Halifax Stanfield International 2011 Airport Economic Impact...generator for Halifax Regional...
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Halifax Stanfield International 2011
Airport Economic Impact Report
Prepared For: Halifax International Airport Authority Prepared By: Chris Lowe Planning & Management Group
September 2012
Halifax Stanfield International Airport 2011 Economic Impact Report
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Table of Contents
Executive Summary ............................................................................... 3
1 Introduction ...................................................................................... 7 1.1 Context ........................................................................................ 7 1.2 Airport Overview ........................................................................ 7 1.3 Highlights of 2011 .................................................................... 11 1.4 Operations ................................................................................. 13 1.5 The Airport Setting .................................................................. 20 1.6 Airport Facilities ........................................................................ 20 1.7 Regional Economy ................................................................... 27
2 Study Approach .............................................................................. 28 2.1 Introduction .............................................................................. 28 2.2 Economic Impact ..................................................................... 28 2.3 Study Area ................................................................................ 30 2.4 Economic Impacts Measured and Methods of
Measurement ............................................................................ 30 2.5 Fiscal Impact ............................................................................. 31
3 Economic Impacts ......................................................................... 32 3.1 Introduction .............................................................................. 32 3.2 Economic Output ...................................................................... 32 3.3 Employment .............................................................................. 33 3.4 Wages and Salaries ................................................................. 34 3.5 Renovation and New Construction Impact .......................... 35 3.6 Tourist/Visitors Impacts .......................................................... 36 3.7 ATB Retail Sales Impacts ........................................................ 37 3.8 Aerospace Cluster Impacts ..................................................... 37
4 Fiscal Impacts ................................................................................. 39 4.1 Introduction .............................................................................. 39 4.2 Personal and Consumption Taxes (Provincial) .................... 39 4.3 Retail Sales Tax (HST) ............................................................ 40 4.4 Commercial Property and Business Occupancy Taxes ....... 40
5 Conclusions ..................................................................................... 41
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List of Exhibits
Exhibit 1.1 REGIONAL SETTING Exhibit 1.2 HALIFAX STANFIELD INTERNATIONAL AIRPORT - SCHEDULED AND CHARTER PASSENGER SERVICE Exhibit 1.3 HALIFAX STANFIELD INTERNATIONAL AIRPORT - WEEKLY ACTIVITY AUGUST 2002 to
2011 Exhibit 1.4 HALIFAX STANFIELD INTERNATIONAL AIRPORT - MAJOR EMPLOYERS 2011 Exhibit 1.5 HALIFAX STANFIELD INTERNATIONAL AIRPORT - AIR TRAFFIC STATISTICS 2007 to
2011 Exhibit 1.6 HALIFAX STANFIELD INTERNATIONAL AIRPORT - CONCESSION SALES 2007 to 2011 Exhibit 1.7 LAND USE PLAN Exhibit 1.8 AIRSIDE SUBDIVISION LOTS Exhibit 1.9 ATLANTIC CANADA POPULATION - 1996 to 2011 Exhibit 1.10 HALIFAX REGIONAL MUNICIPALITY & NOVA SCOTIA KEY INDICATORS - 1996 and 2011 Exhibit 3.1 HALIFAX STANFIELD INTERNATIONAL AIRPORT - GROSS OUTPUT (MILLIONS) IN 2011 Exhibit 3.2 HALIFAX STANFIELD INTERNATIONAL AIRPORT - EMPLOYMENT (FULL-TIME EQUIVALENT) IN 2011 Exhibit 3.3 HALIFAX STANFIELD INTERNATIONAL AIRPORT - WAGES AND SALARIES (MILLIONS) IN 2011 Exhibit 3.4 HALIFAX STANFIELD INTERNATIONAL AIRPORT - ECONOMIC IMPACT OF AIR
TRAVELERS ENTERING NOVA SCOTIA IN 2011 Exhibit 3.5 AEROSPACE CLUSTER - GENERAL ESTIMATE OF 2011 ECONOMIC IMPACTS Exhibit 4.1 HALIFAX STANFIELD INTERNATIONAL AIRPORT - PERSONAL INCOME & CONSUMPTION TAXES (MILLIONS) IN 2011 Exhibit 4.2 HALIFAX STANFIELD INTERNATIONAL AIRPORT - RETAIL SALES (HST) TAXES
(MILLIONS) IN 2011 Exhibit 5.1 COMPARISON IMPACT OF HALIFAX STANFIELD INTERNATIONAL AIRPORT 2000 - 2011
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Executive Summary Halifax Stanfield International Airport (HSIA) is one of 26 airports in
Canada’s National Airports System and ranks as one of the world’s
premier airports. HSIA is operated by Halifax International Airport
Authority (HIAA) pursuant to the terms of a ground lease agreement
between HIAA and the Federal Government.
In 2011, HSIA served a record 3,594,164 passengers or over half of all
air travel passengers in Atlantic Canada. It has a multi-province
catchment area and functions as a major economic and employment
generator for Halifax Regional Municipality (HRM) and Nova Scotia. In
2011, HSIA provided direct and connecting passenger and cargo service
for 18 passenger carriers and 12 cargo carriers to destinations in
Canada, the United States, the Caribbean and Europe.
The global recession that hit the airline industry in mid-2008 was severe
with operating cash flows not returning to pre-recession levels until late
2010. Although Nova Scotia’s economy is 75% based upon service
industries that did not experience the same economic downturn as other
regions, the recovery has been slow. In 2011, Nova Scotia’s gross
domestic product (GDP) increased by 0.3% following growth of 1.6% in
2010. The slowing growth is attributed mostly to the goods producing
sectors that declined by 4%, and less construction as government
stimulus spending was ending and construction on the Deep Panuke
offshore project was nearing completion. The impact on the
transportation and warehousing sector was growth of 0.9%. In
comparison to the rest of Atlantic Canada, GDP growth in 2011 was
2.8% in Newfoundland and Labrador, 1.1% in Prince Edward Island and
0.1% in New Brunswick.
Against this economic setting, 2011 was a year of achievements at HSIA
that included a major international award; record setting passenger
levels; the funding and commencing of construction of a runway
extension program that will diversify and expand passenger and cargo
traffic; and an updated Master Plan to 2030. HSIA has been rated the best airport in its class for seven of the past
nine years. In total, it has earned 28 awards over the same time period.
In November 2011, HSIA was inducted into the Airport Council
International’s (ACI) Director General’s Roll of Excellence. The Roll of
Excellence is exclusively reserved for airports that have ranked among
the top five in the world for five consecutive years based upon the Airport
Service Quality rankings.
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In February 2011, the Federal Government and the Province of Nova
Scotia announced a joint investment of up to $14 million towards an
estimated cost of $28 million to extend its main runway from 8,800 feet to
10,500 feet to accommodate larger wide bodied and heavy weight
aircraft. Construction work started in late 2011 and will be completed in
2013. An estimated average of 15,000 people pass through the Air Terminal
Building (ATB) per day. In October 2011, Groupe Germain Hospitality
announced plans to build a $27 million onsite boutique hotel. It is
scheduled to open in 2013 and will use the ATL Hotel brand. The facility
will include 169 rooms, a restaurant and 10,000 square feet for business
meetings and gatherings. The ATB also added four new food service
concessions in 2011: a second Starbucks, a Clearwater Seafood kiosk
on the departure level, Booster Juice and The Chickenburger, an iconic
1950’s style diner. HIAA completed a Master Plan update in 2011 that outlines the
development program for the airport terminal, airfield, and surrounding
properties in response to growing passenger traffic and commercial
opportunities.
Cargo operations benefitted from the opening of a 40,000 square foot
multi-tenant cargo facility in June 2010 and will further benefit from the
extension of Runway 05/23. The $15 million facility is operated by
Gateway Facilities ULC and contains 7,000 square feet of climate
controlled space that allows for fresh seafood to be directly shipped to
Europe and beyond. It is the largest refrigerated space with direct
airside access north of Miami, Florida. In 2011, 29,263 metric tonnes of
cargo was processed through HSIA representing a 2.9% increase over
2010.
HSIA’s diversified tenant base and head office functions of IMP Group
Aerospace and Air Canada Jazz has allowed overall airport-related
employment to remain stable in recent years. The major contributor to
the airport’s economic base is IMP Group with many of this firm’s
employees involved in multi-year civilian or military service contracts.
