EnviroStats
Canada’s oceans and the economic contribution of marine sectors

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Highlights

This article examines the economic contributions provided by Canada’s marine sector, many of which depend on ocean ecosystems. The main findings include:

• Canada’s coastal population—its population living within 10 km of the Pacific, Arctic or Atlantic coasts—was 4.8 million in 2016.
• Marine sectors in Canada make a significant contribution to provincial, regional and national economies. In 2018, activities linked to these sectors represented 1.6% of both Canada’s total employment and gross domestic product (GDP) estimates. The contribution of marine sectors was particularly high in Newfoundland and Labrador (employment: 16.8%, GDP: 30.0%), Nova Scotia (employment: 13.3% and GDP: 13.5%), and Prince Edward Island (employment: 9.3%, GDP: 10.3%).
• The private sector was the main driver of the marine economy in 2018, accounting for 79.6% of total employment and 83.1% of total GDP contribution. Fishing and seafood, transportation, and oil and gas were the industries showing the largest economic contribution. The public sector, encompassing federal and provincial governments, universities, and environmental non-governmental organizations (ENGOs), accounted for the remaining 20.4% employment and 16.9% GDP impacts.
• The industries that generated the most employment in 2018 were transportation (23.0% of total employment), fishing and seafood (21.8%), and tourism and recreation (21.3%).The industries that generated the most GDP in 2018 were fishing and seafood (21.1% of total GDP), transportation (20.8%), and oil and gas (20.8%).
• Between 2014 and 2018, employment grew by 11.6% from 267,278 to 298,333 and GDP increased 12.3%, from $32.1 billion in 2014 to $36.1 billion in 2018. Employment in the manufacturing and construction and the transportation industries exhibited the strongest growth over the period, increasing by 21.9% and 20.9% respectively. In terms of GDP, the strongest growth was in the manufacturing and construction industry (39.4%), followed by fishing and seafood (32.2%), and tourism and recreation (29.1%). Among the major industry groupings, only offshore oil and gas posted a decline in GDP (of 21.5%), caused in large part by lower oil prices over the period.
• Measured as a share of total employment and GDP, the contribution of marine sectors to the Canadian economy remained relatively stable from 2014 to 2018. The share of employment increased slightly (6.5%) from 1.5% in 2014 to 1.6% in 2018, while the share of total GDP, meanwhile, remained stable at 1.6% in both years.
• To date, Canada has protected and conserved 795,000 km² of ocean, surpassing the international Aichi Biodiversity Target to conserve at least 10% of coastal and marine areas. However, climate change poses a particular challenge to Canada’s ocean ecosystems. As ocean waters warm,^{Note 1} fish populations are expected to migrate northwards^{Note 2} and new spawning grounds may need protected status.

Introduction

Activities dependent on the ocean make a substantial contribution to the Canadian economy. Fisheries and naval installations provided a rationale for the first European settlement. Fish processing, shipbuilding, and marine transportation followed, providing a basis for economic development and growth on all three of Canada's coasts. These ocean activities defined settlement patterns that continue to this day.

New marine economic activities emerged over the years including tourism, aquaculture, bio-technologies, specialized manufacturing, and offshore oil and gas exploration and development. A wide range of service industries support these activities. Together, they create substantial opportunities as well as challenges, emerging from increased and oftentimes competing uses of ocean space, including the need to protect and conserve Canada’s ecosystems and biodiversity.

A coastal Canada

Canada has the longest coastline in the world and its exclusive economic zone (EEZ) extends across 5.75 million km² of the Pacific, Arctic and Atlantic oceans. In 2016, 4.8 million Canadians, 13.5% of the population, lived within 10 km of the coast and a further 4.0% lived within 100 km of the coast (Table 1). The coastal share of population was highest in Prince Edward Island, Nunavut, Newfoundland and Labrador and Nova Scotia.

People living near the coast are most able to benefit from the ocean and its resources, through employment and participation in recreational activities. However, they, and many others, enjoy the ecosystem services provided by the ocean including fish and seafood, climate regulation, carbon storage services, as well as opportunities for tourism and recreation.

