The Province of Nova Scotia has commited up to $304-million in loans for jobs, training and infrastructure renewal related to the $25B Irving Shipbuilding contract. This presentation outlines the economic potential of future growth at the Halifax Shipyard.

1. Economic Potential of Future Growth
at the Halifax Shipyard
March 2012
Fred Morley
Executive VP and Chief Economist
Greater Halifax Partnership
http://www.greaterhalifax.com

2. NATIONAL SHIPBUILDING PROCUREMENT STRATEGY –
QUICK FACTS
• Ottawa issued a call for bids for the two packages in 2010
• $25 Billion in combat vessel construction
• $8 Billion of non-combat ships
• 5 short-listed shipyards, 3 including Halifax Shipyard submitted bids
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3. ECONOMIC IMPACT ANALYSIS
• The Greater Halifax Partnership proposed the project early 2011
• Why?
– To understand the benefits to Nova Scotia and Canada of a
winning Halifax bid
– Communicate those benefits
• Funding
– Nova Scotia Economic and Rural Development and
Tourism, and GHP
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4. ECONOMIC IMPACT ANALYSIS
• Three scenarios
– winning the combat bid
– winning the non-combat bid
– not winning either bid
• Study timeline …first 19 years of the shipbuilding contract
• Consultants
– Conference Board of Canada
– Jupia Consultants
• Project began in late March; final reports in late May
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5. DIRECT, INDIRECT AND INDUCED ECONOMIC
IMPACTS FOR NOVA SCOTIA, 2012-30
Summary Economic Impact in Nova Scotia by NSPS Project
Dollar values shown in $Millions
Combat Non-Combat No Contract
Annual Average
Scenario Scenario Scenario***
Employment* 8,453 3,744 -1,169
Real GDP (basic prices) $661 $278 -$171
Federal Income Taxes $66 $25 -$17.1
Provincial Income Taxes $51 $19 -$13
Corporate Income Taxes $34 $13 -$9.6
HST $115 $44 -$27.3
Personal Income $447 $183 -$118
*Direct, indirect and induced in Nova Scotia.
**All dollar values except real GDP are shown in current (non-inflation adjusted) dollars. Real GDP is shown in basic prices 2002 dollars).
Source: Conference Board of Canada (May 2011)
*** No contract scenario covers 2018-30 period where shock occurs at Halifax Shipyard after current contracts end.
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6. JOBS – WE WIN CONTRACTS
Change in Employment, Combat and Non-Combat
Scenarios, Nova Scotia
Source: Conference Board of Canada
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Combat Non-Combat
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7. JOBS – WE DON’T WIN A CONTRACT
Change in Employment, No Contract Scenario, Nova Scotia
Source: Conference Board of Canada
0
-200
-400
-600
-800
-1,000
-1,200
-1,400
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
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8. Increase in Total Personal Income in Nova Scotia - Combat
Vessel Scenario
Source: Conference Board of Canada, Statistics Canada
700
600
$ Millions of Current Dollars
500
400
300
200
100
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
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9. 9

10. HOW BIG IS BIG?
Figure 1: Employment by Industry Comparison
Universities 11,030
Combat Vessel Project* 8,453
Arts, entertainment and recreation 6,138
Accomodation services 5,217
Plastics and rubber products manufacturing 4,645
Non-Combat Vessel Project* 3,744
Transportation equipment manufacturing 3,262
Architectural, engineering and related services 3,021
Computer systems design and related services 2,311
Wood product manufacturing 2,031
0 5,000 10,000 15,000
* Average annual employment. Source: Conference Board of Canada.
Other industry employment: Statistics Canada CANSIM table 281-0024.
This table shows only the direct employment in each industry compared to the full employment impact of either of the two
shipbuilding projects. 10

11. WHERE WILL PEOPLE SPEND
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12. POTENTIAL MUNICIPAL TAX BENEFITS
• $13 million in local property taxes each year
• $250 million in local property taxes over the first 19 years
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13. SO WE WON, WHAT’S NEXT?
• Build on the marine industry cluster
WHAT IS A CLUSTER?
“A geographic concentration of
firms, suppliers, support
services, specialized
infrastructure, producers of related Suppliers
products and specialized institutions that
arise in particular fields in particular
locations.” Firms
-Michael Porter Specific
HOW? Industry
• Invest in the cluster
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14. OTHER GOVERNMENTS ARE INVESTING IN CLUSTERING
• Montreal aerospace cluster support through numerous tax incentives and
strategic investments helped to build an industry cluster of 40,000 employees
• Waterloo - $214 million invested by federal/provincial/municipal governments
in Research & Technology Park to provide a supportive base for radical, high-
impact research
• Alberta ; the government of Alberta has spent over $1 billion on oil sands
research and held over nearly $1 billion in bonds for the industry
• Auto industry in Ontario – on average, nearly $500 million of public and
private money is invested annually in research and
development, infrastructure.
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15. Total Change in Tax Revenue; Combat, Non-Combat and
No Contract Scenarios; Nova Scotia, 2012-2030
Source: Conference Board of Canada
$5,063,000,000
$1,903,000,000
-$871,000,000
Combat Non-Combat No Contract
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