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The Economy 2002 - Newfoundland and Labrador

Oceans-related industries account for 23% of employment and over 26%  of GDP
	Credit: Hibernia Management and Development Company Ltd. The Hibernia Oil Production Platform

Newfoundland and Labrador has developed from its association with the ocean. Over 90% of the province’s population live adjacent to or within a few kilometres of the ocean. In this context, it is important to understand the economic significance of ocean-related industries and their contribution to the economy. In 2001, the Department of Finance, in collaboration with Fisheries and Oceans Canada and the Department of Fisheries and Aquaculture, estimated the economic value of marine, coastal and ocean resources.    A complete version of this report

The study area was classified into three broad categories: the coastline; inshore and nearshore waters; and the offshore to the edge of the Continental Shelf. The study focused on the oceans sector as an economic resource and included two broadly based industrial groupings: industries that use/extract ocean resources, including offshore oil production, the fishery, and tourism; and industries that use the ocean as a medium of movement, operation or innovation, including marine construction, operations and shipping, and marine-related technology, equipment and service industries. The analysis also included public sector departments and agencies with oceans-related responsibilities.  The economic impacts of oceans-related activity were measured using Gross Domestic Product (GDP), labour income (wages and salaries plus supplementary labour income) and employment. The period 1997-1999 was used as the reference period for the study. Economic impacts were separated into three categories: Direct impacts: labour income and business profits earned as a result of working directly in oceans-related activity; Indirect impacts: generated when other firms supply goods and services to oceans-related activity; Induced impacts: generated when the direct and indirect employees and business owners spend their incomes in other areas of the economy which leads to increased retail sales, housing starts and other expenditures.

The Economy 2002 - Newfoundland and Labrador

Contribution of Oceans Activity: top  |  page 2

Summary of Economic Impacts Oceans-Related Activity, 1997-99 Average Newfoundland and Labrador   Direct Impact  Total Impact Indicator Value % of Total Economy Value % of Total Economy GDP  ($billions)  $1.38 14.1% $2.59 26.5% Labour Income  ($billions) $0.65 11.6% $1.22 21.8% Employment  (person years) 24,800 12.7% 44,400 22.6% Note: Total impact is the sum of direct, indirect and induced impacts.   Gross Domestic Product The direct impact of oceans-related activity on GDP averaged $1.38 billion over the 1997-1999 period, or about 14% of total economic activity. Total GDP impact, including direct, indirect and induced impacts, averaged $2.59 billion over the period, or 26.5% of total economic activity. The most significant private sector industries, in terms of total GDP impact, were offshore oil (production, development and exploration) at 11.9% of GDP and the fishery (harvesting and processing) at 8.2%. Total public sector oceans-related activity contributed 2.2% of GDP. Labour Income Direct labour income from oceans-related activity averaged about $650 million from 1997 to 1999, or 11.6% of total labour income. The total labour income impact averaged about $1.22 billion over the period, or 21.8% of total labour income in the province. The most significant private sector industries included in this study, in terms of total labour income impact, were the fishery at 8.5% and offshore oil activity at 5.2%. Total public sector oceans-related activity contributed 3.6% of labour income. Employment Direct person years of employment from oceans-related activity averaged about 24,800 from 1997 to 1999, or 12.7% of total employment. The total employment impact averaged about 44,400 over the period, or 22.6% of total provincial employment.

Credit: Lynn Bryant Fishing vessels at port in St. John’s Harbour   The most significant private sector industries, in terms of total employment impact, were the fishery at 12.4% and offshore oil activity at 3.1%. The relatively low contribution from the oil and gas industry, relative to its GDP contribution, reflects the capital intensive nature of this industry. Total public sector oceans-related activity contributed 2.4% of employment.   Oceans-Related Activities Private Sector Oil and gas, fishery, aquaculture, shipbuilding, marine tourism and recreation, marine transportation and oceans-related technologies   Public Sector 21 federal departments and agencies. Larger entities include: Fisheries and Oceans Canada; Marine Atlantic; Transport Canada; Atlantic Canada Opportunities Agency; and Department of National Defence   8 provincial departments. Larger entities include: Fisheries and Aquaculture; Industry, Trade and Rural Development; and Works, Services and Transportation   Also included in the public sector are entities such as the Marine Institute/Memorial University; research and development institutes; and the Canada-Newfoundland Offshore Petroleum Board

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This information was current as of March 11, 2002.
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