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Economic Footprint for the Canadian Commercial Helicopter Industry

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Economic Footprint for the Canadian Commercial Helicopter Industry FINAL REPORT Economic Footprint for the Canadian Commercial Helicopter Industry Photo Credit: Talon Gillis PREPARED FOR The Helicopter Association of Canada PREPARED BY InterVISTAS Consulting Inc. 11 May 2016 Executive Summary Commercial helicopters in Canada are the workhorses that play an integral role by supporting activities in many different industry sectors and provide many benefits to the economy. Helicopters are often the only effective type of transportation option available to reach many remote or distant locations. Helicopters play an important social role in society, by leading and supporting lifesaving missions. E.g., Photo Credit: Talon Gillis medical emergencies and search and rescue. The commercial helicopter fleet is a growing and important part of the Canadian national registry of aircraft. Helicopters facilitate business and commerce in a broad spectrum of industries. E.g., mineral, oil and gas, mining, tourism, and filmmaking. Without helicopters, these sectors would be higher cost and some developments particularly in the resource sector, simply would not occur. A diverse and growing industry, Canada’s commercial helicopters contribute directly to employment across the country Canada’s commercial and to the national economy through their operations and activities. Helicopters serve and support a number of sectors of helicopter industry is the Canadian economy. Beyond passenger and cargo significant, growing, transportation, they are essential to medevac and emergency services, and for linking northern and remote communities to diverse and saves those in the south. This study examines the current economic lives impacts generated by the commercial helicopter industry in Canada and in the individual provinces and territories. In Canada, there are currently over 2,800 helicopters registered, of which over 1,800 are commercially registered. This study is based only on the economic impact of the commercially registered helicopter fleet in Canada. There are roughly 36,000 aircraft registered in Canada, thus commercial helicopters make up approximately 5% of Canada’s total registered aircraft fleet. This fleet of commercial helicopters are based throughout Canada from coast to coast. Economic impact is a measure of the spending and employment associated with a sector of the economy, a specific project, or a change in government policy or regulation. In this case, economic impact refers to the economic contribution associated with the ongoing activities of commercial helicopter operators and helicopter-related businesses in Canada. Economic impact can be measured in a number of ways: . Employment; . Wages; . Gross Domestic Product (GDP); and . Economic output. Canadian Helicopter Industry Economic Footprint – FINAL REPORT 11 May 2016 © InterVISTAS Consulting Inc. i The three major components of economic impact are classified as direct, indirect and induced impacts – which capture how the economic impact of Canada’s commercial helicopter industry can spread throughout the entire economy. The commercial helicopter sector in Canada in turn drives productivity and competition in other industries. Figure ES-1 illustrates the various elements that account for the economic impact of the sector. Figure ES-1: Economic Impact Overview of Canada’s Helicopter Industry Drive PRODUCTIVITY and COMPETITION in major industries Ongoing Economic Impact Direct economic impact measures the employment directly associated with Canada’s commercial helicopter industry. This includes employment from the holders of a Commercial Air Operator Certificate (AOC) and helicopter-related businesses in Canada. Indirect impacts include employment in industries that supply or provide services to the helicopter industry. Induced employment is employment created because of expenditures by individuals employed both directly and indirectly by businesses directly related to Canada’s helicopter industry. Total impacts are calculated by adding together the direct, indirect, and induced impacts. Canadian Helicopter Industry Economic Footprint – FINAL REPORT 11 May 2016 © InterVISTAS Consulting Inc. ii Direct Economic Impact Day-to-day activities of Canada’s commercial helicopter operators and helicopter-related businesses across Canada employed nearly 6,200 full-time equivalents (FTEs),1 with employees earning approximately $500 million in wages and salaries. The average wage per FTE is over $80,000. This compares to an average annual wage in Canada of $48,600 across all industries. Direct employment generates nearly $0.8 billion in direct gross domestic product (GDP) and $2.1 billion in direct economic output in the nation annually. The geographic