2008 Port Metro Vancouver Economic Impact Study

Transcription

1 2008 Port Metro Vancouver Economic Impact Study FINAL REPORT strategic transportation & tourism solutions Prepared for Prepared by InterVISTAS Consulting Inc. 121January

2 ii Executive Summary As of 1 January 2008, the Lower Mainland Port Authorities - Vancouver Port Authority, Fraser River Port Authority and North Fraser Port Authority - had amalgamated. This led to the creation of the Vancouver Fraser Port Authority (VFPA), the new entity responsible for overseeing the operations of the three Lower Mainland ports. In June 2008, VFPA announced their decision to market the Lower Mainland port system as Port Metro Vancouver. Prior to this, the possibility of combining the three Lower Mainland ports had long been discussed. In June 2006, the Federal Minister of Transport, Infrastructure and Communities invited the individual port authorities to examine port amalgamation. A report was commissioned to examine this possibility and the results showed that it would be beneficial to carry out the port amalgamation process. As a result, the federal government issued the Certificate of Amalgamation that integrates the Vancouver Port Authority, the Fraser River Port Authority and the North Fraser Port Authority. The provincial government also demonstrated support for this initiative. This led to the creation, on 1 January 2008, of the VFPA, which remains the company s legal name. Port Metro Vancouver was later announced as the entity s name to the industry and general public. With existing offices in New Westminster and in Vancouver, Port Metro Vancouver s jurisdiction includes the combined properties and assets formerly under the jurisdiction of the individual port authorities. Figure ES-1 illustrates the jurisdiction of Port Metro Vancouver after its amalgamation in Port Metro Vancouver anticipates that synergies generated from amalgamating the separate entities will enhance both the efficiency and effectiveness of a single representative gateway to global trade, while creating greater resources for land acquisition, river management and strategic infrastructure investments. Port Metro Vancouver is one of the most visible contributors to the economy of the Metro Vancouver region. It is also a major economic generator that contributes to each provincial economy in Western Canada and to the nation as a whole. This is partly due to the fact that the Port is served by such large employers, but more importantly, it is because the Port provides the necessary infrastructure to connect Canada s domestic markets to markets around the world, particularly in the Asia Pacific region. As such, Port Metro Vancouver identified that it would be necessary to conduct an economic impact study for the amalgamated ports to establish a baseline of its combined economic impact. Conducting an economic impact study allows Port Metro Vancouver to demonstrate its significant employment and economic impacts provincially and nation-wide, particularly to the communities that surround the Lower Mainland and the provincial and federal governments. In 2008, Port Metro Vancouver commissioned InterVISTAS Consulting Inc. to conduct an economic impact study based on 2007 Port operations for the integrated port system in the Lower Mainland.

3 iii Figure ES-1: Port Metro Vancouver Post-Amalgamation Jurisdiction Map On-going operations at Port Metro Vancouver make considerable contributions to local employment and the provincial economy. This study found that the Port Metro Vancouver s on-going operations support 47,700 direct jobs, representing 40,600 direct person years (PY) 1 of employment in British Columbia (B.C.). In round numbers, the direct economic impact of this employment on the B.C. economy is estimated at: $4.1 billion in gross domestic product (GDP); $9.8 billion in economic output; and $2.2 billion in wages. Including indirect and induced effects, in round numbers, the total British Columbia impacts of ongoing operations at businesses related to Port Metro Vancouver are: 106,100 jobs; representing 90,100 person years of employment, 1 Person years are also referred to as FTEs (full-time equivalents).

4 iv $7.9 billion in GDP; $17.1 billion in economic output; and $4.8 billion in wages. The British Columbia economic impacts of on-going operations at Port Metro Vancouver are summarised in Table ES-1. Table ES-1: 2008 Economic Impact of Port Metro Vancouver (B.C. Impacts Only) Type of Impact Jobs Person Years Wages ($Millions) GDP ($Millions) Economic Output ($Millions) Direct 47,700 40,600 2,200 4,100 9,800 Indirect 40,300 34,500 1,700 2,800 5,500 Induced 18,100 15, ,000 1,800 Total 106,100 90,100 4,800 7,900 17,100 Port Metro Vancouver s economic impacts extend deep into B.C., the Prairies and the rest of Canada Port Metro Vancouver has an economic impact throughout Western Canada, and beyond. Since the Port s major bulk and breakbulk commodities are all produced outside the Lower Mainland, this project has examined the logistics chains that depend on Port Metro Vancouver. Outside of B.C., the largest direct employment impact is in Alberta, followed by Manitoba and then Ontario. This includes supporting 1,800 direct jobs in Alberta and in the order of 1,100 direct jobs in each of Manitoba and Ontario. At a local level, the Port is a significant employment and economic activity generator in communities throughout the Lower Mainland from the North Shore to the US border and from the Georgia Strait to Hope. This is because the Port s jurisdiction includes land in many Metro Vancouver municipalities. The employment and multiplier impacts were also calculated and are considerable. Table ES-2 shows the estimated direct employment impacts on a community-by-community basis in Metro Vancouver, and totals for B.C., Alberta, Saskatchewan, Manitoba, Ontario and Quebec.