This operating environment also exists for Pratt & Whitney Canada and
L-3 Communications Electronic Systems in the adjacent AeroTech
Business Park. These multi-year service contracts resulted in some staff
reductions or re-deployments in 2011, while most other airport
operations either retained or increased employment levels. In 2011, HSIA contributed $1.26 billion to the Nova Scotia economy and
provided 12,040 full-time equivalent (FTE) jobs with wages and salaries
of $480.6 million. These employees contributed
Halifax Stanfield International Airport 2011 Economic Impact Report
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$57.7 million to the Province of Nova Scotia in terms of personal and
consumption taxes and $25.3 million in retail sales taxes. Beyond the economic and fiscal impacts listed in the following exhibit,
renovation and new construction projects, tourists entering Nova Scotia
at HSIA and a cluster of aerospace businesses that includes the
adjacent AeroTech Business Park provide further positive local and
provincial spinoffs. From 2000 to 2011, HIAA and tenants have invested approximately $450
million in new capital (development) projects and the maintenance of
capital. These projects represent over 70% of the total capital
improvements at all airports in Atlantic Canada and created 7,565 FTE
jobs and contributed $284 million in wages and salaries. HIAA’s Capital
Plan to 2016, the new 169 room boutique hotel and other expected
future tenant projects, will require an additional $300 million in
investments. These planned projects will require 4,220 FTE jobs and
generate $190 million in wages and salaries. Tourism is a $1.82 billion industry in Nova Scotia based upon the most
recent provincial government statistics. There were 1.954 million visitors
to Nova Scotia in 2011 with 34% arriving via air at HSIA. Air visitation
increased by 9% from 2010 while total visitation to Nova Scotia was
down slightly. Tourists entering Nova Scotia at HSIA tend to stay longer
and spend more money. They contributed an estimated $675 million to
the Nova Scotia economy (37% of all tourism-related activity) generating
an estimated 11,775 jobs (direct and spinoff), $120 million in total taxes
and $295 million in payroll. IMP Aerospace and tenants at the adjacent AeroTech Business Park are
an aerospace cluster with 1,360 employees in 2011. This cluster has
estimated direct and spinoff expenditures of $397 million. The direct and
spinoff jobs are 2,720 and wages and salaries are over $150 million.
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COMPARISON IMPACT OF HALIFAX STANFIELD INTERNATIONAL AIRPORT 2000 - 2011
Impact
2000
2005
2011
% Change:
2005 to 2011
Total Gross Output Halifax Area Nova Scotia
(Millions)
$614.1 $1,035.1
(Millions)
$683.3 $1,152.8
(Millions)
$746.0 $1,260.0
+9.2% +9.3%
Total Employment Halifax Area Nova Scotia
7,495 11,000
7,870 11,625
8,100 12,040
+2.9% +3.6%
Wages and Salaries Halifax Area Nova Scotia
(Millions)
$196.7 $289.2
(Millions)
$260.3 $384.6
(Millions)
$323.3 $480.6
+24.2% +25.0%
Personal and Consumption Taxes (NS) Halifax Area Nova Scotia
(Millions)
$29.7 $43.7
(Millions)
$35.1 $53.5
(Millions)
$38.8 $57.7
+10.5% +7.9%
Retail Sales Tax Halifax Area Nova Scotia
(Millions)
$10.2 $15.0
(Millions)
$13.7 $20.2
(Millions)
$16.9 $25.3
See Note
Note: Comparisons cannot be made because of changing tax definitions and rates.
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1 Introduction 1.1 Context
The Chris Lowe Group was retained by Halifax International Airport
Authority (HIAA) to determine the 2011 economic impacts of the facility
on Halifax Regional Municipality (HRM) and the Province of Nova Scotia.
The study uses the same approach as previous economic impact studies
at Halifax Stanfield International Airport (HSIA) initially prepared in 1990
and updated from 1992 to 2010. The approach for the 2011 update
focuses on incremental changes from previous studies. A survey of
major airport tenants, operating and financial data from HIAA and other
data sources are the basis for the 2011 study findings.
The report contains five sections. Section 1, Introduction, is an overview
of the airport and the regional economy. Section 2, Study Approach,
outlines how economic and fiscal impacts are measured. Section 3,
Economic Impacts, presents the findings of the facility’s economic
impacts on HRM and Nova Scotia. Section 4, Fiscal Impacts,
categorizes the personal and consumption taxes, and retail sales tax
impacts. Section 5, Conclusions, is a summary of the 2011 update and
comparisons to previous years.
1.2 Airport Overview
HSIA is one of 26 airports in Canada’s National Airports System and
ranks as one of the world’s premier airports. In 2011, HSIA served a
record 3,594,164 passengers or over half of all passengers in Atlantic
Canada. HSIA is located 35 kilometres northwest of HRM’s urbanized
core on Highway 102 which is the direct link to New Brunswick, Prince
Edward Island and points west and south. Land uses around the facility
are rural and commercial development that includes the AeroTech
Business Park along Highway 102.
The airport was opened by Transport Canada in 1960 with Instrument
Flight Rule (IFR) operations and a 16,900 square metre ATB. In 1960,
180,000 passengers were processed or 5.0% of the 2011 level. From
1960 until early 2000, the facility was managed by Transport Canada. In
February 2000, management, operation and development of the facility
were transferred from Transport Canada to HIAA. The airport has two
runways (05/23 at 8,800 feet and 14/32 at 7,700 feet) with 29 operating
gates and 13 loading bridge positions in the ATB. Jets up to and
including the Boeing 747 can be accommodated.
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Exhibit 1.1
REGIONAL SETTING
Halifax Stanfield International Airport
AeroTech Business Park
HWY 102
Downtown Halifax
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For half a century, HSIA has been the largest airport in Atlantic Canada
with a multi-province catchment area. It now provides direct and
connecting passenger and cargo service across Canada, into the U.S.,
the Caribbean, Europe and Asia. This service is provided by 18
passenger carriers and 12 cargo carriers. The international catchment
area is Atlantic Canada while the domestic passenger catchment area
covers Nova Scotia, Southern New Brunswick and Prince Edward Island.
HSIA is unique in Canada’s airport system as it serves four provinces
(Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland
and Labrador) because of the dominance of Halifax as the East Coast’s
major service centre, and the population distribution and geography of
Atlantic Canada.
The facility’s regional dominance was enhanced in October 2006 when
U.S. Customs and Border Protection Services initiated preclearance for
passengers destined to the U.S. on non-stop flights. In 2011, HSIA
remains the only airport in Atlantic Canada to enable transborder
passengers to be processed by U.S. Customs and Border Protection
Services prior to departure. The benefit of preclearance is passengers
now arrive at domestic gates in U.S. destination airports and have faster
connection options for their final destination.
Exhibit 1.2 HALIFAX STANFIELD INTERNATIONAL AIRPORT -
SCHEDULED AND CHARTER PASSENGER SERVICE
15 Domestic
Destinations
13 Transborder
(USA) Destinations
15 International
Destinations
Calgary, AB
Charlottetown, PEI
Deer Lake, NL
Edmonton, AB
Fredericton, NB
Gander, NL
Goose Bay, NL
Hamilton, ONT
Moncton, NB
Montreal, PQ
Ottawa, ONT
Saint John, NB
St. John’s, NL
Sydney, NS
Toronto, ONT
Atlanta, Georgia
Boston, Mass.
Chigago, Illinois
Detroit, Michigan
Ft. Lauderdale, Florida
Newark, New Jersey
New York (JFK)
Orlando, Florida
Philidelphia, Penn.
St. Petersburg, Florida
Tampa, Florida
Washington (Dulles)
Washington (National)
Bermuda – Hamilton
Cuba – Cayo Coco,
Holguin, Santa Clara,
Varadero
Dominican Republic –
Puerto Plata, Punta
Cana, Samana
Germany – Frankfurt
Iceland – Reykjavik
Jamaica – Montego
Bay
Mexico – Cancun
St. Pierre et Miquelon
United Kingdom –
London (Gatwick),
London (Heathrow)
Source: Halifax International Airport Authority (as of December 2011).
HSIA offers 24 hour
operations without curfew or
noise abatement restrictions.
It functions as a major trans-
border and international
gateway airport with flights
connecting Atlantic Canada
to major centres in Canada,
the U.S. and internationally.
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Since the transfer from Transport Canada in 2000, economic cycles and
geopolitical events have reshaped the airline industry and the role of
airports. The Canadian airline industry has witnessed the demise or
merger of several airlines, the launch of new carriers, global economic
downturns and recoveries, higher energy costs, pandemics and geo-
political events like September 11, 2001 that created the need for
heightened airport security.
