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Halifax
Stanfield International 2012
Airport Economic Impact Report
September 2013
Halifax Stanfield International Airport 2012 Economic Impact Report
1
Table of Contents
Executive Summary ............................................................................... 3
1 Introduction ...................................................................................... 7 1.1 Context ........................................................................................ 7 1.2 Airport Overview ........................................................................ 7 1.3 Highlights of 2012 .................................................................... 11 1.4 Operations ................................................................................. 14 1.5 The Airport Setting .................................................................. 21 1.6 Airport Facilities ........................................................................ 21 1.7 Regional Economy ................................................................... 29
2 Study Approach .............................................................................. 30 2.1 Introduction .............................................................................. 30 2.2 Economic Impact ..................................................................... 30 2.3 Study Area ................................................................................ 32 2.4 Economic Impacts Measured and Methods of
Measurement ............................................................................ 32 2.5 Fiscal Impact ............................................................................. 33
3 Economic Impacts ......................................................................... 34 3.1 Introduction .............................................................................. 34 3.2 Economic Output ...................................................................... 34 3.3 Employment .............................................................................. 35 3.4 Wages and Salaries ................................................................. 36 3.5 Renovation and New Construction Impact .......................... 37 3.6 Tourist/Visitors Impacts .......................................................... 38 3.7 ATB Retail Sales Impacts ........................................................ 39 3.8 Aerospace Cluster Impacts ..................................................... 39
4 Fiscal Impacts ................................................................................. 41 4.1 Introduction .............................................................................. 41 4.2 Personal and Consumption Taxes (Provincial) .................... 41 4.3 Retail Sales Tax (HST) ............................................................ 42 4.4 Commercial Property and Business Occupancy Taxes ....... 42
5 Conclusions ..................................................................................... 43
Halifax Stanfield International Airport 2012 Economic Impact Report
2
List of Exhibits
Exhibit 1.1 REGIONAL SETTING Exhibit 1.2 2012 HALIFAX STANFIELD INTERNATIONAL AIRPORT - SCHEDULED AND SEASONAL PASSENGER SERVICES Exhibit 1.3 HALIFAX STANFIELD INTERNATIONAL AIRPORT - WEEKLY ACTIVITY AUGUST 2002 to
2012 Exhibit 1.4 HALIFAX STANFIELD INTERNATIONAL AIRPORT - MAJOR EMPLOYERS 2012 Exhibit 1.5 HALIFAX STANFIELD INTERNATIONAL AIRPORT - AIR TRAFFIC STATISTICS 2007 to
2012 Exhibit 1.6 HALIFAX STANFIELD INTERNATIONAL AIRPORT - CONCESSION SALES 2007 to 2012 Exhibit 1.7 LAND USE PLAN AND NEW MASTER PLAN (2011) Exhibit 1.8 AIRSIDE SUBDIVISION LOTS Exhibit 1.9 ATLANTIC CANADA POPULATION - 1996 to 2012 Exhibit 1.10 HALIFAX REGIONAL MUNICIPALITY & NOVA SCOTIA KEY INDICATORS - 1996 and 2012 Exhibit 3.1 HALIFAX STANFIELD INTERNATIONAL AIRPORT - GROSS OUTPUT (MILLIONS) IN 2012 Exhibit 3.2 HALIFAX STANFIELD INTERNATIONAL AIRPORT - EMPLOYMENT (FULL-TIME EQUIVALENT) IN 2012 Exhibit 3.3 HALIFAX STANFIELD INTERNATIONAL AIRPORT - WAGES AND SALARIES (MILLIONS) IN 2012 Exhibit 3.4 HALIFAX STANFIELD INTERNATIONAL AIRPORT - ECONOMIC IMPACT OF AIR
TRAVELERS ENTERING NOVA SCOTIA IN 2012 Exhibit 3.5 AEROSPACE CLUSTER - GENERAL ESTIMATE OF 2011/12 ECONOMIC IMPACTS Exhibit 4.1 HALIFAX STANFIELD INTERNATIONAL AIRPORT - PERSONAL INCOME & CONSUMPTION TAXES (MILLIONS) IN 2012 Exhibit 4.2 HALIFAX STANFIELD INTERNATIONAL AIRPORT - RETAIL SALES (HST) TAXES
(MILLIONS) IN 2012 Exhibit 5.1 COMPARISON IMPACT OF HALIFAX STANFIELD INTERNATIONAL AIRPORT 2000 - 2012
Halifax Stanfield International Airport 2012 Economic Impact Report
3
Executive Summary Halifax Stanfield International Airport (HSIA) is one of 26 airports in
Canada’s National Airports System and is rated by passengers as one of
the best airports in the world. HSIA is operated by Halifax International
Airport Authority (HIAA) pursuant to the terms of a ground lease
agreement between HIAA and the Federal Government.
In 2012, HSIA served a record 3,605,701 passengers or over half of all
air travel passengers in Atlantic Canada. An estimated 15,000 people
pass through the Air Terminal Building (ATB) each day. It has a multi-
province catchment area and functions as a major economic and
employment generator for Halifax Regional Municipality (HRM) and Nova
Scotia. In 2012, HSIA provided direct and connecting passenger and
cargo service for 18 passenger carriers and 13 cargo carriers to
destinations in Canada, the United States, the Caribbean and Europe.
The global recession that hit the airline industry in mid-2008 was severe
with operating cash flows not returning to pre-recession levels until late
2010. Although 75% of Nova Scotia’s economy is based upon service
industries that did not experience the same economic downturn as other
regions, the recovery has been slow. In 2012, Nova Scotia’s gross
domestic product (GDP) increased by 0.9% following growth of 0.5% in
2011. Growth was also slow in the remainder of Atlantic Canada in 2012
and Canada-wide growth was a modest 2.0%.