Economic contribution of marine sectors

In 2018, marine sectors in Canada generated 298,333 jobs and contributed $36.1 billion in GDP to Canada’s economy (Charts 1 and 2). A significant proportion of the employment and GDP was created in industries that are directly dedicated to the use or extraction of marine resources in Canada (direct impacts): 143,608 jobs and $20.0 billion in GDP. An additional 88,859 jobs and $9.1 billion in GDP were created in upstream industries that supply those directly involved in using and extracting marine resources (indirect impacts). Induced impacts, those corresponding to economic activity triggered by the expenditure of labour incomes generated by marine industries, contributed to creating 65,867 jobs and $7.0 billion in GDP

Charts 3 and 4 provide breakdowns of total marine sector employment and GDP into its component industries. The economic activity of marine sectors was led by private sector industries, which contributed 79.6% of jobs (237,482) and 83.1% of GDP ($30.0 billion). The industries that generated the most employment were transportation (68,762), fishing and seafood (64,996), and tourism and recreation (63,587). The industries that generated the most GDP were fishing and seafood ($7.6 billion), oil and gas ($7.5 billion), and transportation ($7.5 billion).

Canada’s public sector^{Note 9} contributed the remaining 20.4% of employment (60,851) and 16.9% of GDP ($6.1 billion, Chart 4). The federal departments of National Defence and Fisheries and Oceans Canada (including the Canadian Coast Guard) contributed most of the jobs (26,054 and 21,476 respectively) and of the GDP ($2.6 billion and $2.2 billion respectively) generated by the public sector (Annex Table 1 and Annex Table 2).

The overall contribution of marine sectors to the Canadian economy represented 1.6% of national employment and GDP (Annex Table 3 and Annex Table 4). The influence and significance of marine sectors on the economy of coastal provinces and territories is much larger, particularly in Atlantic Canada where marine sectors accounted for substantial shares of total provincial employment in Newfoundland and Labrador (16.8%), Nova Scotia (13.3%), and Prince Edward Island (9.3%). The contribution of marine sectors to total provincial GDP was also particularly high in Newfoundland and Labrador (30.0%), Nova Scotia (13.5%), and Prince Edward Island (10.3%). Overall, marine sectors contributed 3.8% of Canada’s marine regions’ employment and 4.1% of the country’s marine regions’ GDP (Annex Table 3 and Annex Table 4).

Between 2014 and 2018, employment grew by 11.6% from 267,278 to 298,333 (Annex Table 5, Chart 5), compared to an increase in GDP of 12.3%, from $32.1 billion in 2014 to $36.1 billion in 2018 (Annex Table 6). The manufacturing and construction and the transportation industries exhibited the strongest employment growth over the period, increasing by 21.9% and 20.9% respectively. In terms of GDP, the strongest growth was in the manufacturing and construction industry (39.4%), followed by fishing and seafood (32.2%), and tourism and recreation (29.1%). Among the major industry groupings, only offshore oil and gas posted a decline in GDP (-21.5%). This substantial decline in GDP was caused in part by a significant drop (-28.3%) in oil prices, from an average of US$99.02 in 2014 to $US 71.06 in 2018.^{Note 10}

Measured as a share of total employment and GDP, the contribution of marine sectors to the Canadian economy remained relatively stable from 2014 to 2018. The share of employment increased slightly (6.5%) from 1.5% in 2014 to 1.6% in 2018, while the share of total GDP, meanwhile, remained stable at 1.6% in both years. The main driver of this trend was the offshore oil and gas sector, which experienced a substantial drop in GDP, while employment dropped to a lesser extent.

Ocean ecosystems

In addition to the economic contributions provided by the marine sector, consideration must be given to the importance of protecting the ocean environment and biodiversity.