During this period, HIAA has followed a four-tier business planning
process that includes a 20-year Master Plan, a 10-year Capital and
Financial Plan, a 5-year Strategic Plan and annual business plans.
The Authority’s mission is to connect Nova Scotia to the world through
flight. A Master Plan update to 2030 was completed in 2011 that aligns
the mission with market-driven changes to the airfield, terminal area,
highway commercial development, multi-modal and logistics
development and land acquisition.
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1.3 Highlights of 2011
2011 was a year of achievements that included a major international
award, record setting passenger levels, the funding and commencing of
construction of a runway extension program that will diversify and
expand passenger and cargo traffic, and an updated master plan to
2030.
HSIA has been rated the best airport in its class for seven of the past
nine years. In total, it has earned 28 awards during the same time
period. In November 2011, HSIA was inducted into the Airport Council
International’s (ACI) Director General’s Roll of Excellence. The Roll of
Excellence is exclusively reserved for airports that have ranked among
the top five in the world for five consecutive years based upon the Airport
Service Quality rankings.
In February 2011, the Federal Government and the Province of Nova
Scotia announced a joint investment of up to $14 million towards an
estimated cost of $28 million to extend the main Runway (05/23) from
8,800 feet to 10,500 feet to accommodate larger wide bodied and heavy
weight aircraft with the remaining $14 million being invested by HIAA.
Construction work started in late 2011 and will be complete in 2013.
Cargo growth is a key strategy of HSIA and this runway extension will
allow wide-body cargo freighters to operate at full capacity with the
resulting benefits to all exporters; particularly seafood exporters who
currently truck product to Boston or New York for export to international
markets. In June 2010, Gateway Facilities ULC in partnership with HIAA
opened a $15 million, 40,000 square foot state-of-the-art cargo facility
that includes 7,000 square feet of climate controlled space. It is the
largest airside refrigerated space north of Miami and will allow for the
efficient export of high-value seafood products. Over the next decade,
air cargo is forecast to grow between 85% to 100%. The growth is
reflected in the decision by Icelandair Cargo in November 2011 to restart
scheduled weekly air cargo service from HSIA to Reykjavik and onto the
major European cargo hub at Liege, Belgium.
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2011 was the final year of the Airfield Restoration Program to improve
safety and reliability. The construction schedule was timed to minimize
flight delays based upon historic weather conditions. Major work
completed in 2011 included Taxiways Foxtrot and Delta, and Gate 24’s
Aircraft Parking Apron.
An estimated average of 15,000 people pass through the ATB per day.
In October, Groupe Germain Hospitality announced plans to build a $27
million onsite boutique hotel. It is scheduled to open in 2013 and will use
the ATL Hotel brand. The facility will include 169 rooms, a restaurant
and 10,000 square feet for business meetings and gatherings.
The ATB also added four new food service concessions in 2011. A
second Starbucks location opened in the domestic arrivals area.
Clearwater Seafood opened a kiosk on the departure level where
passengers can place an order for lobster or seafood after clearing
security. Booster Juice also opened an outlet on the departure level. In
November, The Chickenburger, a 1950’s style
diner, opened in the Airport Square. The
Bedford, Nova Scotia based Chickenburger has
been a Halifax Region icon for more than 70
years.
HIAA completed a Master Plan update in 2011
that outlines the development program for the airport terminal, airfield,
and surrounding properties in response to growing passenger traffic and
commercial opportunities. A key element of the plan is the planning and
development of an ‘Airport City’ that will transform HSIA’s highway
showcase location and regional air hub amenities. The vision contains
five development clusters focusing on aviation, logistics, aviation reserve
(airfield access), multi-modal and highway commercial development.
HIAA retained an A+ credit rating from Standard & Poor’s (second
highest among Canadian airport authorities) in 2011. In the fiscal year,
HIAA generated $51.1 million in operating and interest revenues, and
collected $26.8 million in airport improvement fees for total revenues of
$77.9 million ($67 million in 2010). Total expenses for 2011 were $74.4
million ($65.4 million in 2010). Overall in 2011, revenues exceeded
expenses by $3.44 million ($1.6 million in 2010). The surplus revenue
was retained and reinvested in operations and development. HIAA also
invested $21.8 million ($22.7 million in 2010) in its capital improvement
program.
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1.4 Operations
HSIA had 3,594,164 enplaned/deplaned passengers in 2011. This
volume of activity was an increase of 2.5% from 2010, and represents
the airport’s busiest year in its 51-year history.
Thirty passenger and cargo carriers operated from the airport in 2011.
The carriers are:
Air Canada Air Canada Jazz Air Georgian
CanJet Airlines Skylink Express Delta Air Lines
WestJet Airlines Air Saint-Pierre Air Transat
US Airways Cubana CargoJet
Icelandair Sunwing Airlines Thomas Cook (UK)
Condor Flugdienst Porter Airlines Continental Airlines
American Airlines United Airlines Air North
Canadian North Provincial Airlines ABX / TNT
Cougar Helicopters Kelowna Flightcraft (Purolator)
Execaire Morningstar Express (FedEx)
Canadian Helicopters Maritime Air Charters
Air Canada/Jazz/Georgian has the largest market share. These carriers’
share of total weekly departing flights went from 83% in August 2002 to
61% during August 2011.
Exhibit 1.3 lists the August 2011
destinations of flights from HSIA. There
were 561 flights to Canadian destinations,
119 to transborder (U.S.) destinations and
19 to international destinations per week
in August, 2011. In comparison to 2002,
weekly transborder flights increased 53%
and total flights by 26%.
The scheduled and charter
passenger service in 2011
included 15 domestic
destinations, 13 transborder
(U.S.) destinations and 15
international destinations. International destinations
included England, Germany,
Iceland, Bermuda, Mexico
and several Caribbean
islands.
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Exhibit 1.3 HALIFAX STANFIELD INTERNATIONAL AIRPORT -
WEEKLY ACTIVITY AUGUST 2002 to 2011
Air Carrier – Domestic Service
2002 Flights
Per Week
2011 Flights
Per Week
2011 Destinations
Air Canada/ Air Canada Jazz/Georgian
415 400 Deer Lake, Fredericton, Ottawa, Moncton, Sydney, Saint John, St. John’s, Montreal, Gander, Calgary, Charlottetown, Goose Bay, Toronto
Porter Airlines 0 70 Ottawa, Montreal, St. John’s
WestJet 0 91 Hamilton, St. John’s, Toronto, Edmonton, Calgary, Montreal, Ottawa, Vancouver
Subtotal 466 561
Air Carrier – Transborder Service
Air Canada/Air Canada Jazz
42 19 Boston
Continental Airlines 15 28 Newark Delta Air Lines 21 22 Boston, New York (JFK), Atlanta American Airlines 0 14 New York (JFK) US Airways 0 22 Philadelphia, Washington National (DCA) United Airlines 0 14 Washington, DC (IAD), Chicago
Subtotal 78 119
Air Carrier – International Service
Air Canada 8 8 London (Heathrow), Bermuda Air Saint-Pierre 4 3 St. Pierre Icelandair 0 3 Reykjavik Thomas Cook (UK) 0 1 London (Gatwick) Condor 0 3 Frankfurt Cubana 0 1 Santa Clara Subtotal 13 19
Total 557 699
Source: Halifax International Airport Authority.
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HSIA will have the necessary
support services to handle
increases in air cargo volumes
after the extension to Runway
05/23 is completed in 2013. Cargo
activity is supported by carriers,
freight forwarders, customs
brokers and cargo specialists.
These facilities handled 29,263
metric tonnes in 2011 compared to 28,450 metric tonnes in 2010 and
26,910 metric tonnes in 2009. The 2011 cargo volume is a 2.9%
increase over 2010. Longer-term baseline forecasts by Transport
Canada without the extension of Runway 05/23 have cargo activity
reaching 43,400 metric tonnes in 2019 and 49,000 metric tonnes by
2024. The 2024 Transport Canada forecast has 4.0% average annual
growth from 2010.
Key building blocks for air cargo growth are the new multi-tenant cargo
facility and HSIA’s participation in the international air cargo
transshipment program that was granted by Transport Canada. This
program allows air cargo to fly into Halifax for shipment to third countries.
For example, cargo can fly into Halifax from the U.S., be stored
temporarily and then move to an Asian destination, or international air
cargo can arrive from overseas destinations and then be shipped by rail
or road from Halifax to the U.S. under NAFTA.
Liège, Belgium-based TNT Airways and Icelandair provide regular
scheduled international cargo service and the Airport Authority will
pursue other wide-body freighter operations as part of the Runway 05/23
extension program. Supporting operators for air cargo are listed below.