Against this economic setting, 2012 was still a year of accomplishments,
which included more international awards and the substantial completion
of a major runway extension. These achievements occurred against a
backdrop of carriers shifting capacity in the second half of 2012 from
Eastern Canada to Western Canada or other markets.
The 2011 global Airport Service Quality (ASQ) ratings were released in
2012. The ratings are administered by Airports Council International.
For 2011, Halifax Stanfield was ranked as the third best in the world for
overall passenger satisfaction in its class (under five million passengers)
and placed third in North America. To date, Halifax Stanfield has earned
a total of 28 service quality awards.
HSIA has also been inducted into Airports Council International’s
Director General’s Roll of Excellence, honouring airports that have
ranked among the top five airports in the world for five consecutive years
in the ASQ ratings. HSIA has also been re-certified as ASQ Assured.
This distinction has been earned by just 12 airports world-wide.
Halifax Stanfield International Airport 2012 Economic Impact Report
4
HIAA also created a new airport service culture program in 2012,
branded “The Stanfield Way”. The program stresses the over-arching
purpose of all airport employees, regardless of role, to serve every
airport visitor. It is expected that all airport employees will have had an
opportunity to participate in this program by the end of 2016.
In February 2011, the Federal Government and the Province of Nova
Scotia announced a joint investment of up to $14 million towards the
extension of the main Runway (05/23) from 8,800 feet to 10,500 feet to
accommodate larger wide bodied and heavy weight aircraft with the
balance being invested by HIAA. Construction work started in late 2011
and the extended runway was fully operational on November 15, 2012.
Cargo growth is a key strategy of Halifax Stanfield as the runway
extension now allows wide-body cargo freighters to operate at full
capacity with the resulting benefits to all exporters; especially seafood
exporters who had to truck product to Boston or New York for export to
international markets. The runway extension further supports a multi-
tenant cargo facility that opened in June 2010. The facility is operated by
Gateway Facilities ULC and contains 40,000 square feet of state-of-the-
art cargo space with 7,000 square feet being climate controlled space. It
is the largest airside refrigerated space north of Miami and enables the
efficient export of high-value products, such as seafood.
In October 2011, Groupe Germain Hospitality announced plans to build a
$30.5 million onsite boutique hotel. It opened in 2013 under the ALT
Hotel brand. The facility includes 169 rooms and 6,775 square feet for
business meetings and gatherings. During 2012, $18 million was spent
on the project’s construction.
The 2010 Master Plan outlines a 20-year development program for the
airport lands. A key element is the planning and development of an
‘Airport City’ that will transform HSIA’s highway showcase location and
regional air hub amenities. In 2012, HIAA released land use plans and
concepts for groundside lands that focus on creating a gateway
destination that could support over 750,000 square feet of new office,
convenience, destination retail and other space.
In 2012, HIAA updated its 5-Year Strategic Plan. The new Strategic Plan
includes an updated mission and vision statement, values and goals, and
an assessment of the general economic conditions likely to occur over
the life of the plan. In addition, it provides an evaluation of current and
future conditions of the aviation industry.
HIAA retained an A+ credit rating from Standard & Poor’s (second
highest among Canadian airport authorities) in 2012.
Halifax Stanfield International Airport 2012 Economic Impact Report
5
In the fiscal year, HIAA generated revenues of $79.3 million and ended
the year with a surplus that is retained and reinvested in operations and
development. HIAA also invested $24.3 million in its’ capital
improvement program in 2012.
HSIA has a diversified tenant base and serves as the head office of IMP
Group Aerospace and Air Canada Jazz. This economic base has
allowed overall airport-related employment to grow from 2011 to 2012.
The major contributor to the airport’s economic base is IMP Group with
many of this firm’s employees involved in multi-year civilian or military
service contracts. In 2012, HSIA contributed $1.27 billion to the Nova
Scotia economy and provided 12,360 full-time equivalent (FTE) jobs with
wages and salaries of $507.5 million. These employees contributed
$60.9 million to the Province of Nova Scotia in terms of personal and
consumption taxes and $26.6 million in retail sales taxes.
Beyond the economic and fiscal impacts listed in the following exhibit,
renovation and new construction projects, tourists entering Nova Scotia
at HSIA and a cluster of aerospace businesses that includes the
adjacent AeroTech Business Park provide further positive local and
provincial spinoffs.
From 2000 to 2012, HIAA and tenants invested approximately $475
million in new capital development projects and the maintenance of
capital. These projects represent over 70% of the total capital
improvements at all airports in Atlantic Canada and created 7,975 FTE
jobs and contributed $300 million in wages and salaries. HIAA’s Capital
Plan to 2018, completion of the new ALT 169 room boutique hotel and
other expected future tenant projects, will require an additional $276
million in investments from both HIAA and tenants. These planned
projects will create 3,790 FTE jobs and generate $174 million in wages
and salaries.
Tourism is a $2.02 billion industry in Nova Scotia, based upon the most
recent provincial government statistics. There were 1.993 million visitors
to Nova Scotia in 2012 with 32% arriving via air at HSIA. Tourists
entering Nova Scotia at Halifax Stanfield tend to stay longer and spend
more money. They contributed an estimated $882 million to the Nova
Scotia economy and accounted for 15,030 jobs (direct and spinoff), $114
million in total taxes and $390 million in payroll. Spinoff refers to indirect
and induced impacts.
Halifax Stanfield International Airport 2012 Economic Impact Report
6
IMP Aerospace and tenants at the adjacent AeroTech Business Park are
an aerospace cluster with an estimated 1,450 employees in 2011/12.
