Rising Tide Lifts All: Economic Benefits from National Shipbuilding

February 1, 2018

CANADA – As part of the National Shipbuilding Strategy to replace the current fleets of the Royal Canadian Navy and the Canadian Coast Guard, the federal government contracted Nova Scotia’s Halifax Shipyard to build six Arctic and Offshore Patrol Ships (AOPS).

The shipbuilding activity and the modernization of the Halifax Shipyard Facility are expected to boost economic activity in Canada by $3.42 billion between 2013 and 2022. An average of 4,230 jobs per year will be supported by the shipbuilding activity during the core AOPS build phase of 2016-20, according to a new report by The Conference Board of Canada.

“Canada has the longest coastline of any nation and global warming is opening new arctic maritime routes, upping the need for patrol ships and other vessels. With billions of dollars injected into Canada’s economy from the renewal of Canada’s fleet of vessels, we expect to see economic activity snowball into other sectors such as manufacturing and construction across Canada,” said The Conference Board of Canada’s Deputy Chief Economist, Pedro Antunes.

Highlights of the report are:

  • Real GDP will be lifted by $3.42 billion from 2013 to 2022, boosting economic activity in manufacturing, construction and many other sectors across Canada;
  • The Halifax Shipyard modernization and construction of the AOPS will lift jobs by an average of 4,230 per year over the core build phase between 2016-2020;
  • Employment is forecast to peak in 2018 with 4,770 jobs;
  • The boost to employment will generate about $2 billion in employment income between 2013 and 2022;
  • The Halifax Shipyard modernization and construction of the AOPS, along with a broad lift to economic activity, will bolster private investment by over $850 million between 2013 and 2022; and
  • All three levels of government benefit as the lift to income and profits contribute to an $836 million boost in tax revenues.

The report, The Economic Impact of Canada’s Arctic and Offshore Patrol Ship Program, assesses the economic impacts across Canada of the Halifax Shipyard’s facilities modernization and of building six AOPS. The shipyard modernization, shipbuilding activity, supplier contracts and the Industrial and Technological Benefits Policy obligations throughout Canada generate an estimate of over $3.17 billion in spending between 2013 and 2022.

Including direct, supply chain and other impacts, these investments will lift Canada’s real GDP by $3.42 billion from 2013-22. The construction and manufacturing sectors should see a boost of $201 million and $1.3 billion respectively over the ten-year period.

Finally, federal, provincial and local governments will also benefit from the additional economic activity. In total, $836 million in taxes will be collected by all three levels of government between 2013-2016.

The report, The Economic Impact of Canada’s Arctic and Offshore Patrol Ship Program, was funded by the Halifax Shipyard and is available for download.

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