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)

Figure S-2 Ocean employment by activity, Canada, 2006 (FTE)

Figure S-3 Ocean labour income by activity, Canada, 2005 ($millions)

• 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

Figure 5.5: Atlantic commercial fisheries, value of landings

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

Figure 5.7: Atlantic aquaculture value of production

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

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

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

Figure 5.11: Pacific commercial fisheries landed value

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

Figure 5.13: Pacific aquaculture value of production

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.