This cluster has estimated direct and spinoff expenditures of $420
million. The direct and spinoff jobs are 2,900, and wages and salaries
are approaching $165 million.
COMPARISON IMPACT OF HALIFAX STANFIELD INTERNATIONAL AIRPORT 2000 - 2012
Impact
2000
2005
2012
% Change:
2005 to 2012
Total Gross Output Halifax Area Nova Scotia
(Millions)
$614.1 $1,035.1
(Millions)
$683.3 $1,152.8
(Millions)
$753.0 $1,273.0
+10.2% +10.4%
Total Employment Halifax Area Nova Scotia
7,495 11,000
7,870 11,625
8,310 12,360
+5.6% +6.3%
Wages and Salaries Halifax Area Nova Scotia
(Millions)
$196.7 $289.2
(Millions)
$260.3 $384.6
(Millions)
$341.2 $507.5
+31.1% +32.0%
Personal and Consumption Taxes (NS) Halifax Area Nova Scotia
(Millions)
$29.7 $43.7
(Millions)
$35.1 $53.5
(Millions)
$41.0 $60.9
+16.8% +13.8%
Retail Sales Tax Halifax Area Nova Scotia
(Millions)
$10.2 $15.0
(Millions)
$13.7 $20.2
(Millions)
$17.9 $26.6
See Note
Note: Comparisons cannot be made because of changing tax definitions and rates.
Halifax Stanfield International Airport 2012 Economic Impact Report
7
1 Introduction 1.1 Context
The Chris Lowe Group was retained by Halifax International Airport
Authority (HIAA) to determine the 2012 economic impacts of the facility
on Halifax Regional Municipality (HRM) and the Province of Nova Scotia.
The study uses the same approach as previous economic impact studies
at Halifax Stanfield International Airport (HSIA) initially prepared in 1990
and updated from 1992 to 2011. The 2012 update focuses on
incremental changes from previous years and includes a survey of major
airport tenants, and operating and financial data from HIAA.
The report contains five sections. Section 1, Introduction, provides an
overview of the airport and the regional economy. Section 2, Study
Approach, describes how economic and fiscal impacts are measured.
Section 3, Economic Impacts, presents the findings of the airport’s
economic impacts on HRM and Nova Scotia in 2012. Section 4, Fiscal
Impacts, defines the personal and consumption taxes, and retail sales
tax impacts in 2012. Section 5, Conclusions, is a summary of the 2012
update and includes comparisons to previous years.
1.2 Airport Overview
HSIA is one of 26 airports in Canada’s National Airports System and
ranks as one of the world’s premier airports based upon international air
service quality surveys. HSIA welcomed a record 3,605,701 passengers
in 2012 or more than half of all passengers in Atlantic Canada. Halifax
Stanfield has an average of over 170 flights per day with non-stop
service to 48 destinations (22 seasonal and 26 year-round). The facility
is located 35 kilometres northwest of HRM’s urbanized core on Highway
102 which is the major route to New Brunswick, Prince Edward Island
and points west and south. Land uses around the facility are rural or
commercial development that includes the AeroTech Business Park
along Highway 102.
The airport was opened by Transport Canada in 1960 with Instrument
Flight Rule (IFR) operations and a 16,900 square metre Air Terminal
Building (ATB). In 1960, 180,000 passengers were processed or
approximately 5.0% of the 2012 volume. From 1960 until 2000, the
facility was run by Transport Canada. In February 2000, management,
operation and development were transferred from Transport Canada to
HIAA under a 60-year lease. The airport has two runways (05/23 at
10,500 feet and 14/32 at 7,700 feet) with 29 operating gates and 13
loading bridge positions in the ATB. Jets up to and including the Boeing
747 can be accommodated.
Halifax Stanfield International Airport 2012 Economic Impact Report
8
Exhibit 1.1
REGIONAL SETTING
Halifax Stanfield International Airport
AeroTech Business Park
HWY 102
Downtown Halifax
Halifax Stanfield International Airport 2012 Economic Impact Report
9
HSIA is the largest airport in Atlantic Canada. It provides direct and
connecting passenger and cargo service across Canada, into the U.S.,
the Caribbean, Europe and Asia. This service is provided by 18
passenger carriers and 13 cargo carriers. The international catchment
area is Atlantic Canada and the domestic passenger catchment area is
Nova Scotia, Southern New Brunswick and Prince Edward Island. HSIA
is unique in Canada’s airport system as it serves four provinces (Nova
Scotia, New Brunswick, Prince Edward Island, and Newfoundland and
Labrador) because of the economic dominance of Halifax.
Halifax Stanfield’s regional importance was further enhanced in 2006
when U.S. Customs and Border Protection Services commenced
preclearance for passengers destined to the U.S. on non-stop flights. In
2012, HSIA remains the only airport in Atlantic Canada to enable
transborder passengers to be processed by U.S. Customs and Border
Protection Services prior to departure. The benefit of preclearance is
passengers now arrive at domestic gates in U.S. destination airports and
have faster connection options for their final destination.