5 v Table ES-2: Direct Economic Impacts by Location (All Locations in Canada) Jobs Person Years Wages ($Millions) GDP ($Millions) Output ($Millions) Vancouver 18,300 14, ,290 3,380 Richmond 5,700 5, Surrey 4,000 3, ,010 Delta 3,500 2, ,030 North Vancouver (District) 3,500 3, New Westminster 3,000 3, North Vancouver (City) 2,000 1, Port Coquitlam Coquitlam Burnaby Maple Ridge Port Moody Pitt Meadows Langley (Township) Langley (City) West Vancouver Total Metro Vancouver 43,900 37,200 1,980 3,550 8,670 Other B.C. 3,800 3, ,100 Total B.C. 47,700 40,600 2,210 4,100 9,780 Alberta 1,800 1,

6 vi Jobs Person Years Wages ($Millions) GDP ($Millions) Output ($Millions) Manitoba 1,100 1, Ontario 1,100 1, Saskatchewan Quebec Note: Totals may not add up due to rounding Total 53,100 45,900 2,600 4,800 11,000 Although the figures in this report are not directly comparable to the combined results of the previous studies, it appears that the economic impact of Port Metro Vancouver has increased. Table ES-3 shows the total Canada impacts of all Port Metro Vancouver employment at all locations. Table ES-3: 2008 Economic Impact of Port Metro Vancouver (All Locations in Canada) Type of Impact Jobs Person Years Wages ($Millions) GDP ($Millions) Economic Output ($Millions) Direct 53,100 45,900 2,600 4,800 11,000 Indirect 54,900 47,800 2,400 4,300 8,600 Induced 21,500 18,100 1,100 1,400 2,400 Total 129, ,800 6,100 10,500 22,000 Including indirect and induced effects, in round numbers, the total impacts of on-going operations at businesses related to Port Metro Vancouver across Canada are: 129,500 jobs; representing 111,800 person years of employment, $10.5 billion in GDP; $22 billion in economic output; and $6.1 billion in wages.

7 vii The jobs supported by Port Metro Vancouver are high wage positions The average annual compensation per direct person year across all industries directly related to the Port is just nearly $56,000. This is approximately 45% greater than the average wage in Canada of $38,000 in July Port Metro Vancouver supports direct employment in various sectors Direct jobs associated with handling maritime cargo at Port Metro Vancouver amount to 40,900 (or 77% of all direct jobs in all locations across Canada) with wages totalling nearly $2.2 billion. Jobs sectors included in this category include stevedores, rail, trucking and tug. Cruise activity is the Port s second largest employment generator, directly contributing 6,400 direct jobs or 4,400 direct person years of employment. In 2007, Port Metro Vancouver handled 960,554 cruise passengers, equivalent to 68% of total cruise passengers in British Columbia. Port Metro Vancouver competes with the Port of Seattle to be the largest homeport serving the Alaska market. Table ES-4 shows the direct employment and total payroll related to Port Metro Vancouver s five main industry sectors. Table ES-4: Direct Economic Impacts by Industry Sectors (All Locations in Canada) Rank Industry Sector Jobs Person Years Payroll ($Millions) 1 Maritime Cargo 40,900 36,800 $2,190 2 Cruise 6,400 4,400 $220 3 Non-Marine Related Services 4 Construction, Vehicle, Building & Repair 5 Other Marine Related Services 5,000 3,900 $ $ $8 Note: Totals may not add up due to rounding. Total 53,100 45,900 $2,600 2 Statistics Canada Average Hourly Wages of Employees (Canada) for July 2008 multiplied by 1,832 hours worked by the average full-time equivalent worker in a year.

8 viii Port Metro Vancouver supports direct employment both onsite and offsite As shown in Figure ES-2, the majority of direct employment generated by the operations of Port Metro Vancouver is located within its jurisdiction. Direct employment attributable to onsite firms make up 73% of total direct jobs (or 76% of total direct person years), not including employment in the rail, trucking and cruise sectors. Most of this onsite employment is concentrated in seven municipalities: Vancouver, the City of North Vancouver, the District of North Vancouver, Delta, New Westminster, Richmond and Surrey. However, there are also more than 10,000 jobs supported by the economic activity of Port Metro Vancouver off-site. Figure ES-2: Onsite Employment versus Offsite Employment Jobs Person Years 27% 24% 73% Onsite Offsite 76% On-going operations at Port Metro Vancouver generate more than $1,221 million per annum in government tax revenues. This analysis also estimated the current contribution of Port Metro Vancouver business community to government revenues through various taxes to all levels of government, shown in Figure ES-3. On-going activity related to Port Metro Vancouver contributes approximately $1,221 million annually in tax revenue to all levels of government, including: Federal tax revenue of close to $648 million. Provincial tax revenue of approximately $391 million in British Columbia, over $14 million in Alberta and more than $11 million in Manitoba. 3 Government revenue in Port municipalities of approximately $157 million in property taxes. 4 3 Tax revenue accrued in provinces other than British Columbia, Alberta, and Manitoba was included in the provincial tax revenue calculation for B.C. due to its insignificant impact. 4 Municipal taxes include school taxes collected by local governments on behalf of the provincial government.

