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Economic Impact of Marine Related Activities in Canada

Appendix B: Water Transportation Sector Output Estimates

Statistics Canada reports output and GDP data for Water Transportation (NAICS #4831), but not for Support Activities for Water Transportation (NAICS #4883). NAICS 4831 covers the ships, while NAICS 4883 covers port activities. From an economic impact perspective, NAICS 4883 is the more significant industry because of the scope of activities it encompasses.

To obtain a complete picture of the economic impact of the marine transportation sector, it is necessary to estimate an output value for Support Activities for Water Transportation. This is possible using historical data. The first step involves establishing the respective contributions to GDP of each activity; the second step requires establishing the level of output needed to produce this GDP (the GDP/output ratio).

Under the former Standard Industrial Classification (SIC) system, these components formed a single industry for statistical purposes (Water Transportation #449), though up until 2000, data for each component was reported separately by Statistics Canada. With the transition to NAICS, support activities for all transportation modes were grouped into a single industry (Support Activities for Transportation NAICS #488). Thus, support activities for water transportation were bundled with, and became indistinguishable from, corresponding services for rail, truck and air transportation.

It is possible to estimate the size of the Support Activities industry by examining the period of overlap between SIC and NAICS in the years leading up to 2000. Table B-1 shows that as a single industry under SIC, Water Transportation and Related Services generated $2,995 million in GDP ($2002) at the national level in 2000. The earliest NAICS data goes back to 1997, and shows that Water Transportation (NAICS #483) generated $1,147 million in 2000. The difference between the two represents Support Activities (NAICS #488), with a $1,848 million contribution to GDP. Table B-1 indicates that the ratio of Support Activities to Water Transportation is about 1.5. In other words, for every $1.00 of GDP generated in Water Transportation, another $1.50 is generated in Support Activities.

Table B-1: Contribution to GDP - ratio of NAICS 488 to NAICS 483
Year Water transportation & services (SIC) Water Transportation NAICS 483 Support Activities NAICS 488 Ratio 488/483
1997 2,470 982 1,488 1.52
1998 2,494 985 1,509 1.53
1999 2,608 1,086 1,522 1.40
2000 2,995 1,147 1,848 1.61

Source: CANSIM V328820; Statistics Canada, special tabulation

Support for this relationship may be found in the U.S. marine transportation data. Table B-2 shows a ratio for the two industries (NAICS 483 and 488) averaging just under 1.5 for the period 2000-2004 (the latest year for which data are available). The U.S. Bureau of Census reports data for both industries, allowing the relative magnitudes of the industries to be readily observed.

Table B-2: Contribution to GDP (U.S.) – Water Transportation and Support Activities ($US millions)
Year NAICS 483 NAICS 488 Ratio 488/483
2000 4,901 7,063 1.44
2001 4,934 7,240 1.47
2002 4,625 7,474 1.62
2003 6,036 8,139 1.35
2004 5,457 8,713 1.6

Source: U.S. Bureau of Census

Though it may be reasonable to assume a stable 1.5:1.0 ratio exists with respect to GDP, it does not follow that this same ratio applies to the respective values of industry output. This is because NAICS 4831 and 4883 industry structures differ, resulting in different levels of output needed to produce a unit of GDP. This is evident from the direct multipliers in Appendix G. Given these multipliers, determining the output value for NAICS 4883 is a matter of solving for the value that results in a level of direct GDP that is 1.5 times higher than that for NAICS 4831. Once the value of output is obtained, it is possible to run the Statistics Canada I-O Model to obtain the full array of impact estimates.

The set of derived output values for each of the provinces is shown in Table B-3.

Table B-3: Output values for NAICS 4831 and 4883
Province NAICS 4831 NAICS 4883 GDP ratio 4883/4831
Output GDP Multiplier GDP Output GDP Multiplier GDP
Newfoundland and Labrador 222,000 0.35 77910 212,000 0.55 116,600 1.5
Nova Scotia 243,000 0.41 99630 281,000 0.54 151,740 1.5
New Brunswick 72,000 0.40 28,800 81,000 0.54 43,740 1.5
Prince Edward Island 21,400 0.20 4,280 14,000 0.46 6,440 1.5
Québec 314,000 0.45 141,300 415,000 0.52 215,800 1.5
British Columbia 1,911,000 0.45 859,950 2,484,000 0.52 1,291,680 1.5

Source: Statistics Canada, special tabulation for NAICS 4831 data; Appendix G for multipliers.

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