In 2010, Canada agreed to meet 20 global biodiversity targets by 2020, including Aichi Target 11, to conserve at least 10% of coastal and marine areas^{Note 11} and has now set a target of reaching 30% by 2030.^{Note 12} Protecting Canada’s ocean territory will contribute to species resilience and will help support sustainable industries and coastal communities and adaptation to future pressures.^{Note 13}

In 2019, 13.8% or 795,000 km² of Canada’s marine areas was conserved through a variety of measures including marine protected areas (6.1%), other effective marine conserved areas (4.9%), national marine conservation areas (2.0%) and national parks (0.2%) (Table 2).^{Note 14} The newest addition, Tuvaijuituk Marine Protected Area, is also the largest, covering 319,411 km² of the Arctic Ocean off the coast of Ellesmere Island.

Climate change poses a particular challenge to Canada’s ocean ecosystems. As ocean waters warm,^{Note 15} fish populations are expected to migrate northwards^{Note 16} and new spawning grounds may need protected status. The abundance and mix of species is expected to change, affecting fisheries. Canadian waters are also experiencing changes in ocean chemistry. The ocean has absorbed more than a quarter of the carbon dioxide produced by human activities, increasing the acidity of ocean water.^{Note 17} This increased acidity corrodes the shells and exoskeletons of molluscs and crustaceans, may impact mortality rates of young fish, and may increase the impact of harmful algal blooms.^{Note 18}

Climate change will potentially also result in increased storm events and larger waves, impacting many marine industries. Arctic waters in particular are experiencing larger waves as sea ice melts which in turn is helping to speed up the retreat of sea ice.^{Note 19}

Annex A: Data sources

Fishing and seafood

Commercial fishing:

Atlantic and Pacific Regions: Fisheries and Oceans Canada (DFO), commercial sea fisheries landings, Canada Provincial-Values, (http://www.dfo-mpo.gc.ca/stats/commercial/sea-maritimes-eng.htm).

Arctic Region: Pacific Region Integrated Fisheries Management Plans (http://www.pac.dfo-mpo.gc.ca/fm-gp/ifmp-eng.html) and DFO Central and Arctic region internal catch data.

Aquaculture: Statistics Canada Table 36-10-0488-01, Output, by sector and industry, provincial and territorial, Aquaculture [BS112500]. 2018 extrapolated from 2017 using Statistics Canada Table 32-10-0108-01, Aquaculture economic statistics, value added account, gross output.

Fish processing: Statistics Canada Table 36-10-0488-01, Output, by sector and industry, provincial and territorial, [BS311700], seafood preparation and packaging, 2018 extrapolated from 2017 using Statistics Canada Table 36-10-0402-01,Gross domestic product (GDP) at basic prices, by industry, provinces and territories, adjusted using Statistics Canada Table 18-10-0030-01, Industrial product price index, by product, NAPCS 171.

Offshore oil and gas

Oil and gas exploration/extraction: Statistics Canada Table 36-10-0488-01, Output, by sector and industry, provincial and territorial, [BS21100], oil and gas extraction, 2018 extrapolated from 2017 using Statistics Canada Table 36-10-0402-01 (Gross domestic product (GDP) at basic prices, by industry, provinces and territories) adjusted using Statistics Canada Table 18-10-0268-01 (Raw materials price index), NAPCS14111 for crude oil and NAPCS 142 for natural gas.

Transportation

Marine transportation: Statistics Canada Table 36-10-0488-01, Output, by sector and industry, provincial and territorial, Water transportation [BS483000]. 2018 extrapolated from 2017 using Statistics Canada Table 36-10-0402-01, Gross domestic product (GDP) at basic prices, by industry, provinces and territories; adjusted using Statistics Canada Table 18-10-0005-01 Consumer Price Index, annual average, not seasonally adjusted, Services

Support activities: Statistics Canada, Table 36-10-0478-01 Supply and use tables, detail level, provincial and territorial, Water transportation support, maintenance and repair services [MPS488004] products supplied by Support activities for transportation [BS488000] industry at basic prices. 2018 extrapolated from 2017 using Marine transportation growth rate.

