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EXECUTIVE SUMMARY

Newfoundland and Labrador, including its culture, settlement patterns, and economy, has developed from its association with the ocean. Today, over 90 per cent of the province's population live adjacent to or within a few kilometres of the ocean. In this context, and given the increasing utilization of marine, coastal and related resources, there is increased emphasis on defining, protecting and preserving these assets. There is also a need to better understand their importance and contribution to the economy.

The provincial Department of Fisheries and Aquaculture and Fisheries and Oceans Canada are seeking to determine the economic value of oceans, marine and coastal activity (i.e., the oceans sector) in the province. Economic value can be derived from ocean resources and from use of the ocean as a means of movement, operation, business activity, and innovation. Estimating this value is important for policy development and management decisions at both the federal and provincial level, and in understanding the role and importance of industries and other stakeholders vis-à-vis their economic contributions in the oceans sector.

This study, completed by the provincial Department of Finance, attempts to estimate the economic value of the oceans sector to the provincial economy. Using 1997-1999 as the reference period,¹ this study includes both private sector industries (i.e., oil and gas, fishery, aquaculture, shipbuilding, boatbuilding, marine tourism and recreation, marine transportation, and oceans technologies) and federal and provincial public sector oceans-related departments and agencies.

The economic impacts of an activity or project encompass a wide array of indicators such as Gross Domestic Product (GDP), labour income (wages and salaries plus supplementary labour income such as employers' portion of mandatory employment programs and pension contributions) and employment. To calculate economic impacts, the Department of Finance used the Newfoundland and Labrador Econometric Model and multipliers from the provincial Input-Output Model.

For the purposes of this study, economic impacts are separated into three components:

Labour Income Impact. Direct labour income from oceans-related activity averaged about $650 million from 1997 to 1999 or 11.6 per cent of total labour income. The total labour income impact, including direct, indirect and induced effects, averaged about $1.22 billion over this period, or 21.8 per cent 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 per cent, and offshore oil activity at 5.2 per cent.² Total public sector oceans-related activity contributed 3.6 per cent of labour income.

Employment Impact. Direct employment (as measured in person years) from oceans-related activity averaged about 24,800 from 1997 to 1999 or 12.7 per cent of total employment. The total employment impact, including direct, indirect and induced effects, averaged about 44,400 over this period, or 22.6 per cent of total provincial employment. The most significant private sector industries, in terms of total employment impact, were the fishery, at 12.4 per cent, and offshore oil activity, at 3.1 per cent.² The relatively low contribution from the oil and gas industry, relative to its GDP and labour income contributions, reflects the capital intensive nature of this industry. Total public sector oceans-related activity contributed 2.4 per cent of employment.

This information was current as of September 30, 2001.