9 ix Figure ES-3: Estimated Annual Tax Revenues to Government Provincial Millions Municipal Millions TOTAL = $1,221.3 million Federal Millions

10 x Table of Contents Executive Summary... ii 1. Introduction Port Metro Vancouver: A Major Economic Generator for Canada Port Metro Vancouver as a Logistical System What is Economic Impact? Methodology for Estimating Current Economic Impacts Outline of the Study Traffic Through Port Metro Vancouver Combined Port Traffic Combined Port Trade Value The Methodology for Economic Impact Analysis Introduction Surveying Direct Employment Inferring Employment Formulaic Approach in Estimating Service Provider Direct Employment Study Time Frame Jobs versus Person Years Direct Employment Impacts Introduction Direct Employment and Wages Full-time versus Part-time and Seasonal Employment Onsite versus Offsite Employment Onsite Employment Offsite Employment Economic Impacts by Location Employment by Industry Sector Employment by Job Trade Multiplier Employment Impacts Introduction Methodology: Economic Multipliers Indirect Employment Induced Employment Total Employment Other Economic Impacts Introduction: What are Economic Output and GDP? Other Economic Impacts Maritime Cargo: Economic Impacts by Cargo Sector Introduction Automobiles Bulk Cargoes...32

11 xi 7.4 Breakbulk Cargoes Containerised Cargoes Cruise Economic Impacts Introduction A Market in Recovery Cruise Ship Expenditures Direct, Indirect and Induced Economic Impacts Tax Revenue Impacts of Port Metro Vancouver Introduction Taxes by Level of Government Capital Investment at Port Metro Vancouver Replacement Value of Port Metro Vancouver Capital Replacement Value of Tenant Capital Port Metro Vancouver Planned Capital Expenditures Through Port Metro Vancouver Tenant Planned Capital Expenditures Through Total Port Metro Vancouver Capital Economic Impact of Future Port Metro Vancouver Investments Economic Impact Summary APPENDICES Glossary of Terms Appendix 1: Traffic Through Individual Ports Appendix 2: Estimating Port Metro Vancouver Trade Values for Appendix 3: Maritime Cargo Employment by Commodity Appendix 4: Employment Survey Appendix 5: Sample Survey Appendix 6: Calculation of Person Hours Per Year Appendix 7: Employment Breakdown Appendix 8: Inferred Employment Appendix 9: Estimating Port-Related Rail Employment in Appendix 10: Estimating Port-Related Trucking Employment in Appendix 11: Tax Revenues Attributable to Employers and Port Users Appendix 12: Tax Revenues from Cruise Sector

12 1 1. Introduction As of 1 January 2008, the Lower Mainland Port Authorities - Vancouver Port Authority, Fraser River Port Authority and North Fraser Port Authority - had amalgamated. This led to the creation of the Vancouver Fraser Port Authority (VFPA), the new entity responsible for overseeing the operations of the three Lower Mainland ports. In June 2008, VFPA announced their decision to market the Lower Mainland port system as Port Metro Vancouver. Prior to this, the possibility of combining the three Lower Mainland ports had long been discussed. In June 2006, the Federal Minister of Transport, Infrastructure and Communities invited the individual port authorities to examine port amalgamation. A report was commissioned to examine this possibility and the results showed that it would be beneficial to carry out the port amalgamation process. As a result, the federal government issued the Certificate of Amalgamation that integrates the Vancouver Port Authority, the Fraser River Port Authority and the North Fraser Port Authority. The provincial government also demonstrated support for this initiative. This led to the creation, on 1 January 2008, of the VFPA, which remains the company s legal name. Port Metro Vancouver was later announced as the entity s name, to the industry and general public. With existing offices in New Westminster and in Vancouver, Port Metro Vancouver s jurisdiction includes the combined properties and assets formerly under the jurisdiction of the individual port authorities. Figure 1-1 illustrates the jurisdiction of Port Metro Vancouver after its amalgamation in According to Port Metro Vancouver, the amalgamation is expected to generate greater resources for land acquisition, river management and strategic infrastructure investments. Upon amalgamation, Port Metro Vancouver identified that it would be necessary to conduct an economic impact study for the amalgamated ports to establish a baseline of its combined economic impact. Conducting an economic impact study allows Port Metro Vancouver to demonstrate its significant employment and economic impacts provincially and nation-wide, particularly to the communities that surround the Lower Mainland and the provincial and federal governments. Economic impact studies were previously conducted for the Vancouver Port Authority and the Fraser River Port Authority, but not for the North Fraser Port Authority. The Vancouver Port Authority commissioned InterVISTAS Consulting Inc. to conduct an Economic Impact Study for Port Vancouver in 2001, which was later updated by InterVISTAS Consulting Inc. in Fraser River Port Authority also retained InterVISTAS Consulting Inc. to conduct an Economic Impact Study for Fraser River Port in 2002, which was later updated by InterVISTAS Consulting Inc. in 2003 and in In 2008, Port Metro Vancouver commissioned InterVISTAS Consulting Inc. to conduct an economic impact study based on 2007 Port operations for the integrated port system in the Lower Mainland.

13 2 Figure 1-1: Port Metro Vancouver Post-Amalgamation Jurisdiction Map 1.1 Port Metro Vancouver: A Major Economic Generator for Canada Port Metro Vancouver is one of the most visible contributors to the economy of the Metro Vancouver region. The Port is also a major economic generator that contributes to each provincial economy in Western Canada and to the nation as a whole. Port Metro Vancouver is an economic generator in two ways: The businesses serving Port Metro Vancouver are major employers. These include businesses involved in maritime cargo, cruise ship activity and support businesses supplying fuel, equipment, and food, as well as businesses involved in repair and maintenance of vessels and the construction of Port infrastructure. Port Metro Vancouver provides the essential infrastructure linking Canada's domestic market to markets around the world (and those of other NAFTA countries). As such, it is a facilitator of other major sectors of Canada s economy. The Port is a critical component of trade and commerce between Canada and other trading economies. Due to the Port s geographic