Exhibit 1.2 2012 HALIFAX STANFIELD INTERNATIONAL AIRPORT - SCHEDULED AND SEASONAL PASSENGER SERVICES
17 Domestic
Destinations
13 Transborder (USA)
Destinations
18 International
Destinations
Calgary, AB
Charlottetown, PEI
Charlo, NB
Deer Lake, NL
Edmonton, AB
Fredericton, NB
Gander, NL
Goose Bay, NL
Hamilton, ON
Moncton, NB
Montreal, PQ
Ottawa, ON
Saint John, NB
St. John’s, NL
Sydney, NS
Toronto, ON
Toronto City Centre, ON
Atlanta, GA
Boston, MA
Chicago, IL
Detroit, MI
Ft. Lauderdale, FL
Newark, NJ
New York (La Guardia), NY
Orlando, FL
Philidelphia, PA
St. Petersburg, FL
Tampa, FL
Washington (Dulles), DC
Washington (National), DC
Bahamas – Nassau
Bermuda – Hamilton
Cuba – Cayo Coco, Havana,
Holguin, Santa Clara,
Varadero
Dominican Republic – Puerto
Plata, Punta Cana, Samana
Germany – Frankfurt
Iceland – Reykjavik
Jamaica – Montego Bay
Mexico – Cancun
St. Pierre et Miquelon
Turks and Caicos –
Providenciales
United Kingdom – London
(Gatwick), London (Heathrow)
Source: Halifax International Airport Authority.
HSIA offers 24 hour
operations without curfew or
noise abatement restrictions.
It functions as a major trans-
border and international
gateway airport with flights
connecting Atlantic Canada
to major centres in Canada,
the U.S. and internationally.
Halifax Stanfield International Airport 2012 Economic Impact Report
10
Since the transfer from Transport Canada in 2000, economic cycles and
geopolitical events have changed the airline industry and the role of
airports. In Canada, the airline industry has seen the demise or merger
of several airlines and the introduction of new carriers, rapid global
economic downturns and slow recoveries, higher energy costs,
pandemics and geo-political events like September 11, 2001. Over this
period, HIAA has followed a four-tier business planning process that
includes a 20-year Master Plan, a 10-year Capital and Financial Plan, a
5-year Strategic Plan and annual business plans. The Authority’s mission
is ‘a world-class airport creating prosperity for our region by connecting
Atlantic Canada to the world through flight’. A Master Plan update to
2030 was completed in 2011 that aligns the mission with market-driven
changes to the airfield, terminal area, highway commercial development,
multi-modal and logistics development and land acquisition.
Halifax Stanfield International Airport 2012 Economic Impact Report
11
1.3 Highlights of 2012
2012 was a year of accomplishments, which included more international
awards and the substantial completion of a major runway extension.
These achievements occurred against a backdrop of carriers shifting
capacity in the second half of 2012 from Eastern Canada to Western
Canada or other markets.
Halifax Stanfield continues to be rated by its passengers as one of the
best airports in the world. The 2011 global Airport Service Quality (ASQ)
ratings were released in 2012. The ratings are administered by Airports
Council International and measure 34 elements of passenger airport
experience and how well each element satisfies passenger expectations.
To date, HSIA has earned a total of 28 service quality awards.
For 2011, Halifax Stanfield was ranked as the third best in the world for
overall passenger satisfaction in its class (under five million passengers)
and placed third in North America.
HSIA has also been inducted into Airports Council International’s
Director General’s Roll of Excellence, honouring airports that have
ranked among the top five airports in the world for five consecutive years
in the ASQ ratings. HSIA has also been re-certified as ASQ Assured.
This distinction has been earned by just 12 airports world-wide.
Halifax Stanfield International Airport 2012 Economic Impact Report
12
HIAA also created a new airport service culture program in 2012,
branded “The Stanfield Way”. The program stresses the over-arching
purpose of all airport employees, regardless of role, to serve every
airport visitor. It is expected that all airport employees will have had an
opportunity to participate in this program by the end of 2016.
In February 2011, the Federal Government and the Province of Nova
Scotia announced a joint investment of up to $14 million towards the
extension of the main Runway (05/23) from 8,800 feet to 10,500 feet to
accommodate larger wide bodied and heavy weight aircraft with the
remaining balance being invested by HIAA. Construction work started in
late 2011 and the extended runway was fully operational on November
15, 2012.
Cargo growth is a key strategy of Halifax Stanfield as the runway
extension now allows wide-body cargo freighters to operate at full
capacity with the resulting benefits to all exporters; especially seafood
exporters. The runway extension further supports the multi-tenant cargo
facility that opened in June 2010. The $15 million facility is operated by
Gateway Facilities ULC and contains 40,000 square feet of state-of-the-
art cargo space that includes 7,000 square feet of climate controlled
space. It is the largest airside refrigerated space north of Miami and
enables the efficient export of high-value seafood.
Over the next decade, air cargo is forecast to grow between 85% to
100%. The growth is reflected in the decision by Icelandair Cargo in
November 2011 to restart scheduled weekly Boeing 757 air cargo
service to Reykjavik and onto the major European cargo hub at Liege,
Belgium. Both FedEx and Cargojet have also upgraded their Halifax
based fleets from Boeing 727s to 757s to provide increased capacity.
Thirteen cargo carriers currently handled over 20,000 metric tonnes of
freight while the remaining 9,000 plus metric tonnes are transported on
passenger flights.
Halifax Stanfield International Airport 2012 Economic Impact Report
13
In October 2011, Groupe Germain Hospitality announced plans to build a
$30.5 million onsite boutique hotel. It opened in 2013 under the ALT
Hotel brand. The facility includes 169 rooms and 6,775 square feet for
business meetings and gatherings. During 2012, $18 million was spent
on the project’s construction.
The 2010 Master Plan outlines a 20-year development program for the
airport terminal, airfield, and surrounding properties in response to
growing passenger traffic and commercial opportunities. A key element
of the plan is the planning and development of an ‘Airport City’ that will
transform HSIA’s highway showcase location and regional air hub
amenities. The concept contains five development clusters focusing on
aviation, logistics, aviation reserve (airfield access), multi-modal and
highway commercial development. In 2012, HIAA released land use
plans and concepts for groundside lands that focus on creating a
gateway destination that could support over 750,000 square feet of new
office, convenience, destination retail and other space.
