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The Halifax Shipyard bid will drive superior benefits to all parts of Canada.
The supply chain and indirect economic benefits from a Nova Scotia location will generate significant benefits to the rest of Canada, including Ontario, Quebec and British Columbia.
If either of the two large projects were sited elsewhere in Canada, it is likely that the economic impacts would be highly concentrated in one or two provinces and significant economic benefits would not flow to Atlantic Canada.
According to an analysis by The Conference Board of Canada, for every $1,000 in real GDP from shipbuilding inside Nova Scotia, another $491 will be spent in other regions across Canada. Ontario will be by far the largest beneficiary because of the depth of the supply chain in that province. British Columbia will accrue a significant amount of economic benefit, in large part due to the assumption that much of the West Coast inservice support activity will happen in that province.
For every direct dollar of output in Ontario’s shipbuilding industry, only 11 cents of economic activity accrues outside that province. Ships built in Nova Scotia, by contrast, generate 31 cents worth of economic output in the rest of Canada. Regardless of where in Canada the primary fabrication is done, it is clear that any large shipbuilding project would significantly benefit the Ontario economy.
While the shipbuilding industry in British Columbia and Quebec has similar leakage into the rest of Canada, most of that impact is also felt in Ontario. If the projects had been awarded to either Quebec or British Columbia, there would have been significant economic benefits both in those provinces and in Ontario, but negligible impact in Atlantic Canada.
On the other hand, the award of one of the two large shipbuilding projects to ISI in Halifax will generate significant economic benefits across Canada and have the greatest national distribution of economic benefits. Since Halifax won the combat portion of the NSPS, everyone wins.
This contract could create and sustain up to 11,500 in peak employment across Nova Scotia. The spin-offs would be tremendous.
It could mean:
Continued operation of companies like the Halifax Shipyard has been fundamental to the port city and region’s economic future. The port accounts for nearly 11,000 local jobs and in 2008 generated $1.5 billion of economic benefit in the local economy.
Halifax has been building and repairing ships since the city was first settled over 250 years ago, but the roots of the current shipbuilding legacy began when the Halifax Graving Dock started operating in 1889. And between 1918 and 1978, no other industry contributed more to the prosperity of Halifax than shipbuilding.
Shipbuilding in Halifax impacting the national economy is not new: the Canadian Patrol Frigate program (1983-1996), which was led by Irving Shipbuilding Inc., generated $4.8 billion in direct and offset economic activity in Canadian firms, and over $10 billion indirect. Over 500 Canadian companies received business from the CPF program.
Over the next 30 years, Canada could continue to see incredible economic benefits from the shipbuilding industry. Were the Canadian government to spend $1 billion per year on Federal fleet construction (as the National Shipbuilding Procurement Strategy intends to do), it could support over 8,500 jobs on average annual basis in Nova Scotia. And Quebec, Ontario, and Western Canada could all see hundreds of millions of dollars in economic activity as well.
In 2009 and 2010, Irving Shipbuilding worked with 630 Nova Scotia suppliers
In 2009 and 2010, Irving Shipbuilding worked with 115 New Brunswick suppliers
Suppliers range from welding supply, to signage and graphics, to safety supplies, steel suppliers, and professional services organizations.
In 2009 and 2010, Irving Shipbuilding worked with 19 suppliers based in Newfoundland and Labrador.
In 2010, Irving Shipbuilding worked with more than 90 Prince Edward Island suppliers