14 3 location, it is especially important to trade with nations in the Asia Pacific region, particularly China. 1.2 Port Metro Vancouver as a Logistical System A key question to address before beginning the economic impact study is where exactly the boundaries of the Port are to be set when measuring economic influence. Below, the selected approach to dealing with the Port s boundaries in this study is outlined: 1. Consider Port Metro Vancouver from the perspective of a logistical chain or logistical system for: moving goods and resources from their sources to export markets through the Port; and moving imports through Port Metro Vancouver to consumers and industrial users in North America. Three alternative approaches in measuring economic influence were evaluated: 2. Define the Port as the land and water areas it manages, and measure the jobs and economic activities on these specific sites. A problem with this approach is that a number of directly related Port jobs are not located on Port lands. Shipping agents, for example, might reside in office buildings in the downtown cores of Vancouver, North Vancouver, Richmond or other municipalities located near Port lands. As these jobs are dedicated to serving the Port, it seems reasonable to include them in the analysis. 3. Broaden the boundaries of the Port to include all relevant jobs in the Metro Vancouver region. However, this approach is still quite narrow. There are a number of jobs directly related to Port operations located outside of the Metro Vancouver region. These include grain transportation managers for major shippers located in the Prairies, train dispatchers at various locations in the West, or truck drivers who reside elsewhere in British Columbia, but who primarily service containers and cargo moving in and out of Port Metro Vancouver. 4. The broadest approach would be to include jobs at primary resource companies or manufacturers whose goods pass through Port Metro Vancouver. For example, a number of the mines in the south-eastern B.C. coal fields ship their entire production to the coal terminal at Roberts Bank. Some would argue that these jobs are totally dependent on the successful operation of Port Metro Vancouver. This viewpoint has a significant degree of support from the emerging business management discipline of supply chain management (SCM). However, applying the all-encompassing SCM approach to this study would result in attributing much of the total Canadian economy to Port Metro Vancouver. While in many ways this attribution may be appropriate, this study did not want to confuse the contribution of the direct activities of the Port with the resource and other sectors of our economy. Port Metro Vancouver lands and waters themselves are nodes in this logistical network. The Port logistical system reaches beyond these nodes into the network of the transportation companies (rail and truck), the major terminal operators (including, for example, grain elevators on Port lands and elsewhere on the rail network), and the indispensable human resource network of transportation agents, customs officers and other inspectors, etc. This study measures the

15 4 economic impact of that portion of Canadian rail and trucking activity which brings goods to the Port. In general, it does not include the economic impact associated with the actual production of goods heading to export markets, although manufacturing on Port land is included as part of the economic impact. 1.3 What is Economic Impact? Economic impact is a measure of the spending and employment associated with a sector of the economy, a specific project (such as the construction of a new facility), or a change in government policy or regulation. Economic impact can be measured in various ways. Two of the most popular ways to assess economic impact are in terms of the dollar value of industrial output produced, or in terms of person years (full-time equivalents (FTEs)) of employment generated. Other measures include value-added (GDP), or the value of capital used and/or created. All of these are used to express the gross level of activity or expenditure from a sector of the economy, a specific project or a change in policy or regulation. Although, they are not net measures that weigh benefits against costs, these measures can be useful in developing an appreciation of projects, investments and economic sectors. 1.4 Methodology for Estimating Current Economic Impacts First, the direct employment base of the Port business community is measured and described. Direct Employment: Direct employment is employment that can be directly attributable to the operations in an industry, firm, etc. In the case of Port Metro Vancouver, all of the jobs involved in moving goods to or through Port Metro Vancouver or located on Port land would be considered direct employment. Port Metro Vancouver direct employment includes all jobs at businesses situated on land administered by Port Metro Vancouver and jobs at all off-site businesses directly related to Port Metro Vancouver trade and shipping. On-site direct employment includes employees of terminal operators, tug operators, ship pilots, and other firms that are situated on or operate on land administered by the Port Authority. Off-site firms that facilitate and monitor Port Metro Vancouver trade and shipping are included in the direct employment impact of Port Metro Vancouver. Examples of these off-site firms would include freight forwarding firms, government agencies, truckers and rail carriers that operate in the surrounding community. Employment figures are generally more understandable by the public than more abstract measures such as economic output or GDP. Employment figures also have the advantage of being a more accurate measure, both because the firms are more likely to provide data on employment, as opposed to information on revenues, wages and other monetary amounts, and because there is less chance of double counting economic activity. Port Metro Vancouver business community s measure of direct employment and wages forms the basis for the rest of this study on Port Metro Vancouver s contribution to the regional economy.

16 5 The study then assesses the indirect and induced (or multiplier ) employment supported province wide by port operations. Indirect Employment: Indirect employment is employment at a supplier industry that is supported by expenditures by port businesses. For Port Metro Vancouver, it would include that portion of employment in supplier industries, which are dependent on sales to the Port business sector. For example, a repair company at one of the three Lower Mainland ports supports indirect employment at scrap yards and shipping companies. Induced Employment: Induced employment is employment generated from expenditures by individuals employed indirectly or directly. For example, if a longshoreman decides to expand or remodel his/her home, this would result in additional (induced) employment hours in the general economy. The home renovation project would support hours of induced employment in the construction industry, the construction materials industry, etc. While the direct employment impact of Port Metro Vancouver is measured by survey, the indirect and induced employment and labour income effects are estimated using economic multipliers for the provincial and national economies. Multiplier impacts depend on certain economic conditions and are not always fully realised. Therefore, indirect and induced employment impacts should be interpreted with caution. Total employment is the sum of direct, indirect and induced employment. Using economic multipliers, the study infers the direct economic activity generated by the Port community in terms of economic output and GDP. Statistics Canada s economic multipliers are also used to translate the number of direct person years of employment into the associated monetary measures of economic activity direct, indirect and induced. The employment survey was confined to measuring direct employment and the results are reported in Chapter 4. Chapter 5 shows how one infers indirect and induced employment with the help of economic multipliers. Although there are limitations with using multipliers, their popularity and usefulness is recognised for some situations. The tax revenues generated annually by employers and employees in the Port community are also estimated. Figures for annual revenues for all tax envelopes and levels of government (federal, provincial and municipal) are provided.