Freight Forwarders Integrated Couriers Connexion World Cargo (Canada) Ltd. Federal Express DSV Air & Sea Inc. Purolator Courier
Kintetsu World Express Inc. Cargojet Kuehne & Nagel International Ltd. Cargo Handlers
Leisure Cargo Worldwide Flight Services MOL Logistics Air Canada Cargo PF Collins Customs Broker Ltd. Servisair UPS Supply Chain Solution Worldwide Perishables Canada Worldwide Perishables Canada
Halifax Stanfield International Airport 2011 Economic Impact Report
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Customs Brokers Other Cargo Services Atlantic Customs Brokers Armour Transport Inc. KN Customs Brokers Canadian Gold Seafood Ltd. DB Schenker Cape Nova Express EDI Custom Brokers Halifax Marine Agencies Ltd. Kintetsu World Express Inc. Monts Transfer Ltd. Livingston International Inc. Pole Star Transport Inc. PBB Global Logistics Summit Transportation Group PF Collins Customs Broker Ltd. Network Cargo Systems
Passenger carriers that fly from Halifax operate in markets where most
domestic routes are mature and passenger volumes generally increase
or decline in parallel with changes in the regional economy. In 2009, a
global recession negatively impacted the international air transport sector
as passenger traffic fell 2.1% and cargo volume dropped 9.8% (source:
IATA). The cyclical downturn from the 2008 peak to the 2009 trough was
the deepest experienced by the commercial airline industry since the
1930s. By mid-2009, air travel markets began to turn upward, assisted
by fiscal and monetary stimulus measures taken by governments and
this growth continued during 2011. The two major carriers at HSIA are Air Canada Jazz and Air Canada. Air Canada Jazz had 720 full-time equivalent (FTE) jobs based at HSIA
in 2011. This represents a 3.7% increase from 2010. Air Canada
reduced its workforce by 9% from 367 in 2009 to 334 during 2010.
HSIA’s diversified tenant base and head office functions of IMP Group
Aerospace and Air Canada Jazz have allowed overall employment to
grow in recent years. The largest contributor to the airport’s economic
base is IMP Group which had 1,015 FTE employees in 2011, with many
of these workers involved in multi-year service contracts with the U.S.
Navy and the Department of National Defence. This operating
environment also exists for Pratt & Whitney Canada and L-3
Communications Electronic Systems located in the adjacent AeroTech
Business Park with a combined 500 FTE employees in 2011.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Air security requirements have generated job growth over the past
decade. The largest security employer is Canadian Air Transport
Security Authority (CATSA) with an employee base that has increased
from 30 in 2002 to 238 in 2011. Diversification of core business activities or major new service contracts
allowed many of the key tenants to maintain or modestly increase
employment levels in 2011 from 2010. As an example, four major
employers (Host International, Servisair, FedEx, Hudson Group)
increased their employment by 10%.
Exhibit 1.4 presents a list of the major employers in 2011. Beyond this
list, there are many smaller firms that collectively retained employment
during 2011 at 2010 levels. One sector that relies upon
commercial aviation is ground
transportation. There are
approximately 207 active and
licensed taxis and limousines,
and a further 294 non-
registered taxis/limousines and
46 shuttles through the
MACPass system that operate
regularly at HSIA. These operators made close to 137,000 pickups (curb
tickets collected) in 2011. Based upon the level of activity, the airport
created approximately 160 FTE taxi and limousine driver positions.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Exhibit 1.5 lists passenger and aircraft movement activity at the airport
between 2007 and 2011. Over this period, total enplaned and deplaned
passengers increased by 3.6% from 3,469,062 to 3,594,164. Over the
same period, total aircraft movements declined by 2.7% from 89,251 to
86,874. The decline is due to fewer piston and local aircraft movements
while itinerant movements have increased. In 2011, the average number
of passengers per aircraft movement was a record high of 41.4 or an
increase of 6.4% from 2007.
Exhibit 1.6 outlines the 2011
concession sales at HSIA in
comparison to selective previous
years. Total sales in 2011 were
over $80.5 million or $22.42 per
passenger (second highest annual
total). Car rental concessions
totalled $39,976,260 or $11.12 per passenger.
This total sales value is similar to the average for the previous five years.
Exhibit 1.4
HALIFAX STANFIELD INTERNATIONAL AIRPORT - MAJOR EMPLOYERS 2011
Employer Full-Time
Equivalent (FTE) Employees
IMP 1,015 Air Canada Jazz 720 Air Canada/ Air Canada Cargo 361 CATSA 238 HIAA 162 Host International 121 Avis/Budget 95 Servisair 95 Gate Gourmet 78 FedEx 74 Tim Hortons 73 PAL 71 Hudson Group 57 NavCanada 51 Cougar Helicopters 45 National/Enterprise/Alamo (ANC) 33 Source: Chris Lowe Group and Halifax International Airport Authority (as of June 2012).
Halifax Stanfield International Airport 2011 Economic Impact Report
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Exhibit 1.5
HALIFAX STANFIELD INTERNATIONAL AIRPORT - AIR TRAFFIC STATISTICS 2007 to 2011
Enplaned / Deplaned Passengers: Total Aircraft
Movements: Passenger Average Per
Movement: 2007 3,469,062 89,251 38.9 2008 3,578,931 89,033 40.2 2009 3,417,164 88,477 38.6 2010 3,508,153 87,021 40.3 2011 3,594,164 86,874 41.4
Source: Halifax International Airport Authority.
Exhibit 1.6
HALIFAX STANFIELD INTERNATIONAL AIRPORT - CONCESSION SALES 2007 to 2011
Year Enplaned / Deplaned
Passengers
Total Concession Sales
Sales Per Passenger
2007 3,469,062 $80,351,150 $23.16 2008 3,578,931 $81,071,915 $22.65 2009 3,417,164 $78,739,225 $23.04 2010 3,508,153 $79, 711,056 $22.72 2011 3,594,164 $80,570,892 $22.42
Car Rental Concession Portion
2007 3,469,062 $40,665,786 $11.72
2008 3,578,931 $40,675,586 $11.37
2009 3,417,164 $40,385,453 $11.82
2010 3,508,153 $40,019,450 $11.41
2011 3,594,164 $39,976,260 $11.12
Source: Halifax International Airport Authority.
Halifax Stanfield International Airport 2011 Economic Impact Report
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1.5 The Airport Setting
Adjacent to HSIA is the 970 hectare AeroTech Business Park operated
by HRM. During 2011, there were no lots available for sale. Two major
tenants in the aerospace field are located in AeroTech. They are Pratt
and Whitney Canada and L-3 Electronic Systems Inc. Combined with
tenants at the airport, the aerospace cluster had 1,360 employees in
2011.
Hilton Garden Inn opened a 145
room hotel in AeroTech during
2005 and Holiday Inn Express
opened a 119 room hotel on the
same site in 2008. Another nearby
operation is a Quality Inn (former
Airport Hotel Halifax), which has
156 rooms. Combined, the three
properties have over 100 FTE
employees. In 2013, the close
proximity room total will increase by
169 rooms or 40% to 589 rooms when the new ALT Hotel opens
connected to the ATB.
1.6 Airport Facilities
The 20-year Master Plan provides HIAA with a longer-term framework for
land uses, infrastructure, services and development projects. The Land
Use Plan for HSIA is shown in Exhibit 1.7. It was originally prepared in
1996 and amended (with associated drawings) in 2002. An updated
Master Plan was completed in 2011.
The airport's various land uses are classified as:
Airfield District
Future Airfield District
Operational Services
Air Terminal District
Aviation Services
Airport Industrial
Airport Commercial
Airport Reserve
Future Roads / Runways / Taxiways
The major features of the airport are the airfield, commercial
development and terminal complex.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Airfield
HSIA has simultaneous intersecting runway operations that allow for
increased traffic capacity with fewer delays and lower fuel costs.
Runway 05/23 is 8,800 feet by 200 feet with an asphalt/concrete base
and Runway 14/32 is 7,700 feet by 200 feet with an asphalt base.
Runway 05/23 is currently being extended to accommodate fully loaded
wide body cargo freighters. Taxiways A to H have an average width of
75 feet. There are six aprons with an average area ranging from 67,713
square feet to 597,070 square feet.
NavCanada operates the Air Navigation System across Canada and has
51 FTE employees at the airport. The Instrument Landing System (ILS)
navigational aids are Category II while Raytheon Canada Radar provides
primary and secondary coverage on Runway 05/23.
