SHIPBUILDING IN HALIFAXTHE CATALYTIC IMPACT OF THE NATIONAL SHIPBUILDING PROCUREMENT STRATEGY

Fred MorleyExecutive VP and Chief Economist

Greater Halifax Partnership

IS THIS REALLY THE BIGGEST PROJECT SINCE THE NAVY CAME TO TOWN 100 YEARS AGO?

IS THIS REALLY THE BIGGEST PROJECT SINCE THE NAVY CAME TO TOWN 100 YEARS AGO?

• Yes• If Irving Shipbuilding Inc. becomes a prime contractor under the NSPS and

undertakes the 30 year combat vessel program

THE BROAD ECONOMIC IMPACTS FOR NOVA SCOTIA

*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)

Combat Vessels Package

Non-Combat Vessels Package

Annual Average:

Peak Year:

Annual Average:

Peak Year:

Employment:* 8,453 11,495 3,744 9,931 Real GDP (Basic Prices): $661.0 $897.0 $278.0 $733.0 Federal Income Taxes:** $66.0 $76.0 $25.0 $63.0 Provincial Income Taxes: $51.0 $74.0 $19.0 $47.0 Corporate Income Taxes: $34.0 $50.0 $13.0 $30.0 Indirect Taxes (HST, etc.): $115.0 $169.0 $44.0 $107.0 Personal Income: $447.0 $634.0 $183.0 $420.0 Personal Disposable Income: $293.0 $412.0 $125.0 $273.0

Summary Economic Impact in Nova Scotia by NSPS ProjectDollar values shown in $Millions

WHERE WILL PEOPLE SPEND

• Personal income in Nova Scotia will jump by $447 million a year on average

• Transportation– 750 new cars per year– $17 million in gasoline sales– $7.5 million in auto insurance premiums

• Housing– 420 new homes a year– 8000 over the life of the project

HOW BIG IS BIG?

• Bigger than whole sectors in an average year.

• Bigger than all employment in the province’s 11 universities in a good year.

• Chart is meant as an illustration of the magnitude and not an “apples to apples” comparison

2,031

2,311

3,021

3,262

3,744

4,645

5,217

6,138

8,453

11,030

- 5,000 10,000 15,000

*Average annual employment. Source: Conference Board of Canada (May 2011).Other annual industry employment: Statistics Canada CANSIM Table 281-0024. The Table shows only the direct employment in each industry compared to the full employment impact of either of the two shipbuilding projects.

Figure 1: Employment by Industry Comparison

Universities

Combat Vessels Project*

Arts, entertainment and recreation

Accommodation services

Plastics and rubber products manufacturing

Non-Combat Vessels Project*

Transportation equipment manufacturing

Architectural, engineering and related services

Computer systems design and related services

Wood product manufacturing

IF HALIFAX WINS EVERYONE WINS

• The supply chain, indirect benefits and industrial and regional benefits of a Halifax based program would generate benefits in every region.

• Halifax is the best option for broad national impact

• Canadian Patrol Frigate Program Example– 25% of direct spending in

Ontario

$19

$82

$89

$107

$195

$- $100 $200 $300

Other Atl. Canada

Prairie Provinces

QUE

BC

ONT

Increase in Real GDP for every $1,000 of Procurement in Nova Scotia

Shipbuilding

Source: Conference Board of Canada (2011).

CAN ONE PROJECT TURN AROUND A WHOLE PROVINCE?

• Yes

• This could shift GDP by 2.4% a year.

• Halifax becomes one of Canada fast growth cities

• Nova Scotia population trends could turn around

• The NSPS should be the start of a much bigger and longer expansion of the shipbuilding sector in Nova Scotia and the region.

• The cornerstone of Nova Scotia’s Ocean’s Cluster.

HOW GOOD ARE OUR CHANCES?

• Company capability– $90 million invested in capital and people in the last 5 years– Irving has built 80% of the current surface combat ships fleet– Top 5 aerospace and defence company– Talented workforce

• Community capability– 35,000 university and community college– Base of operations for the Canadian Navy..Next-door– Community, Provincial and Atlantic Region Support– We do shipbuilding

PEOPLE ARE HELPING

• Labour leaders, education stakeholders and community leaders are excited about the NSPS as a catalytic investment in the region.

• The Halifax Chamber of Commerce, the Greater Halifax Partnership and many other business groups have endorsed the project.

• The Nova Scotia Legislature issued an all-party resolution in support of the ISI bid.

• Labour leaders in Nova Scotia have expressed public support and other community leaders are also endorsing the concept.

• Atlantic Mayors

• HRM Council• The Council of Atlantic Premiers• www.shipsstarthere.ca

PEOPLE ARE EXCITED

TWEET FROM: ROOFTIGHT

Posted on May 25, 2011 at 3:15 PMAuthor: RooftightSource: twitter.com

RT@HfxStanfield: Show your support for Halifax’s bid to be the main provider of shipbuilding to Can. Govn’t. Visit www.shipsstarthere.ca #shipsstarthere

Online Activity in the Past 30 Days, by ShipyardSource: Radian6 reports

Timeline of Irving Shipbuilding and Halifax Shipyard mentionsSource: Radian6 report