17 6 1.5 Outline of the Study The existing and potential economic impacts of the Port are then examined in the following chapters: Chapter 2 discusses historical traffic trends for Port Metro Vancouver. Chapter 3 explains the methodology for estimating current direct employment related to Port Metro Vancouver operations. Chapter 4 measures and describes the current direct employment base by means of a survey of employers within Port Metro Vancouver business communities. Chapter 5 introduces the concept of multipliers and uses them to infer indirect and induced employment related to operations of Port Metro Vancouver. Chapter 6 estimates the monetary economic impacts of the employment using Statistics Canada economic multipliers for B.C. Chapter 7 provides a breakdown of maritime cargo employment by major commodity sector and determines the economic impacts associated with the sectors. Chapter 8 discusses the economic impacts generated from Port Metro Vancouver s cruise sector. Chapter 9 measures the tax contribution of Port Metro Vancouver business communities. Chapter 10 discusses the current and anticipated future capital investments made by Port Metro Vancouver and by Port tenants. Chapter 11 summarises the total economic impacts generated by Port Metro Vancouver. A set of report appendices containing detailed explanations of the methodologies, assumptions and calculations used in this study are also attached.

18 7 2. Traffic Through Port Metro Vancouver This section provides an overview of the combined performance of Port Vancouver, Fraser River Port and North Fraser Port prior to amalgamation in This will serve as a benchmark for Port Metro Vancouver for measuring post-amalgamation traffic volumes in upcoming years. Appendix 1 provides further detail on historical traffic trends for the individual ports. 2.1 Combined Port Traffic Together, the Lower Mainland ports handled more than million metric tonnes of cargo in Figure 2-1 shows combined cargo volumes for the past five years. Despite the slight downwards fluctuation in total tonnages handled in 2007, Port Metro Vancouver s total cargo volume in 2007 is 9% higher than Figure 2-1: Port Metro Vancouver Cargo Volume ( ) 135, ,708 Tonnes (thousands) 130, , , , , , , , , Source: Vancouver Fraser Port Authority 2007 Annual Report The bulk component is the largest component of cargo traffic for Port Metro Vancouver, making up 58% of total cargo tonnages in Bulk cargo has also been a particularly strong sector in 2007, having increased 16% in 2007 over Figure 2-2 shows the trend in bulk tonnages handled by Port Vancouver, Fraser River Port and North Fraser Port combined from 2003 to 2007.

19 8 Figure 2-2: Volume of Port Metro Vancouver Bulk Cargo ( ) Tonnes (millions) Source: Vancouver Fraser Port Authority 2007 Annual Report Breakbulk goods handled by Port Metro Vancouver have declined in recent years, with more and more of these commodity types being containerised. The volume of breakbulk cargo decreased 17% in 2007 over 2006, as shown in Figure 2-3. The breakbulk component represents 25% of total cargo traffic handled by Port Metro Vancouver in Figure 2-3: Volume of Port Metro Vancouver Breakbulk Cargo ( ) Tonnes (millions) Source: Vancouver Fraser Port Authority 2007 Annual Report

20 9 With the emerging trend of containerisation, container traffic volumes at Port Metro Vancouver have been on the rise in recent years. As shown in Figure 2-4, Port Metro Vancouver container traffic has increased steadily over the past five years, averaging 9% per year since Figure 2-4: Port Metro Vancouver Container TEUs ( ) 3,000 TEUs (thousands) 2,500 2,000 1,500 1,000 1,800 1,982 2,140 2,302 2, Source: Vancouver Fraser Port Authority 2007 Annual Report Port Metro Vancouver handled 25% of all new vehicles imported to Canada in 2007 and received 100% of all Asian imports destined for Canada. With the recent trend of consumer shifts toward hybrids and other fuel-efficient vehicles in response to high fuel prices, the demand for automobile shipments have increased. In 2007, automobile shipments through Port Metro Vancouver terminals have increased by 8% over Figure 2-5: Port Metro Vancouver Automobile Shipments ( ) 470 Automobile Units (thousands) Source: Vancouver Fraser Port Authority 2007 Annual Report

21 Combined Port Trade Value The estimated value of cargo throughput at Port Metro Vancouver in 2007 was approximately $75 billion. This estimate was developed using a bottom up approach in which approximate values per tonne of bulk and breakbulk commodities are applied to Port tonnage by commodity type. This is done by calculating a per tonne value for each individual commodity in the bulk and breakbulk categories and multiplying this by the total tonnes of that commodity handled in An advantage of this bottom up approach is that it reveals trade values in dollars for specific commodities. The estimated per tonne values of commodities traded at Port Metro Vancouver are presented in Appendix 2.