Commercial Development
Commercial land at the airport is leased and not sold. In 2011, there
were over 20 major commercial and industrial tenants. Airside taxiway
access land is leased to companies involved in aircraft overhaul and
repair, air cargo and courier, helicopter transport and aircraft servicing.
Non-taxiway access land is leased to firms involved in flight food service,
brokering, airport services and car rentals. A service station (Petro
Canada) and fast food outlet (Tim Hortons) are also present.
A commercial development initiative is the Airside Subdivision Project
which contains 17 parcels with airside access. Exhibit 1.8 shows that
these lots are designed for aircraft maintenance facilities, air cargo
transshipment areas, offshore oil and gas supply centres, and aircraft
servicing and maintenance activities.
In 2002, CHC Helicopters International leased one of the lots for a new
$3.5 million passenger terminal and helicopter facility. During 2003,
Inland Technologies opened a $1.5 million glycol recovery operation for
the fluid used to de-ice airplanes. IMP completed a new $15 million
aerospace hangar in 2006.
During 2008, a lease was signed
with Gateway Facilities ULC to build
and manage a $15 million multi-
tenant cargo facility that contains
40,000 square feet. This facility
became operational in 2010.
Halifax Stanfield International Airport 2011 Economic Impact Report
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In 2010, Cougar Helicopters commenced construction on a 22,000
square foot hangar that opened in 2011 to service the offshore oil and
gas sector.
In January 2011, HIAA submitted an updated Master Plan to Transport
Canada as a requirement of the Ground Lease. The updated plan seeks
to maximize the use of current airport land holdings over the 2011-2020
and 2020-2030 planning horizons. It states that the airfield has sufficient
capacity to meet future hourly and annual aircraft movements up to
2030. The ATB is anticipated to require expansion if increased
passenger traffic both before and after 2020 meets projections. A major
element of the updated plan is the Airport City Development Plan. It
contains the following features:
An Aviation Precinct with facilities for passenger air service
support, general aviation fixed base operators, refueling and
aircraft maintenance.
A Logistics Precinct that is intended to become a key
transshipment centre for North America.
An Aviation Reserve that is for commercial activities requiring
airfield access.
A Multi-Purpose Precinct that is accessed by the terminal roadway
system and will contain businesses that meet the commercial
needs of passengers, and meeters and greeters.
A Highway Commercial Precinct for aeronautical and other
businesses with showcase visibility from Highway 102.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Exhibit 1.7
LAND USE PLAN
Halifax Stanfield International Airport 2011 Economic Impact Report
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Exhibit 1.8 AIRSIDE SUBDIVISION LOTS
Halifax Stanfield International Airport 2011 Economic Impact Report
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Terminal Complex
The ATB (opened in 1960) has been expanded and upgraded numerous
times by Transport Canada prior to 2000 and subsequently by HIAA. In
1976, it was enlarged to accommodate three million annual passengers.
This level was surpassed in 2004. The international arrival area was
expanded and upgraded in 1987 and has since received additional work.
Also, a major upgrade was completed for the G7 Summit held in Halifax
during 1995.
With the facility’s transfer from Transport Canada to HIAA in 2000, a $25
million development program started at the ATB’s north end to address
congestion and overcrowding in the domestic and international arrival
areas. Completed in 2002, the project improved capacity and service
level by adding:
an expanded international arrivals area approximately three times
larger than the previous size;
a domestic arrivals area quadruple the former size;
space for U.S. preclearance;
a separate and expanded international greeting area;
new Customs, Immigration and Canadian Food Inspection Agency
facilities; and
additional retail space.
In 2003, Airport Square was opened with new retail and food service
tenants. This $12 million project increased retail space by 70%. Retail
tenants are located on the main and departure levels of the ATB.
By 2008, the $93 million ATB expansion, which began in 2004, was
mostly complete. The project focused on an expansion to the north and
south ends of the terminal to meet Federal Government requirements, as
well as to accommodate the U.S. preclearance facility.
Subsequently, during 2008, major terminal modifications were made as
part of the ATB Groundside Redevelopment Program. This work
included redevelopment of the centre core to efficiently move
passengers from the new parking structure through the ATB by four new
escalators, two elevators and an updated exterior façade.
As of 2011, the ATB has 29 operational gates and 13 aircraft loading
bridge positions that can accommodate jets up to the size of Boeing
747s. There are also two covered walkways. Passenger services and
amenities include a tourism visitor information centre, first aid facility,
flight information display system, baggage carts, lounges, duty free
shops, retail outlets and restaurants.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Main Level Domestic/International Departure
Level Atlantic Sweet Shoppe AerRianta Duty Free Brisket Boardwalk Deli Beaches Burger King Booster Juice Central Amusements Brisket Boardwalk Deli The Chickenburger The Classic Backrub Clearwater Seafoods Clearwater Seafoods Everything Under $20 Hudson News (4 locations) Hudson Aeromart Legends Nova Scotia Lounge Hudson News Starbucks Kids Works Tech on the Go Maritime Ale House Tim Hortons Nova Scotia Store Relay Books US Preclearance Departure Level Roots AerRianta Duty Free Starbucks Hudson News Tim Hortons Spirit of the Maritimes TravelEx Travel & Leisure Travel Store
Halifax Stanfield International Airport 2011 Economic Impact Report
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1.7 Regional Economy
Demand for air passenger and cargo transportation is a function of
economic activity. The overall trend for Atlantic Canada’s economy is a
stable population base with declining unemployment and real economic
growth driven by resource development and the service sector. From
1996 to 2011, the region’s population declined by less than 1.0% from
2,381,002 to 2,357,400. Most of this decline occurred in Newfoundland
and Labrador as Nova Scotia’s population increased from 931,235 to
945,400. The population of New Brunswick and Prince Edward Island
also increased.
Halifax Regional Municipality (HRM) is the largest population and service
centre in Atlantic Canada. HRM has produced strong economic
performance and is the major contributor to Nova Scotia’s economy.
Between 1996 and 2011, the number of people employed in HRM
increased by 65,800 or 38% from 172,100 to 237,900 and
unemployment declined from 8.6% to 6.3%. Provincially, total
employment increased by 67,800 or 18% from 385,000 to 452,800 while
unemployment declined from 12.6% to 8.8%.
Exhibit 1.10 HALIFAX REGIONAL MUNICIPALITY & NOVA SCOTIA
KEY INDICATORS - 1996 and 2011
Halifax Regional Municipality Nova Scotia
1996 2011 1996 2011
Total Population 341,500 408,198 931,200 945,400
Employed Labour Force 172,100 237,900 385,000 452,800
Unemployment Rate 8.6% 6.3% 12.6% 8.8%
Labour Force Participation Rate
67.5%
70.3%
59.8%
63.7%
Sources: Nova Scotia Department of Finance – Economics Indicators (May 2012); Greater Halifax Partnership (July 2012); Statistics Canada CANSIM Tables 051-0046 (July 2012).
Exhibit 1.9
ATLANTIC CANADA POPULATION - 1996 to 2011
Province 1996 2011 Change Newfoundland & Labrador 560,584 510,600 -49,984PEI 136,188 145,900 +9,712 Nova Scotia 931,235 945,400 +14,165 New Brunswick 752,995 755,500 +2,505 TOTAL 2,381,002 2,357,400 - 23,602 Source: Statistics Canada, Population Estimates & Projections, CANSIM Table 051-0001 (September 2011).
A key factor influencing air
traffic demand, and hence
economic impacts, is the
strength of the Nova Scotia
and Atlantic Canada
economies. In 2011, GDP
growth was 0.3% in Nova
Scotia, 2.8% in
Newfoundland and Labrador,
1.1% on PEI and 0.1% in
New Brunswick.
Halifax Stanfield International Airport 2011 Economic Impact Report
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2 Study Approach 2.1 Introduction
This section presents the approach used to calculate the impacts of
HSIA on HRM and Nova Scotia. These methods, and the terminology
used in the 1992 report and updates, are also summarized in this
section.
2.2 Economic Impact
To establish a framework for measuring the economic impacts of HSIA,
the following were defined:
The types of economic activity being considered.
The study area.
The units of measurement of economic impact used.
The methods used to measure or estimate economic impact.
The types of economic activity related to HSIA are classified into three
categories: direct, indirect and induced.
Direct Economic Activity
This activity refers to airport-related activity of those firms or industries
for which aviation or airport activity is a portion of total business activity.