In 2012, HIAA updated its 5-Year Strategic Plan. The new Strategic Plan
includes an updated mission and vision statement, values and goals, and
an assessment of the general economic conditions likely to occur over
the life of the plan. In addition, it provides an evaluation of current and
future conditions of the aviation industry.
Halifax Stanfield International Airport 2012 Economic Impact Report
14
HIAA retained an A+ credit rating from Standard & Poor’s (second
highest among Canadian airport authorities) in 2012. In the fiscal year,
HIAA generated $52.4 million in operating and interest revenues, and
collected $26.9 million in airport improvement fees for total revenues of
$79.3 million ($77.9 million in 2011). Total expenses for 2012 were $77.7
million ($74.4 million in 2011). Revenues exceeded expenses by $1.6
million in 2012 ($3.4 million in 2011). The surplus revenue was retained
and reinvested in operations and development. HIAA also invested
$24.3 million ($21.8 million in 2011) in its capital improvement program.
1.4 Operations
HSIA had 3,605,701 enplaned/deplaned passengers in 2012. This
represents the airport’s busiest year in its 52-year history.
Twenty-eight passenger and cargo carriers operated from the airport in
2012. The carriers are:
Air Canada Air Canada Jazz Air Georgian
CanJet Airlines Skylink Express Delta Air Lines
WestJet Airlines Air Saint-Pierre Air Transat
US Airways Cubana Cargojet
Icelandair Sunwing Airlines ABX / TNT
Condor Flugdienst Porter Airlines Air North
American Airlines United / Continental Airlines
Canadian North Provincial Airlines
Cougar Helicopters Kelowna Flightcraft (Purolator)
Execaire Morningstar Express (FedEx)
Canadian Helicopters Maritime Air Charters
Exhibit 1.3 lists the August 2012
destinations of flights from HSIA. There
were 553 flights per week to Canadian
destinations, 107 to transborder (U.S.)
destinations and 17 to international
destinations. In comparison to 2002,
weekly transborder flights increased 37%
and total flights by 18%.
Air Canada/Jazz/Georgian has the largest market share. These carriers’
share of total weekly departing flights went from 83% in August 2002 to
62% during August 2012.
An estimated 15,000 people
pass through the Air
Terminal Building every day.
Scheduled and seasonal
passenger services in 2012
included 17 domestic
destinations, 13 transborder
(U.S.) destinations and 18
international destinations. International destinations
included England, Germany,
Iceland, Bermuda, Mexico
and several Caribbean
islands.
Halifax Stanfield International Airport 2012 Economic Impact Report
15
Exhibit 1.3 HALIFAX STANFIELD INTERNATIONAL AIRPORT -
WEEKLY ACTIVITY AUGUST 2002 to 2012
Air Carrier – Domestic Service
2002 Flights
Per Week
2012 Flights
Per Week
2012 Destinations
Air Canada/ Air Canada Jazz/Georgian
415 393 Deer Lake, Fredericton, Ottawa, Moncton, Sydney, Saint John, St. John’s, Montreal, Gander, Charlottetown, Goose Bay, Toronto
Porter Airlines 0 76 Ottawa, Montreal, St. John’s
WestJet 0 84 Hamilton, St. John’s, Toronto, Edmonton, Calgary, Ottawa
Subtotal 472 553
Air Carrier – Transborder Service
Air Canada/Air Canada Jazz
42 19 Boston
Delta Air Lines 21 22 Boston, New York (LGA), Atlanta US Airways 0 24 Philadelphia, Washington National (DCA) United/Continental Airlines
0 42 Newark, Washington, DC (IAD), Chicago
Subtotal 78 107
Air Carrier – International Service
Air Canada 8 7 London (Heathrow), Bermuda Air Saint-Pierre 4 3 St. Pierre Icelandair 0 3 Reykjavik Air Transit 1 1 London (Gatwick) Condor 0 3 Frankfurt Subtotal 13 17
Total 563 677
Note: The exhibit only lists 2012 carriers. The totals for 2002 include carriers that no longer operate at the airport. Source: Halifax International Airport Authority.
Halifax Stanfield International Airport 2012 Economic Impact Report
16
HSIA now has the infrastructure to
accommodate more air cargo with
the extension of Runway 05/23. The
air cargo sector includes carriers,
freight forwarders, customs brokers
and cargo specialists. HSIA handled
29,570 metric tonnes in 2012
compared to 29,263 metric tonnes in
2011, 28,450 in 2010 and 26,910 in
2009. Forecasts by Transport Canada (excluding Runway 05/23
extension) have cargo activity reaching 43,400 metric tonnes in 2019
and 49,000 metric tonnes by 2024.
To support future air cargo activities, Halifax Stanfield has obtained
approval from Transport Canada to participate in the international air
cargo transshipment program. This program allows air cargo to fly into
Halifax for shipment to third countries. For example, cargo can arrive at
Halifax from the U.S., be stored temporarily and then move to European
or Asian destinations. International air cargo can also arrive from
overseas destinations and then be shipped by highway to the United
States under NAFTA.
Liège, Belgium-based TNT Airways, Cargojet and Icelandair provide
regular scheduled international cargo service and HIAA is pursuing other
wide-body freighter operations. The diverse range of support operators
for air cargo are listed below.
Freight Forwarders Integrated Couriers Connexion World Cargo (Canada) Ltd. Federal Express DSV Air & Sea Inc. Purolator Courier
Kintetsu World Express Inc. Cargojet Kuehne & Nagel International Ltd.