22 11 3. The Methodology for Economic Impact Analysis 3.1 Introduction This chapter describes the methodology and sources that were used to measure direct employment related to on-going operations at Port Metro Vancouver. Results of the employment survey are provided in Chapter Surveying Direct Employment The primary tool for estimating the economic impact of Port Metro Vancouver was an employment survey. This was augmented by data from government and Port sources. Employment attributable to Port operations was measured by surveying over 500 businesses located at Port Metro Vancouver or off-site businesses economically linked to the Port along with ground transportation firms. Specifics of the survey methodology are contained in Appendix 4 and a sample copy of the survey is provided in Appendix 5. Telephone follow-up was conducted to increase the response rate. In total, 68% of the firms contacted returned the questionnaire (see Figure 3-1) representing an estimated 83% of total jobs represented in the survey. Figure 3-1: Response Rate (Employers and Jobs) 32% Surveyed Employers Employment Covered by Survey Respondents 17% 68% 83% Responding Non-responding

23 Inferring Employment Employment was inferred for firms that did not respond to the survey by using a proven and accepted methodology. 5 This includes using other sources of employment information such as past employment surveys or using survey results for firms of similar types. A conservative approach was taken when using other survey or employment information to infer for non-responding firms. Appendix 8 provides additional detail on inferred employment. There may be firms which were not surveyed simply because it was not known that they existed. We do not include any estimate of employment for such non-surveyed firms because there is no basis for an assessment. In any event, we expect most of these to be very small in terms of missed employment. 3.4 Formulaic Approach in Estimating Service Provider Direct Employment As not all of a business s activity and employment may be Port related (e.g., they may also be involved with local transportation movements or air transportation as well), the questionnaire included questions to determine the proportion that is Port related. In some cases, it was very difficult for businesses to determine the proportion of their employment related to Port Metro Vancouver, as it may only represent a small number of their total customers. In such cases, an alternative approach was used. In particular, trucking related employment was calculated using the B.C. Ministry of Transportation Container Trucking Forum Container Simulation Project (prepared by IBI Group, 2007), in conjunction with Port Metro Vancouver Estimated Container Traffic Flow statistics and the Container Trucker and/or Tractor Surplus Study Synopsis (prepared by the Vancouver Port Authority, 2007). In addition, cruise services related employment was estimated based on the Economic Contribution of the International Cruise Industry in Canada (prepared by Business Research & Economic Advisors, 2007). This study was prepared for the NorthWest CruiseShip Association. Detailed methodology and calculations used to estimate Port Metro Vancouver direct employment from the rail, trucking and cruise sectors are presented in Appendix 9, Appendix 10 and Chapter 8 respectively. 5 The methodology employed in this study to infer for non-respondents is similar to that used by the federal government for estimating the national income and product accounts.

24 Study Time Frame The employment survey was conducted between April-July 2008, and results reflect employment as of March Jobs versus Person Years Traditionally, employment is measured in terms of number of jobs. However, when part-time and/or seasonal workers are used, this can be a misleading measure resulting in an overstatement of economic impact. For example, one firm with 100 part-time employees may have a similar overall economic impact to another firm with 50 full-time employees. Whenever possible, employment impacts are measured both in terms of the number of jobs and the number of person years or fulltime equivalents. 7 6 While the survey results reflect employment as of March 2008, surveyed firms were asked about their seasonal employment for the past year. Thus, the survey results include the seasonal workers in the cruise industry who are generally employed between April and October. 7 One person year is equivalent to 1,832 hours of work. Please see Appendix 6 for a detailed calculation of the number of hours per person year. Person years are the same as full-time equivalents (FTEs).

25 14 4. Direct Employment Impacts 4.1 Introduction This chapter describes the direct employment at Port Metro Vancouver. Jobs and person years (or full-time equivalents) figures are presented and wages associated with this direct employment are estimated. The following sections break down the direct employment in the Port Metro Vancouver business community in more detail. Jobs are broken down by: Full-time versus part-time employment; Seasonal versus non-seasonal; and Onsite versus offsite. Direct employment is also broken down by business type and by job trade. 4.2 Direct Employment and Wages Direct employment related to on-going operations at Port Metro Vancouver totalled 53,100 jobs across Canada as of March After adjusting for part-time, seasonal and contract employment, these 53,100 jobs amounted to approximately 45,900 person years of employment. Employees at Port Metro Vancouver firms earned nearly $2.6 billion in wages in 2007, yielding an average of approximately $56,000 per person year of employment. Employment figures are summarised in Table 4-1 for wages as well as jobs and person years. Table 4-1: Direct Employment for Port Metro Vancouver (All locations in Canada) Jobs Person Years Wages Direct Employment for Port Metro Vancouver 53,100 45,900 $2.6 Billion

26 Full-time versus Part-time and Seasonal Employment Of the surveyed direct permanent jobs attributable to Port Metro Vancouver operations in 2008, 96% were full-time jobs. The breakdown of Port Metro Vancouver jobs and person years by parttime and full-time positions is presented in Figure 4-1. Figure 4-1: Part-Time versus Full-Time Employment Jobs Person Years 96% 4% 98% 2% Full- time Part- time Figure 4-2 shows that in March 2008, the seasonal component of Port Metro Vancouver direct employment base accounted for 6% of total surveyed jobs and for 3% of total surveyed person years. Figure 4-2: Permanent versus Seasonal Employment Jobs Person Years 6% 3% 94% 97% Permanent Seasonal

27 Onsite versus Offsite Employment The majority of direct employment generated by Port operations is located within the Port Metro Vancouver s jurisdiction. However, there are also over 10,000 offsite jobs supported by Port Metro Vancouver economic activity Onsite Employment Onsite employment represents 73% of total direct jobs. A total of 27,100 direct jobs (amounting to 24,500 person years of direct employment) related to the Port Metro Vancouver are located within Port Metro Vancouver s jurisdiction. These positions are held by individuals working at businesses that are tenants of the Port and the Port Authority itself. Figure 4-3 shows the breakdown of onsite and offsite employers, as well as the number of direct jobs located onsite versus offsite. Figure 4-3: Onsite versus Offsite Employment Surveyed Employers Direct Jobs 27% 42% 58% Onsite Offsite 73% The largest onsite contributors to employment at the Port are stevedores, which account for approximately 3,800 jobs or approximately 14% of total onsite jobs. The next largest group of onsite businesses are manufacturing and processing firms located on Port Metro Vancouver land that, as of March 2008, employed nearly 3,300 individuals, representing 12% of all onsite jobs. The complete breakdown of jobs onsite at the ports is presented in Figure 4-4.