Tourism and recreation

Recreational fishing: Fisheries and Oceans Canada 2015 Survey of Recreational Fishing data on expenditures, (http://www.dfo-mpo.gc.ca/stats/recreational-eng.htm), adjusted for saltwater expenditures only, and extrapolated forward using average growth rate.

Recreational boating: 2016 estimates on expenditures by type taking from 2018 National Marine Manufacturer Association (NMMA) Canadian Recreational Boating Statistical Abstract. Values back casted and extrapolated using new boat sales.

Cruise ships: 2012 and 2016 Business Research and Economic Advisors (BREA) reports: “The Economic Contribution of the International Cruise Industry in Canada” (interpolated for 2013 to 2015), total annual expenditures. Values for 2017 and 2018 extrapolated using number of cruise visitors sourced from Transport Canada annual reports and provincial government tourism ministries.

Coastal tourism: 2006 coastal tourism spending (calculated by Gardner Pinfold) extrapolated using reallocated expenditures by province/territory from Statistics Canada Table 24-10-0013-01 (2006-2010) and Table 24-10-0027-01 (2011-2017) and Table 24-10-0045-01 (2018).

Manufacturing and construction

Shipbuilding and boat building: Statistics Canada Table 36-10-0488-01, Output, by sector and industry, provincial and territorial, Ship and boat building [BS336600]. 2018 extrapolated from 2017 using Statistics Canada Table 36-10-0402-01, Gross domestic product (GDP) at basic prices, by industry, provinces and territories, Ship and boat building [3366]; adjusted using Table 18 10 0030 01, Industrial product price index, by product, monthly, Ships [44111] and Boats and personal watercraft [44211].

Ports and harbours construction:

Atlantic and Pacific Regions:

• Transport Canada, Transportation in Canada, Canada Port Authorities (CPA) Financial Profiles, Acquisition of Capital Assets
• Department of National Defence (DND) Estimated Expenditures by Electoral District and Province, Capital Investment
• Capital Expenditures for Marine Atlantic (https://www.marineatlantic.ca/en/about-us/corporate-information/Reports/) and BC Ferries (http://www.bcferries.com/our-company/investor-relationsl)

Arctic Region: Statistics Canada Table 34-10-0063-01, Capital expenditures, non-residential tangible assets, by type of asset and geography, plus Pangnirtung harbour expenditures (DFO internal data).

Public sector, universities and environmental non-governmental organizations

Department of National Defence (DND): Data on defence services operations and maintenance (O&M) and capital expenditures for coastal provinces and territories were obtained from DND. The data was derived from DND Estimated Expenditures by Electoral District and Province.

Fisheries and Oceans Canada (DFO): Expenditures were obtained by using DFO expenditures data sourced from the internally available Multi Year Financial Planning System.

Other federal departments: Total spending on marine-related activities from Departmental Performance Reports and Reports on Plans and Priorities for Canadian Food Inspection Agency (CFIA), Environment and Climate Change Canada (ECCC), Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC), Parks Canada (PCA), and Transport Canada (TC).

Provincial/territorial government departments: Provincial and territorial expenditures associated with the ocean economy were obtained from the Main Estimates and Public Accounts for each respective province and territory. An effort was made to exclude data otherwise counted in the National Accounts including ferry transportation, services to water transportation and marine-related construction.

Universities: Estimates of university ocean-related expenditures are based on a two-stage approach. The first stage is compiling all ocean-related grants from the Natural Sciences and Engineering Research Council of Canada (NSERC) and the federal Council for Innovation (CFI). In the case of the Territories, as there are no universities located there, they are allocated a portion of any grant relating to the Arctic Ocean. The second stage involved grossing up estimated annual expenditures for coastal universities (based on marine expenditures estimated from university budgets) using the increase in total university budgets from the Canadian Association of University Business Officers (CAUBO).

Environmental non-governmental organizations (ENGOs): 2008 expenditures (calculated by Acton White) grossed up using the growth rate of financial data of representative ENGOs (taken from the CRA Registered Charity Information Return).

Annex B: Summary tables