Leisure Cargo Cargo Handlers MOL Logistics Worldwide Flight Services PF Collins Customs Broker Ltd. Air Canada Cargo UPS Supply Chain Solution Servisair Worldwide Perishables Canada Worldwide Perishables Canada
Halifax Stanfield International Airport 2012 Economic Impact Report
17
Customs Brokers Other Cargo Services Atlantic Customs Brokers Armour Transport Inc. KN Customs Brokers Canadian Gold Seafood Ltd. DB Schenker Cape Nova Express EDI Custom Brokers Halifax Marine Agencies Ltd. Kintetsu World Express Inc. Monts Transfer Ltd. Livingston International Inc. Pole Star Transport Inc. PBB Global Logistics Summit Transportation Group PF Collins Customs Broker Ltd. Network Cargo Systems
Passenger carriers flying from Halifax Stanfield operate mostly in mature
markets where passenger volumes generally increase or decline in
parallel with regional economic activity. In 2009, a global recession
negatively impacted the air transport sector as passenger traffic fell 6.3%
in North American and system capacity dropped by 5.6% (source: IATA).
There was a strong recovery in passenger traffic in 2010 and then a
flattening of passenger growth to 1.7% in 2011 and 0.2% in 2012. The
highly competitive nature of the airline industry, and a slowing world
economy, have resulted in consolidation in the U.S. market where
several mergers have resulted in capacity being reduced by 10% to pre-
recession levels. There has also been fewer new airlines formed.
Changes in the industry’s structure are a significant factor in allowing
airlines to retain efficiencies implemented in the recession with the
resulting improvement in profits.
The two major carriers at HSIA are Air Canada Jazz and Air Canada. Air Canada Jazz had 717 full-time equivalent (FTE) jobs based at HSIA
in 2012 or three less than in 2011. Air Canada/Air Canada Cargo
increased its workforce by 32% from 361 in 2011 to 418 during 2012.
HSIA’s diversified tenant base and head office functions of IMP Group
Aerospace and Air Canada Jazz have contributed to employment growth
in recent years. The largest contributor to the airport’s economic base is
IMP Group which had 1,108 FTE employees in 2012 or an increase of
9.2% from 1,015 FTE employees in 2011. A focus of IMP’s operations is
multi-year service contracts with the U.S. Navy and the Department of
National Defence. This operating environment also exists for Pratt &
Whitney Canada and L-3 Communications Electronic Systems located in
the adjacent AeroTech Business Park with an estimated combined 500
FTE employees in 2011/12.
Halifax Stanfield International Airport 2012 Economic Impact Report
18
Air security has required more workers since 2001. The major security
employer is Canadian Air Transport Security Authority (CATSA) with an
employee base that has increased from 30 in 2002 to 226 by 2012. One sector that relies on
passengers is ground
transportation. There are 190
active and licensed taxis and
limousines, and a further 396
non-registered taxis /
limousines and 50 shuttles
through the MACPass system
that operate regularly at HSIA.
These operators made 140,000 pickups (curb tickets collected) in 2012.
Based upon the level of activity, the airport created approximately 170
FTE taxi and limousine driver positions.
In May 2012, ground
transportation options for
passengers and employees
increased with the introduction
of Metro Transit’s commuter
bus service to Downtown
Halifax via Fall River. MetroX
Route 320 offers seven day a
week service (half hour peak
service and hourly regular
service). The 40-foot air conditioned bus can accommodate 36 seated
passengers and features luggage racks and a front mounted bicycle
rack. The first bus leaves Downtown Halifax before 5:00 am and the last
bus leaves Halifax Stanfield at 12:15 am.
HIAA made a one-time contribution to Halifax Regional Municipality of
$500,000 towards the service.
Diversification of core business activities or major new service contracts
allowed many of the key tenants to maintain or modestly increase
employment levels in 2012 from 2011. Exhibit 1.4 presents a list of the
major employers in 2012. Beyond this list, there are many smaller firms
that collectively maintained employment in 2012 at 2011 levels.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Exhibit 1.5 lists passenger and aircraft movement activity between 2007
and 2012. Over this period, total enplaned and deplaned passengers
increased by 3.9% from 3,469,062 to 3,605,701 while total aircraft
movements declined by 0.4% from 89,251 to 88,898. The decline results
from fewer piston and local aircraft movements while itinerant
movements have increased. In 2012, the average number of
passengers per aircraft movement was 40.6, or above the average of
39.9 for the previous five years.
Exhibit 1.6 presents the 2012
concession sales at HSIA in
comparison to selective previous
years. Total sales in 2012 were
almost $80.5 million or $22.32 per
passenger (or slightly below 2011
levels). Car rental concessions
totalled $39,235,226 or $10.88 per passenger. The total average annual
rental car sales volume for the previous five years was $40.3 million.
Exhibit 1.4
HALIFAX STANFIELD INTERNATIONAL AIRPORT - MAJOR EMPLOYERS 2012
Employer Full-Time
Equivalent (FTE) Employees
IMP 1,108 Air Canada Jazz 717 Air Canada/ Air Canada Cargo 418 CATSA 226 HIAA 167 HMS Host International 115 Servisair 100 Avis/Budget 92 FedEx 79 Gate Gourmet 78 PAL 77 Tim Hortons 68 Hudson Group 57 NavCanada 51 Cougar Helicopters 45 National/Enterprise/Alamo (ANC) 33 Source: Chris Lowe Group and Halifax International Airport Authority.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Exhibit 1.5
HALIFAX STANFIELD INTERNATIONAL AIRPORT - AIR TRAFFIC STATISTICS 2007 to 2012
Enplaned / Deplaned Passengers: Total Aircraft
Movements: Passenger Average Per
Movement: 2007 3,469,062 89,251 38.9 2008 3,578,931 89,033 40.2 2009 3,417,164 88,477 38.6 2010 3,508,153 87,021 40.3 2011 3,594,164 86,874 41.4 2012 3,605,701 88,898 40.6
Source: Halifax International Airport Authority.