28 17 Figure 4-4: Port Metro Vancouver Onsite Jobs by Business Type Stevedoring 3,838 (14%) Manufacturing/Processing 3,267 (12%) Tug/Tow/Barge 2,707 (10%) Sawmill 2,576 (10%) Shipping 2,013 (7%) Accommodations Commercial Fishing Insurance/Underwriting 1,864 1,815 1,773 (7%) (7%) (7%) Bulk Terminal Operator 1,110 (4%) Real Estate/Property Management 1,093 (4%) Container Terminal Operator 1,047 (4%) Government Agency 494 (2%) Total Onsite = 27,100 Jobs Association 455 (2%) Casino 350 (1%) Other 2,691 (10%)

29 Offsite Employment Offsite employment represents 27% of total direct Port Metro Vancouver business employment in terms of jobs. While this sector of employment is not located on Port land, it is still considered to be part of the direct employment impact of Port Metro Vancouver related businesses. Offsite employment included in this study exists at firms whose business is dependent in whole or in part on the cargo traffic at Port Metro Vancouver. Examples of such businesses are freight forwarders and customs brokers. Accounting only for the proportion of employment related to Port Metro Vancouver, there are nearly 10,200 jobs (nearly 7,700 person years) dependent on Port Metro Vancouver in the surrounding communities. This does not include employment in the rail, trucking and cruise industries, as these sectors are further discussed in later sections. As shown in Figure 4-5, shipping agents make up the largest component of the off-site employment, at 21% of all offsite jobs. Offsite jobs with service providers such as freight forwarders, manufacturers/processors and commercial fishing in the surrounding community depend on Port Metro Vancouver shipments. Figure 4-5: Port Metro Vancouver Offsite Jobs by Business Type Shipping 2,083 (21%) Freight Forwarder 1,515 (15%) Manufacturer/Processor Commercial Fishing 810 (8%) 1,453 (14%) Sawmill & Wood Preserve Insurance/Underwriting Tug/Tow/Barge Customs Broker Bulk Terminal Operator Ship Building/Repair 282 (3%) 264 (3%) 238 (2%) 198 (2%) 794 (8%) 687 (7%) Government Agency Freight Transportation Real Estate/Property Management 185 (2%) 183 (2%) 161 (2%) Total Offsite Employment = 10,200 Jobs Cargo Inspection Other 149 (1%) 1,154 (11%)

30 Economic Impacts by Location Direct employment related to Port Metro Vancouver in British Columbia is concentrated in Metro Vancouver (92% of direct person years in British Columbia), but is not limited to this geographic region. Port Metro Vancouver is a significant job generator elsewhere in B.C., and indeed throughout Canada. A total of 5,400 jobs outside of British Columbia are dependent on the trade activity at Port Metro Vancouver (See Table 4-2). Transportation carriers and direct transportation employment at shipper firms are supported in the Prairies and beyond as they serve their export and import markets through Port Metro Vancouver. Of total Port-related employment in Metro Vancouver, approximately 91% of jobs are concentrated in seven municipalities: Vancouver, Richmond, Surrey, Delta, the District of North Vancouver, New Westminster, and the City of North Vancouver, in descending job order. Figure 4-6 illustrates the distribution of employment at Port Metro Vancouver across Canada. Figure 4-6: Distribution of Port Metro Vancouver Employment across Canada Other British Columbia 3,388 PYs 3,794 Jobs District of West North Vancouver Vancouver 3,109 PYs 90 PYs 3,529 Jobs 137 Jobs City of North Vancouver 1,892 PYs 1,996 Jobs Port Moody 238 PYs Vancouver 285 Jobs 14,311 PYs 18,334 Jobs Burnaby 599 PYs 699 Jobs Richmond 4,978 PYs 5,710 Jobs Corporation of Delta 2,893 PYs 3,522 Jobs Alberta Manitoba Ontario Saskatchewan Quebec PYs 1,750 1,121 1, Jobs 1,824 1,121 1, Coquitlam 700 PYs Pitt 718 Jobs Meadows 280 PYs 286 Jobs Maple Ridge Port Coquitlam 395 PYs 740 PYs 427 Jobs 800 Jobs New Westminster 2,956 PYs 3,048 Jobs Surrey 3,656 PYs 4,002 Jobs City of Langley 176 PYs 180 Jobs Township of Langley 214 PYs 237 Jobs Total Direct PYs = Total Direct Jobs = 53,146