These businesses can be divided into three groups: those with primary
linkage to the airport (generally aviation-related); those with a secondary
linkage (generally not aviation-related); and the aerospace sector.
Primary linkage businesses or organizations include those listed below.
Many of the primary linkage businesses are located at the airport.
Air Carriers: This refers to companies offering scheduled air
service within Nova Scotia (local), scheduled or charter air
service to other points in Atlantic Canada and Canada (regional
or national) or to transborder (U.S.) or international
destinations.
General Aviation: This refers to companies engaged in charter
air operations, corporate aviation operations and aviation-
related organizations or educational institutions.
The economic activity at HSIA is calculated by direct, indirect and induced impacts.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Air Support Services: This refers to companies whose business is
primarily or wholly aviation-related, or who provide direct support to air
carriers or general aviation businesses. Air support services include:
Customs brokers, couriers or freight forwarders (i.e., cargo
operations)
Flight catering services
Fuelling services
Sales, rentals or aircraft leasing businesses
Parts and maintenance services
General services (such as fixed base operators)
Airport Operations and Administration: This category includes HIAA,
NavCanada, CATSA, Canada Border Services Agency, Public Health
Agency of Canada, RCMP (Airport Detachment), U.S. Customs and
Border Protection Services and other government functions that are
involved in the direct operation of the airport or which provide support
services at the airport. Excluded from the impact analysis are volunteers
at the Air Terminal Building.
Secondary linkage businesses include:
Commercial Services: These include aviation-related retail and personal
service businesses operating at the airport.
Ground Transportation: These include car rental, taxi and limousine
service, and bus transportation operations that service the airport. The
main offices for these businesses are both on-site and off-site.
Tourist/Travel/Hotel Industry: This group of secondary
linkage businesses includes travel agencies, tour operators,
hotels/motels, and other food and beverage operators who
provide service to passengers travelling by air for business
or pleasure.
Indirect Economic Activity
Direct economic activity is accompanied by indirect and
induced economic activity. Indirect economic activity refers
to activity generated in a sector that supplies raw materials
and other inputs to businesses associated with direct
economic activity (as listed above). Indirect activity occurs
as a result of direct activity. The terms "direct" and "indirect"
depend on the chosen reference point. Any inter-relationships between
the businesses included under the heading Direct Economic Activity and
those included under Indirect Economic Activity were taken into
consideration in the 1992 impact analysis and the updates.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Induced Economic Activity
Induced economic activity refers to that economic activity generated by
individuals employed in the direct or indirect activity sectors who spend a
portion of their household income on consumer goods.
Measures of indirect and induced activity show the effect that the direct
expenditures have as they “ripple” through the economy. The measure is
referred to as the multiplier effect.
2.3 Study Area
The total economic activity and impacts are defined for a specific
geographic area or regions. For the 2011 update, economic activity and
impacts are analyzed for the following regions:
Local Economy (Halifax Regional Municipality)
Regional Economy (Province of Nova Scotia)
2.4 Economic Impacts Measured and Methods of Measurement
Three measures of the airport’s economic impact on HRM and Nova
Scotia are defined as follows:
Economic Output or Gross Revenue: This measure is determined in
terms of total gross revenue from all airport-related activity, and those
same total gross revenues, less any revenue transferred from one
airport-related activity (primary or secondary) to another airport-related
activity.
Employment: This measure is defined as the total amount of full-time
equivalent (FTE) employment created by airport activity (excluding
volunteers).
Wages and Salaries: This measure is defined as the total amount of
wages and salaries created due to airport activity.
Direct, indirect and induced economic impacts associated with the above
three measures of economic activity were calculated as follows:
Direct Economic Impact: In terms of economic output, employment,
wages and salaries were obtained by means of surveys of airport
tenants. Current and past survey results and other data sources were
used to arrive at the final economic impact values.
Positive economic impacts are defined under economic output or gross revenue, employment, wages and salaries, retail sales, the aerospace cluster, construction activity and tourist expenditures.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Indirect and Induced Economic Impact: In terms of economic output,
employment, wages and salaries were estimated by means of economic
multipliers. The multipliers used in this report are the same as previous
updates.
In addition to the three measures, other economic impacts were
determined. ATB retail and concession sales, the aerospace cluster at
HSIA and the adjacent AeroTech Business Park, construction activity
and tourists accessing Nova Scotia at the airport were also identified.
These impacts are assessed separately and represent major
contributions to the economy of Nova Scotia.
The research methodology used by Nova Scotia Economic and Rural
Development and Tourism was applied to determine the jobs and payroll
impacts (direct and spin off) of tourists entering Nova Scotia through the
airport. This model also isolated government taxes from these tourist
expenditures. For the aerospace cluster, the economic impact
approaches used at other aerospace concentrations in Canada and the
U.S. were applied. This approach provides a general indication of
expected impacts and maintains the confidentiality of the few large
aerospace firms operating around the airport.
2.5 Fiscal Impact
The fiscal impact measures include the following:
Personal Income Taxes: This measure refers to the personal income
taxes paid to the Province of Nova Scotia by individuals employed due to
airport activity. This impact was calculated from sources like Statistics
Canada’s financial management system.
Retail Sales Taxes: This measure refers
to retail sales taxes created by
purchases of retail goods and services
by individuals who earn wages and
salaries due to their employment
stemming from airport activity. In 2011,
the HST rate in Nova Scotia was 15%
(5% federal part and 10% provincial
part).
Fiscal impacts are measured for the same study area and in a similar
fashion as economic impacts in terms of direct, indirect and induced
activity.
Fiscal impacts are defined under personal income taxes, retail sales taxes and municipal taxes. No impact multipliers (spinoffs) are applied to municipal taxes.
Halifax Stanfield International Airport 2011 Economic Impact Report
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3 Economic Impacts 3.1 Introduction
The data gathered from the survey were combined with other sources, as
outlined in Section 2, to develop updated estimates of total economic
impacts in terms of:
Economic Output
Employment
Wages and Salaries
For each type of economic impact indicator listed above, the data have been
used to estimate the economic impacts attributed to HRM and Nova Scotia.
At the time of the survey program in mid-2011, over 100 firms were located
at HSIA. For each indicator of economic impact in the 1992 study, a sample
of organizations by type were surveyed. The resultant figures derived from
the surveys (and used for this update) were scaled up to represent the full
population at the airport.
3.2 Economic Output
The first measure of
economic impact is
total economic output.
This measure is also
referred to as gross
revenue. Economic
impacts related to the
airport, in terms of
economic output for
HRM and Nova
Scotia, are
summarized in Exhibit
3.1. The economic impact is separated into direct, indirect and induced. The
direct effects are the same for both HRM and Nova Scotia because all direct
economic output takes place at the airport which is located in HRM.
Exhibit 3.1 shows that HSIA's total economic output for the economy of HRM
is $746 million. This is composed of $410 million of direct output, $110
million of indirect output and $226 million of induced output.
Exhibit 3.1 further shows that the airport's total economic output for the Nova
Scotia economy is $1.26 billion. This is composed of $410 million of direct
output, $258 million of indirect output and $592 million of induced output.
HSIA is a major economic engine for HRM and Nova Scotia that continues to grow and provide high value employment.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Exhibit 3.1 HALIFAX STANFIELD INTERNATIONAL AIRPORT –
GROSS OUTPUT (MILLIONS) IN 2011
Direct Indirect Induced Total Halifax Regional Municipality
$410.0
$110.0
$226.0
$746.0
Province of Nova Scotia
$410.0
$258.0
$592.0
$1,260.0
3.3 Employment
Employment is another measure of economic impact and is presented as
full-time equivalent (FTE) jobs. The figures shown in Exhibit 3.2 are year-
end averages and not peaks, and they include estimated off-site and on-site
employment related to the airport.
Exhibit 3.2 presents the
estimated total employment
impact of the airport on HRM.
For 2011, 8,100 full-time
equivalent direct and spinoff
jobs were created in HRM due
to airport activity. There were
237,900 FTE employed people
in HRM during 2011 so the
airport accounted for 3.4% of
the total. Direct employment from airport activity is estimated at 5,260 FTE
jobs, indirect employment represents 1,260 FTE jobs and induced
employment accounts for another 1,580 FTE jobs. Total employment was
slightly lower than 2010 levels because of adjustments in the aerospace
sector and some smaller service providers. The result is direct and spinoff
employment declined by 215 FTE jobs.