Exhibit 1.6
HALIFAX STANFIELD INTERNATIONAL AIRPORT - CONCESSION SALES 2007 to 2012
Year Enplaned / Deplaned
Passengers
Total Concession Sales
Sales Per Passenger
2007 3,469,062 $80,351,150 $23.16 2008 3,578,931 $81,071,915 $22.65 2009 3,417,164 $78,739,225 $23.04 2010 3,508,153 $79, 711,056 $22.72 2011 3,594,164 $80,570,892 $22.42
2012 3,605,701 $80,478,770 $22.32
Car Rental Concession Portion
2007 3,469,062 $40,665,786 $11.72
2008 3,578,931 $40,675,586 $11.37
2009 3,417,164 $40,385,453 $11.82
2010 3,508,153 $40,019,450 $11.41
2011 3,594,164 $39,976,260 $11.12
2012 3,605,701 $39,235,226 $10.88
Source: Halifax International Airport Authority.
Halifax Stanfield International Airport 2012 Economic Impact Report
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1.5 The Airport Setting
Adjacent to HSIA is the 970 hectare AeroTech Business Park operated
by HRM. During 2012, there were no lots available for sale. Two major
tenants in the aerospace field are located in AeroTech. They are Pratt
and Whitney Canada and L-3 Electronic Systems Inc. Combined with
tenants at the airport, the aerospace cluster had an estimated 1,450
employees in 2011/12.
Hilton Garden Inn opened a 145
room hotel in AeroTech during
2005 and Holiday Inn Express
followed with a new 119 room
hotel on the same site in 2008.
Another nearby operation is a
Quality Inn (former Airport Hotel
Halifax), which has 156 rooms.
Combined, the three properties have over 100 FTE employees. In 2013,
the airport’s accommodation base increased by 169 rooms or 40% to
589 rooms when the new ALT Hotel opened. This $30.5 million project
has 45 FTE employees.
1.6 Airport Facilities
The 20-year Master Plan provides HIAA with a longer-term framework for
land uses, infrastructure, services and development projects. The Land
Use Plan for HSIA is shown in Exhibit 1.7. It was initially prepared in
1996 and amended (with associated drawings) in 2002. An updated
Master Plan was completed in 2011 and it is also shown in Exhibit 1.7.
The airport's various land uses are classified as:
Airfield District
Future Airfield District
Operational Services
Air Terminal District
Aviation Services
Airport Industrial
Airport Commercial
Airport Reserve
Future Roads / Runways / Taxiways
The major features of the airport are the airfield, commercial
development and terminal complex.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Airfield
HSIA has simultaneous intersecting runway operations that allow for
increased traffic capacity with fewer delays and lower fuel costs.
Runway 05/23 is 10,500 feet by 200 feet with an asphalt/concrete base
and Runway 14/32 is 7,700 feet by 200 feet with an asphalt base.
Taxiways A to H have an average width of 75 feet. There are six aprons
with an average area ranging from 67,713 square feet to 597,070 square
feet.
NavCanada operates the Air Navigation System across Canada and has
51 FTE employees at the airport. The Instrument Landing System (ILS)
navigational aids are Category II while Raytheon Canada Radar provides
primary and secondary coverage on Runway 05/23.
Commercial Development
Commercial land is leased and not sold. In 2012, there were over 20
major commercial and industrial tenants. Airside taxiway access land is
leased to companies involved in aircraft overhaul and repair, air cargo
and courier, helicopter transport and aircraft servicing. Non-taxiway
access land is leased to firms involved in flight food service, brokering,
airport services and car rentals. A service station (Petro Canada) and
fast food outlet (Tim Hortons) are also present.
A commercial development initiative is the Airside Subdivision Project,
which contains 17 parcels with airside access. Exhibit 1.8 shows that
these lots are designed for aircraft maintenance facilities, air cargo
transshipment areas, offshore oil and gas supply centres, and aircraft
servicing and maintenance activities.
CHC Helicopters International leased one of the lots in 2002 for a new
$3.5 million passenger terminal and helicopter facility. In 2003, Inland
Technologies opened a $1.5 million glycol recovery operation for the fluid
used to de-ice airplanes. IMP completed a new $15 million aerospace
hangar in 2006. During 2008, a lease was signed with Gateway Facilities
ULC to build and manage a $15
million multi-tenant cargo facility that
contains 40,000 square feet. This
facility became operational in 2010.
Also in 2010, Cougar Helicopters
commenced construction on a
22,000 square foot hangar that
opened in 2011 to service the
offshore oil and gas sector.
Halifax Stanfield International Airport 2012 Economic Impact Report
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In 2011, HIAA had an updated Master Plan for the period to 2030
approved by Transport Canada as a requirement of the Ground Lease.
The updated plan states that the airfield has sufficient capacity to meet
future hourly and annual aircraft movements up to 2030. The ATB is
anticipated to require expansion if increased passenger traffic both
before and after 2020 meets projections. A major feature of the updated
plan is the Airport City Development Plan. It contains the following
features:
A Highway Commercial Precinct for aeronautical and other
businesses with showcase visibility from Highway 102.
A Multi-Purpose Precinct that is accessed by the terminal roadway
system and will contain businesses that meet the commercial
needs of passengers, as well as meeters and greeters.