31 20 The employment survey requested information from employers as to where jobs are located, both in terms of Metro Vancouver municipalities, and elsewhere in B.C. or Canada. This section describes how the employment impact of Port Metro Vancouver is distributed across Canada. Table 4-2 provides a breakdown of the direct economic impacts for all locations in Canada. Table 4-2: Direct Economic Impacts by Location (All Locations in Canada) Jobs Person Years Wages ($Millions) Vancouver 18,300 14, Richmond 5,700 5, Surrey 4,000 3, Delta 3,500 2, North Vancouver (District) 3,500 3, New Westminster 3,000 3, North Vancouver (City) 2,000 1, Port Coquitlam Coquitlam Burnaby Maple Ridge Port Moody Pitt Meadows Langley (Township) Langley (City) West Vancouver Total Metro Vancouver 43,900 37,200 1,980 Other B.C. 3,800 3,

32 21 Jobs Person Years Wages ($Millions) Total B.C. 47,700 40,600 2,210 Alberta 1,800 1, Manitoba 1,100 1, Ontario 1,100 1, Saskatchewan Quebec Total 53,100 45,900 2,600 Note: Totals may not add up due to rounding Direct employment in British Columbia is estimated at 47,700 jobs, earning wages in the order of $2.2 billion. This includes individuals employed in all Metro Vancouver municipalities (43,900 jobs) and outside of Metro Vancouver (3,800 jobs). The municipalities with the largest employment impacts are those in which the Port owns assets, including: the City of Vancouver (represents 38% of total BC direct jobs), Richmond (12%), Surrey (8%), Delta (7%), the City of North Vancouver and the District of North Vancouver (12% combined), New Westminster (6%), Port Coquitlam (2%), Coquitlam (2%), and Burnaby (1%). Direct employment in other Canadian provinces is equivalent to 5,400 jobs or 5,300 person years. The majority of these direct jobs are with rail carriers, by and large, with the rest of services incidental to agriculture and other manufacturing/processing industries. The provinces with employment impacts attributable to Port operations include: Alberta (represents 3% of all direct jobs), Manitoba (2%), Ontario (2%), Saskatchewan (2%), and Quebec (1%). 4.6 Employment by Industry Sector The 53,100 jobs (equivalent to 45,900 person years) directly attributed to Port Metro Vancouver can be categorised by industry sector. Figure 4-7 shows relative employment at each of the five industry sectors that have been identified: Maritime Cargo Activity Cruise Services Construction, Vehicle Building & Repair Services Other Marine Related Services

33 22 Non-marine Related Services The largest category is maritime cargo activity, which includes services from shipping to stevedoring operations. The next largest category is cruise services, which attributes over 4,400 person years of employment. Chapter 8 discusses the economic impacts associated with Vancouver s cruise sector in further detail. Non-marine related employment jobs are located onsite at the Port, but do not require access to the Port to operate. Non-marine related activity makes up 9% of total direct employment. Construction, vehicle building and repair services includes activities related to the construction of docks, floating homes, and other properties located onsite at Port Metro Vancouver. Employment from this industry sector also comprises of jobs related to the building and repair of marine vessels, trucks and containers. More than 500 person years of employment are associated with this sector. Employment associated with other marine related services includes jobs that depend on its location but is not involved in marine transportation, including employment. This includes marinas and waterlots located onsite at Port Metro Vancouver and is estimated to be just over 200 person years of employment. Figures 4-8 provides a further breakdown of the activities included in the maritime cargo industry sector and the employment associated with these subsectors, while Figure 4-9 provides breakdown on the employment within non-marine related services. Figure 4-7: Direct Employment by Major Industry Sectors (Person Years) Maritime Cargo Activity 37,509 36,825 80% Cruise Services 4,441 10% Non-marine Related Services 3,937 9% Construction, Vehicle Building & Repair Other Marine Related Services 515 1% 200 0% Total Direct Employment = 45,900 PYs

34 23 Figure 4-8: Breakdown of Maritime Cargo Direct Employment (Person Years) Rail 8,204 22% Manufacturing/Processing 4,244 12% Stevedoring 3,836 10% Shipping Sawmill & Wood Preserve Tug/Tow/Barge 2,541 3,543 10% 3,262 9% 7% Commercial Fishing 1,914 5% Insurance/Underwriting 1,720 5% Bulk Terminal Operator Container Terminal Operator 1,315 1,123 3% 4% Trucking Freight Forwarder Government Agency Storage/Warehousing 241 1,085 3% 967 3% 648 2% 1% Total Maritime Cargo Direct Employment Dredging Consulting % 1% = 36,800 PYs Breakbulk Terminal Operator 199 1% Other 1,541 4%

35 24 Figure 4-9: Breakdown of Non-Marine Related Direct Employment (Person Years) Accommodations Real Estate/Property Management Holding Company Casino Association Retailer Restaurant Air Service Teaching Institute Other 392 (10%) 350 (9%) 342 (9%) 225 (6%) 145 (4%) 68 (2%) 40 (1%) 19 (0%) 1,816 (46%) 540 (14%) Total Non-Marine Related Direct Employment = 3,900 PYs 4.7 Employment by Job Trade Firms that responded to the employment survey were asked to provide a breakdown of their total Port-related jobs by job category. Although this is not a complete picture of the total employment related to the Port, it provides an indication of the trades that are most frequently employed in the Port business community. According to Figure 4-10, ILWU Stevedores is the most common job categories with more than 5,000 jobs. These are followed by Managers/Supervisors with approximately 3,100, then by Sales/Customer Service with close to 2,300 jobs. Of the survey respondents that indicated a type of employment other than the categories listed in the survey, some provided a specific title or job description in the other category. These included: General Labour Engineering Manufacturing/Production/Processing Shipper/Receiver Operations Skilled Tradesmen