Exhibit 3.2 also shows that the Nova Scotia employment impact from airport
activity is estimated at 12,040 FTE jobs. The number of FTE employed
people in Nova Scotia in 2011 was 452,800 with the result being airport
activity accounted for 2.7% of the employment in Nova Scotia. The direct
employment created by the airport in Nova Scotia was 5,260 FTE jobs,
indirect employment was 2,890 FTE jobs, and induced employment was
3,890 FTE jobs.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Exhibit 3.2 HALIFAX STANFIELD INTERNATIONAL AIRPORT - EMPLOYMENT (FULL-TIME EQUIVALENT) IN 2011
Direct Indirect Induced Total Halifax Regional Municipality
5,260 1,260
1,580 8,100
Province of Nova Scotia 5,260 2,890
3,890 12,040
3.4 Wages and Salaries
Wages and salaries are another measure of economic impact. The direct
wages and salaries are based on the 1992 study and update results.
Indirect and induced wages and salaries were determined by multiplying the
number of jobs in each category by the average annual Nova Scotia wage in
2011 ($39,913).
Exhibit 3.3 contains the wage and salary impact of the airport on HRM and
Nova Scotia in 2011. The total wages and salaries created by airport activity
in HRM amounts to $323.3 million. The direct wage and salary portion is
$209.9 million, the indirect impact is $50.3 million, and the induced impact is
$63.1 million.
Exhibit 3.3 also presents the total wage and salary impact of HSIA on Nova
Scotia for 2011. This impact is $480.6 million.
Exhibit 3.3
HALIFAX STANFIELD INTERNATIONAL AIRPORT - WAGES AND SALARIES (MILLIONS) IN 2011
Direct Indirect Induced Total Halifax Regional Municipality
$209.9
$50.3
$63.1
$323.3
Province of Nova Scotia
$209.9
$115.4
$155.3
$480.6
Halifax Stanfield International Airport 2011 Economic Impact Report
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3.5 Renovation and New Construction Impact
Capital Improvements Since 2000
After the 2000 transfer of the facility from Transport Canada, HIAA and
tenants have invested approximately $450 million in new capital
(development) projects and the maintenance of capital. These projects
represent over 70% of the total capital improvements at airports in Atlantic
Canada, and confirm HSIA’s dominant position in both the air passenger and
air cargo segments.
Using an average annual Nova Scotia construction wage of $39,030 for this
period, these projects generated 7,565 FTE jobs. The direct job portion of
this total is 4,610 FTE jobs. They also contributed $284 million in wages and
salaries with the direct portion being $180 million.
To prepare for the next phase of capital development, HIAA completed an
updated Master Plan in 2011. HIAA budgeted capital projects for 2011 and
planned future spending to 2016 are listed below.
2011 - $21.8 million
2012 - $81.6 million
2013 - $44.6 million
2014 - $12.9 million
2015 - $39.1 million
2016 - $31.1 million
From 2011 and future years, an additional $300 million is expected to be
spent on capital projects by HIAA and tenants. This level of investment does
not include the ‘Airport City’ element of the Updated Master Plan that could
result in significantly more capital projects. Applying the 2011 average Nova
Scotia construction wage of $46,640, future expenditures of $300 million will
provide 4,220 FTE jobs and $190 million in wages and salaries.
Halifax Stanfield International Airport 2011 Economic Impact Report
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3.6 Tourist/Visitors Impacts
Tourism plays a significant role in Nova Scotia. Nova Scotia Economic and
Rural Development and Tourism has an economic impact model that
calculates the impacts of the sector on the provincial economy. Outputs from
this model for 2008 (most recent data) show that tourism is a $1.82 billion
industry that generates 31,700 direct and spinoff jobs and provides $795
million in household income.
From 2008 to 2011, the number of visitors to Nova Scotia decreased by
6.1% from 2,079,800 to 1,953,600. This indicates that the findings of the
2008 tourism economic impact model are a reasonable indicator of
conditions in 2011 when shifts between modes of transportation and inflation
are considered.
Between 2010 and 2011, tourism visitation to Nova Scotia increased slightly
year-over-year. Growth occurred in the air visitors segment (up 9% to
655,900) and motorcoach visitor segment (up 35% to 65,000) while declines
occurred in the automotive segment (down 5% to 1,184,000) and recreation
vehicle segment (down 14% to 49,000).
Between 2010 and 2011, domestic volume was up 10%, transborder 3% and
overseas 12%. The air segment in 2011 represents 34% of all visitors.
Visitors who enter Nova Scotia at HSIA tend to stay longer and spend more
money than other segments. The result is air visitors to Nova Scotia account
for 37% of the sector impacts. Exhibit 3.4 shows that tourists accessing
Nova Scotia at the airport contributed an estimated $675 million towards
tourism revenues in 2011. They also generated an estimated 11,775 jobs
(direct and indirect), $120 million in total taxes and $295 million in payroll.
Exhibit 3.4
HALIFAX STANFIELD INTERNATIONAL AIRPORT - ECONOMIC IMPACT OF AIR TRAVELERS ENTERING NOVA SCOTIA IN 2011
Indicator
Total – All Tourists
Tourists Entering Nova Scotia At HSIA
Tourism Revenues
$1.82 billion
$675 million
Jobs: Direct and Spinoff
31,700
11, 775
Payroll: Direct and Spinoff
$795 million
$295 million
Total Taxes: Provincial and Federal
$324 million
$120 million
Sources – Chris Lowe Group estimates based upon 2008 to 2011 tourism industry data, and Tourism Economic Impact Model, Nova Scotia Economic and Rural Development and Tourism.
Halifax Stanfield International Airport 2011 Economic Impact Report
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3.7 ATB Retail Sales Impacts
HIAA collects data on gross sales for
retailers in the ATB and other
concessions. As outlined in Exhibit 1.6,
these sales in 2011 exceeded $80.57
million. Sales have increased over the
past decade due to increased visitor
traffic and the ATB Centre Core Retail
Expansion Project (Airport Square),
which added to the retail base.
3.8 Aerospace Cluster Impacts
IMP Aerospace and tenants at the adjacent AeroTech Business Park
comprise an aerospace cluster with 1,360 employees in 2011. The major
aerospace tenant at AeroTech is Pratt & Whitney Canada with 350
employees.
According to the Aerospace Industries Association of Canada (AIAC), in
2011 this sector had $22.4 billion in revenues and created 87,230 direct jobs
nation-wide. Exports make up 73% of revenues with 77% of total sales
generated from the civil aviation sector and the remainder from military
contracts. The sector has a positive impact with high paying jobs and
investments in capital, and research and development. During 2011,
investments in capital totaled $1.4 billion while research and development
expenditures were $2.0 billion.
Applying the approaches used by AIAC, the U.S. Department of Commerce,
the U.S. Aerospace Industries Association and the University of Manitoba’s
Transport Institute, general impacts of the local aerospace cluster were
estimated. These estimates rely upon secondary sources and industry-wide
norms to maintain confidentiality of local firms.
Applying the above sources and information on local aerospace firms, the
local sector had expenditures of $397 million in 2011. The direct and spinoff
jobs are 2,720, and wages and salaries are $153 million. A portion of these
positive impacts is included in the economic and fiscal impacts for the airport.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Exhibit 3.5 AEROSPACE CLUSTER - GENERAL ESTIMATE OF 2011 ECONOMIC IMPACTS
Indicator Direct Total (Direct & Spinoff) Expenditures
$218 million
$397 million
Employment (FTE)
1,360
2,720
Labour Income
$87 million
$153 million
Sources – Chris Lowe Group estimates based upon Canadian Aerospace Industry Performance 2011, Aerospace Industries Association of Canada; U.S. Bureau of Labor Statistics; U.S. Aerospace Industries Association estimates (2007); Economic Impact Study of Southport Aerospace, The University of Manitoba Transport Institute, 2006.
Halifax Stanfield International Airport 2011 Economic Impact Report
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4 Fiscal Impacts 4.1 Introduction
The 1992 survey and updates are the primary sources for estimating the
fiscal impact of the airport on HRM and Nova Scotia during 2011. Statistics
Canada and Nova Scotia Department of Finance data were also used.
These sources were drawn upon to estimate total fiscal impacts in terms of:
Personal and Consumption Taxes (Provincial)
Retail Sales Taxes
4.2 Personal and Consumption Taxes (Provincial)
The percentage of wages and salaries paid to the Province of Nova Scotia
was calculated using estimates of the personal income and consumption
taxes (provincial) created due to airport activity. According to the Nova
Scotia Department of Finance, in the range of 12% of total Nova Scotia
personal income went towards personal income and consumption taxes in
2011. By multiplying this average personal income tax rate by the wages
and salaries specified in Section 3, the personal income tax impacts on the
Province can be determined.