breakdown of these jobs is provided in Figure ES-2. Québec and British Columbia had the most direct jobs in 2015, accounting for 29% and 26% of direct FTEs, respectively. Alberta accounted for 20%, while the remaining provinces and territories accounted for 25% all together. The top three provinces accounted for approximately 75% of the industry’s direct employment in Canada. The Canadian commercial helicopter industry is a source of a wide variety of job categories with different positions spread on-site and in the field across the country. A breakdown of direct jobs in the sector, by employment type, is shown in Figure ES-3. Figure ES-2: Map of Direct Employment in the Helicopter Industry across Canada, 2015 1 One full-time equivalent job corresponds to 1,832 hours of work annually. Canadian Helicopter Industry Economic Footprint – FINAL REPORT 11 May 2016 © InterVISTAS Consulting Inc. iii Figure ES-3: Direct Employment by Job Category, 2015 Canadian Helicopter Industry Economic Footprint – FINAL REPORT 11 May 2016 © InterVISTAS Consulting Inc. iv The top industries in which the commercial fleet work is as follows: Oil & gas including pipeline patrol & exploration, Medevac, Firefighting, Mining, including mining exploration, drill moves Forestry, Hydroelectric, Maintenance MRO, and Charter passenger. Annual Direct Economic Impact per Helicopter Each helicopter contributes significantly to the economy. Every arrival and departure of a helicopter directly generates three FTEs, earning approximately $240,000 in wages per annum. This contributes $430,000 in direct GDP and $1.1 million in direct economic output to the Canadian economy each year. Annual tax contributions of one helicopter amount to $153,000 to both federal and provincial/territorial governments. The annual direct economic impacts per helicopter are provided in Figure ES-4. Figure ES-4: Annual Direct Economic Impacts of 1 Helicopter per Annum Canadian Helicopter Industry Economic Footprint – FINAL REPORT 11 May 2016 © InterVISTAS Consulting Inc. v Total Economic Impact Including indirect and induced multiplier impacts, ongoing economic impacts of the commercial helicopter industry in Canada estimate a total of nearly 8,900 FTEs. Total earnings of all employees amount to over $640 million in wages and salaries. Furthermore, the industry contributes an estimated $1.1 billion and $2.7 billion in total gross domestic product (GDP) and total economic output, respectively. The total economic impacts of the Canadian commercial helicopter industry are summarised in Figure ES-5. Figure ES-5: Total Economic Impact of the Canadian Commercial Helicopter Industry, 2015 Employment Economic Wages GDP Impact (Full-time Output (Millions) (Billions) Equivalents) (Billions) Direct 6,200 $500 $0.8 $2.1 Indirect 1,200 $60 $0.1 $0.3 Induced 1,500 $80 $0.2 $0.3 Total 8,900 $640 $1.1 $2.7 Annual Tax Impacts Commercially operated helicopters in Canada also Annual Tax Impacts contribute to government revenue, including revenues of the Helicopter Industry received by federal, provincial/territorial and local in Canada governments. Total taxes paid on an annual basis are estimated at approximately $285 million per year. Federal Government: The majority of taxes collected accrue to the federal $167 million (59% of total) government at 59%. Provincial/territorial taxes are estimated to be $112 million across Canada (39% of total Provincial Government: taxes collected). Estimated municipal taxes make up the $112 million (39% of total) remaining 2%. Figure ES-6 provides a summary of the taxes collected. Municipal Government: $6 million (2% of total) Total Taxes: $285 million Canadian Helicopter Industry Economic Footprint – FINAL REPORT 11 May 2016 © InterVISTAS Consulting Inc. vi Figure ES-6: Breakdown of Tax Revenues by Government Level Note: Tax impacts are presented in 2015 dollars, using 2014 tax rates. Canadian Helicopter Industry Economic Footprint – FINAL REPORT 11 May 2016 © InterVISTAS Consulting Inc. vii ContentsnoCntents Executive Summary ....................................................................................................... i Ongoing Economic Impact ........................................................................................................ii Annual Tax Impacts .................................................................................................................vi 1 Introduction: Canada’s Workhorse....................................................................... 1 1.1 Why do Businesses Use Helicopters? ............................................................................. 1 1.2 Helicopters Enable Economic Activity throughout Canada ............................................. 1 1.3 Examples of Activities Facilitated by Canada’s Commercial Helicopter Fleet ............... 3 1.4 The Evolving Helicopter
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