing:Statistics Canada Table 36-10-0488-01, Output, by sector and industry, provincial and territorial, [BS311700], seafood preparation and packaging, 2016 extrapolated from 2015 using Statistics Canada Table 36-10-0402-01 (Gross domestic product (GDP) at basic prices, by industry, provinces and territories) adjusted using Statistics Canada Table 18-10-0030-01 (Industrial product price index), by product, NAPCS 171.

Offshore Oil & Gas

Oil & gas exploration/extraction: Production data for offshore oil were sourced from the Canada Newfoundland and Labrador Offshore Petroleum Board, Monthly Production Reports. The production data were converted to revenues using Brent oil price index, Brent differential, and exchange rate.

Production data on offshore gas was sourced from the Canada Nova Scotia Offshore Petroleum Board. Prices were based on the Natural Gas spot price at Mass City Gate, M&NE tariff, and exchange rate.

Arctic exploration data was sourced from Statistics Canada Table 34-10-0033-01, Capital expenditures on construction by type of asset for 2012, extrapolated forward using Statistics Canada Table 34-10-0035-01 Capital and repair expenditures, non-residential tangible assets, by industry and geography, and adjusted using an onshore to offshore ratio based on INAC’s Northern Oil and Gas Annual Reports.

Transportation

Marine transportation: For 2012 to 2015, Statistics Canada Table 36-10-0488-01, Output, by sector and industry, provincial and territorial, Water transportation [BS483000]. 2016 extrapolated from 2015 using Statistics Canada Table 36-10-0402-01, Gross domestic product (GDP) at basic prices, by industry, provinces and territories; adjusted using Statistics Canada Table 18-10-0005-01 Consumer Price Index, annual average, not seasonally adjusted, Services.

Support activities: For 2012 to 2015, Statistics Canada, Table 36-10-0478-01 Supply and use tables, detail level, provincial and territorial, Water transportation support, maintenance and repair services [MPS488004] products supplied by Support activities for transportation [BS488000] industry at basic prices. 2016 extrapolated from 2015 using Marine transportation growth rate.

Tourism & Recreation

Recreational fishing: Fisheries and Oceans Canada 2010 Survey of Recreational Fishing data on expenditures, adjusted for saltwater expenditures only, and extrapolated forward using average growth rate.

Recreational Boating: 2016 National Marine Manufacturers Association (NMMA) Recreational Boating report data on expenditures, backcasted using new boat sales.

Cruise Ships: 2012 and 2016 Business Research and Economic Advisors (BREA) reports: “The Economic Contribution of the International Cruise Industry in Canada” (interpolated for 2013-15), total annual expenditures.

Coastal Tourism: 2006 coastal tourism spending (calculated by Gardner Pinfold) extrapolated using reallocated expenditures by province/territory from Statistics Canada Table 24-10-0013-01 (2006-2010) and Table 24-10-0027-01 (2011-2016).

Manufacturing & construction

Shipbuilding and boat building: For 2012 to 2015, Statistics Canada Table 36-10-0488-01, Output, by sector and industry, provincial and territorial, Ship and boat building [BS336600]. 2016 extrapolated from 2015 using Statistics Canada Table 36-10-0402-01, Gross domestic product (GDP) at basic prices, by industry, provinces and territories, Ship and boat building [3366]; adjusted using Table 18 10 0030 01, Industrial product price index, by product, monthly, Ships [44111] and Boats and personal watercraft [44211].

Ports and Harbours construction:

Atlantic and Pacific Regions:

  • Transport Canada, Transportation in Canada, Canada Port Authorities (CPA) Financial Profiles, Table M8, Acquisiti on of Capital Assets
  • Department of National Defence (DND) Estimated Expenditures by Electoral District and Province, Capital Investment
  • Capital Expenditures for Marine Atlantic and BC Ferries

Arctic Region:Statistics Canada Table 34-10-0063-01, Capital expenditures, non-residential tangible assets, by type of asset and geography, plus Pangnirtung harbour expenditures (DFO internal data).

Public sector

Department of National Defence (DND): Data on defence services operations and maintenance (O&M) and capital expenditures for coastal provinces and territories were obtained from DND. The data was derived from DND Estimated Expenditures by Electoral District and Province.

Fisheries and Oceans Canada (DFO): Expenditures were obtained by using DFO expenditures data sourced from the internally available Multi Year Financial Planning System.

Other Federal Departments: Total spending on marine-related activities from Departmental Performance Reports and Reports on Plans and Priorities for Canadian Food Inspection Agency (CFIA), Environment and Climate Change Canada (ECCC), Indigenous and Northern Affairs Canada (INAC), Parks Canada (PCA), and Transport Canada (TC).

Provincial/Territorial Government Departments: Provincial and territorial expenditures associated with the ocean economy were obtained from the Main Estimates and Public Accounts for each respective province and territory. An effort was made to exclude data otherwise counted in the National Accounts including ferry transportation, services to water transportation and marine-related construction.

Universities: Estimates of university ocean-related expenditures were based on a two-stage approach. The first stage involved compiling all ocean-related grants from the Natural Sciences and Engineering Research Council of Canada (NSERC) and the federal Council for Innovation. In the case of the Territories, as there are no universities located there, they were allocated a portion of any grant relating to the Arctic Ocean. The second stage involved grossing up estimated annual expenditures for coastal universities (based on marine expenditures estimated from university budgets) using the increase in total university budgets from the Canadian Association of University Business Officers (CAUBO).

Environmental non-Governmental Organizations (ENGOs): 2008 expenditures (calculated by Acton White) grossed up using the growth rate of financial data of representative ENGOs (taken from the CRA Registered Charity Information Return).