Exhibit 4.1 summarizes the 2011 personal income and consumption tax
impacts of HSIA activity on HRM and the Province of Nova Scotia. The total
personal income and consumption taxes resulting from airport activity in
HRM amounts to $38.8 million. This consists of $25.2 million in direct
personal income and consumption taxes, $6.0 million in indirect taxes and
$7.6 million in induced taxes. The exhibit also shows that the total personal
income and consumption taxes created by airport activity on the Province of
Nova Scotia amounted to over $57 million.
Exhibit 4.1 HALIFAX STANFIELD INTERNATIONAL AIRPORT -
PERSONAL INCOME & CONSUMPTION TAXES (MILLIONS) IN 2011
Direct Indirect Induced Total
Halifax Regional Municipality
$25.2
$6.0
$7.6
$38.8
Province of Nova Scotia
$25.2
$13.9
$18.6
$57.7
Halifax Stanfield International Airport 2011 Economic Impact Report
40
4.3 Retail Sales Tax (HST)
Another fiscal impact measure of HSIA activity is sales taxes generated by
the purchase of retail goods by those who are employed due to airport
activity.
In the range of 35% of personal income is spent on retail trade goods and
services. By multiplying the wages and salaries from Section 3 times this
value, the amount of retail sales generated by airport activity is determined.
By multiplying this figure by the HST rate, the retail sales tax impact of airport
activity can be isolated. The 2011 rate in Nova Scotia was 15% (5% federal
part and 10% provincial part).
Exhibit 4.2 reveals the retail sales tax impact of airport activity on HRM and
Nova Scotia. This exhibit shows that $16.9 million in retail sales taxes were
created due to airport activity in HRM. Province-wide, $25.3 million in retail
sales taxes were generated due to airport activities.
Exhibit 4.2 HALIFAX STANFIELD INTERNATIONAL AIRPORT - RETAIL SALES (HST) TAXES (MILLIONS) IN 2011
Direct Indirect Induced Total Halifax Regional Municipality
$11.0
$2.6
$3.3
$16.9
Province of Nova Scotia
$11.0
$6.1
$8.2
$25.3
4.4 Commercial Property and Business Occupancy Taxes
In 2011, the total value of taxes paid to HRM was $3,838,408 or an increase
of 6.6% from 2010. Of this total, $2,448,984 was paid by tenants and the
remaining $1,389,424 by the Authority.
Halifax Stanfield International Airport 2011 Economic Impact Report
41
5 Conclusions Halifax Stanfield International Airport (HSIA) is one of 26 airports in Canada’s
National Airports System and ranks as one of the world’s premier airports. In
2011, HSIA accommodated a record 3,594,164 passengers or over half of all
passengers in Atlantic Canada. It has a multi-province catchment area and
functions as a major economic and employment generator, and aerospace
cluster, for Halifax Regional Municipality and Nova Scotia. In 2011, HSIA
provided direct and connecting passenger and cargo service by 18
passenger carriers and 12 cargo carriers to destinations in Canada, the
United States, the Caribbean and Europe.
The global recession that hit the airline industry in mid-2008 was severe with
operating cash flows not returning to pre-recession levels until late 2010.
Although Nova Scotia’s economy is 75% based upon service industries that
did not experience the same economic downturn as other regions, the
recovery has been slow. In 2011, Nova Scotia’s gross domestic product
(GDP) increased by 0.3% after growth of 1.6% in 2010. The slowing growth
is attributed mostly to the goods producing sectors that declined by 4%, and
less construction as government stimulus spending was ending and
construction on the Deep Panuke offshore project was nearing completion.
The result on the transportation and warehousing sector was growth of 0.9%.
In comparison to the rest of Atlantic Canada, GDP growth in 2011 was 2.8%
in Newfoundland and Labrador, 1.1% on Prince Edward Island and 0.1% in
New Brunswick.
Against this economic setting, 2011 was a year of achievements at HSIA that
included:
a major international award;
record setting passenger levels;
the funding and commencing of construction of a runway extension
program that will diversify and expand passenger and cargo traffic; and
an updated Master Plan to 2030.
Cargo operations benefitted from the opening of a 40,000 square foot multi-
tenant cargo facility in June 2010 and will further benefit from the extension
of Runway 05/23. The $15 million facility is operated by Gateway Facilities
ULC and contains 7,000 square feet of climate controlled space that allows
for fresh seafood to be directly shipped to Europe and beyond. It is the
largest refrigerated space with direct airside access north of Miami, Florida.
In 2011, 29,263 metric tonnes of cargo was processed through HSIA
representing a 2.9% increase from 2010.
Halifax Stanfield International Airport 2011 Economic Impact Report
42
HSIA’s diversified tenant base and head office functions of IMP Group
Aerospace and Air Canada Jazz has allowed overall airport-related
employment to remain stable in recent years. The major contributor to the
airport’s economic base is IMP Group with many of this firm’s employees
involved in multi-year civilian or military service contracts. This operating
environment also exists for Pratt & Whitney Canada and L-3
Communications Electronic Systems in the adjacent AeroTech Business
Park. These multi-year service contracts resulted in some staff reductions or
re-deployments in 2011 while most other airport operations either retained or
increased employment levels.
In 2011, HSIA contributed $1.26 billion to the Nova Scotia economy and
provided 12,040 full-time equivalent (FTE) jobs with wages and salaries of
$480.6 million. These employees contributed $57.7 million to the Province of
Nova Scotia in terms of personal and consumption taxes and $25.3 million in
retail sales taxes. Beyond the economic and fiscal impacts listed in the following exhibit,
renovation and new construction projects, tourists entering Nova Scotia at
HSIA and a cluster of aerospace businesses that includes the adjacent
AeroTech Business Park provide further positive local and provincial
spinoffs. From 2000 to 2011, over $450 million was spent at the airport on new capital
(development) projects and the maintenance of capital. These projects
represent over 70% of the total capital improvements at all airports in Atlantic
Canada and created 7,565 FTE jobs and contributed $284 million in wages
and salaries. HIAA’s Capital Plan to 2017, the new 169 room boutique hotel
and other expected future tenant projects, will require an additional $300
million to be spent. These planned projects will require 4,220 FTE jobs and
generate $190 million in wages and salaries. Tourism is a $1.82 billion industry in Nova Scotia based upon the most
recent provincial government statistics. There were 1.954 million visitors to
Nova Scotia in 2011 with 34% arriving via air at HSIA. Air visitation
increased by 9% from 2010 while total visitation to Nova Scotia was down
slightly. Tourists entering Nova Scotia at HSIA tend to stay longer and
spend more money as they contributed an estimated $675 million to the
Nova Scotia economy or 37% of all tourism-related activity. Tourists arriving
by air at HSIA generated an estimated 11,775 jobs (direct and spinoff), $120
million in total taxes and $295 million in payroll. IMP Aerospace and tenants at the adjacent AeroTech Business Park are an
aerospace cluster with 1,360 employees in 2011. This cluster has estimated
direct and spinoff expenditures of $397 million. The direct and spinoff jobs
are 2,720 and wages and salaries are over $150 million.
Halifax Stanfield International Airport 2011 Economic Impact Report
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Exhibit 5.1
COMPARISON IMPACT OF HALIFAX STANFIELD INTERNATIONAL AIRPORT 2000 - 2011
Impact
2000
2005
2011
% Change:
2005 to 2011
Total Gross Output Halifax Area Nova Scotia
(Millions)
$614.1 $1,035.1
(Millions)
$683.3 $1,152.8
(Millions)
$746.0 $1,260.0
+9.2% +9.3%
Total Employment Halifax Area Nova Scotia
7,495 11,000
7,870 11,625
8,100 12,040
+2.9% +3.6%
Wages and Salaries Halifax Area Nova Scotia
(Millions)
$196.7 $289.2
(Millions)
$260.3 $384.6
(Millions)
$323.3 $480.6
+24.2% +25.0%
Personal and Consumption Taxes (NS) Halifax Area Nova Scotia
(Millions)
$29.7 $43.7
(Millions)
$35.1 $53.5
(Millions)
$38.8 $57.7
+10.5% +7.9%
Retail Sales Tax Halifax Area Nova Scotia
(Millions)
$10.2 $15.0
(Millions)
$13.7 $20.2
(Millions)
$16.9 $25.3
See Note
Note: Comparisons cannot be made because of changing tax definitions and rates.
Halifax Stanfield International 2011 Airport Economic Impact Report