An Aviation Precinct with facilities for passenger air service
support, general aviation fixed base operators, refueling and
aircraft maintenance.
A Logistics Precinct that is intended to become a key
transshipment centre for North America.
An Aviation Reserve that is for commercial activities requiring
airfield access.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Exhibit 1.7
LAND USE PLAN AND NEW MASTER PLAN (2011)
Halifax Stanfield International Airport 2012 Economic Impact Report
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Exhibit 1.7 LAND USE PLAN & NEW MASTER PLAN (2011)
Halifax Stanfield International Airport 2012 Economic Impact Report
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Exhibit 1.8 AIRSIDE SUBDIVISION LOTS
Halifax Stanfield International Airport 2012 Economic Impact Report
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Terminal Building
The Air Terminal Building (ATB) opened in 1960 and it has been
expanded and upgraded numerous times. During 1976, it was enlarged
to accommodate three million annual passengers and this volume was
surpassed in 2004. The international arrival area was expanded and
upgraded in 1987 and has since received additional work. Also, a major
upgrade was completed for the G7 Summit held in Halifax during 1995.
With the facility’s transfer from Transport Canada to HIAA in 2000, over
$100 million has been invested in:
an expanded international arrivals area approximately three times
larger than the previous size;
a domestic arrivals area quadruple the former size;
U.S. preclearance facilities;
a separate and expanded international greeting area;
new Customs, Immigration and Canadian Food Inspection Agency
facilities; and
additional retail space (including Airport Square).
During 2008, major terminal modifications were made as part of the ATB
Groundside Redevelopment Program. This work included
redevelopment of the centre core to efficiently move passengers from the
new parking structure through the ATB by four new escalators, two
elevators and an updated exterior façade.
The ATB currently has 29 operational gates and 13 aircraft loading
bridge positions that can accommodate jets up to the size of Boeing
747s. There are also two covered walkways. Passenger services and
amenities include a tourism visitor information centre, first aid facility,
flight information display system, baggage carts, lounges, duty free
shops, retail outlets and restaurants.
In 2012, HIAA launched a $44.5 million project to upgrade the airport’s
baggage handling systems and to modernize its passenger check-in
processes. The new baggage handling systems will result in increased
reliability and capacity while further improving the security screening of
checked bags. Passengers bound for the United States will benefit from
shorter connection times as a result of harmonizing the screening
process with the process used by U.S. airports. The latest technology in
passenger processing will be deployed in the check-in hall to enable a
faster and more efficient check-in experience for the passenger. The
space will be renovated to provide improved circulation and greater use
of natural light. Construction started in late 2012 and will be complete in
the Spring of 2014.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Main Level Domestic/International Departure
Level Atlantic Sweet Shoppe AerRianta Duty Free Burger King Beaches Central Amusements Booster Juice The Chickenburger Brisket Boardwalk Deli Clearwater Seafoods The Classic Backrub Everything Under $20 Clearwater Seafoods Hudson Aeromart Hudson News (4 locations) Hudson News Legends Nova Scotia Lounge Kids Works Starbucks Maritime Ale House Tech on the Go Nova Scotia Store Tim Hortons Relay Books US Preclearance Departure Level Roots AerRianta Duty Free Starbucks Hudson News Tim Hortons Spirit of the Maritimes TravelEx Tim Hortons Travel & Leisure Travel Store
Halifax Stanfield International Airport 2012 Economic Impact Report
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1.7 Regional Economy
Demand for air passenger and cargo transportation is a function of
economic activity. The trend for Atlantic Canada’s economy is a stable
population base with declining unemployment and real economic growth
driven by resource development and the service sector. From 1996 to
2012, the region’s population declined by less than 1.0% from 2,381,002
to 2,363,500. Most of this decline occurred in Newfoundland and
Labrador as Nova Scotia’s population increased from 931,235 to
948,700. The population of New Brunswick and Prince Edward Island
also increased.
Halifax Regional Municipality (HRM) is the largest population and service
centre in Atlantic Canada. HRM has generated strong economic
performance and is the major contributor to Nova Scotia’s economy.
Between 1996 and 2012, the number of people employed in HRM
increased by 67,900 or 39.5% from 172,100 to 240,000 and
unemployment declined from 8.6% to 6.2%. Provincially, total
employment increased by 67,600 or 17.6% from 385,000 to 452,600
while unemployment declined from 12.6% to 9.0%.
Exhibit 1.10 HALIFAX REGIONAL MUNICIPALITY & NOVA SCOTIA
KEY INDICATORS - 1996 and 2012
Halifax Regional Municipality Nova Scotia
1996 2012 1996 2012
Total Population 341,500 413,700 931,200 948,700
Employed Labour Force 172,100 240,000 385,000 452,600
Unemployment Rate 8.6% 6.2% 12.6% 9.0%
Labour Force Participation Rate
67.5%
70.1%
59.8%
64.1%
Sources: Nova Scotia Department of Finance – Economics Indicators (July 2013); Greater Halifax Partnership (August 2013); Statistics Canada CANSIM Tables 051-0046 (August 2013).
Exhibit 1.9
ATLANTIC CANADA POPULATION - 1996 to 2012
Province 1996 2012 Change Newfoundland & Labrador 560,584 512,700 -47,884PEI 136,188 146,100 +9,912 Nova Scotia 931,235 948,700 +17,465 New Brunswick 752,995 756,000 +3,005 TOTAL 2,381,002 2,363,500 -17,502 Source: Statistics Canada, Population Estimates & Projections, CANSIM Table 051-0001 (September 2012).
A key factor influencing air
traffic demand, and hence
economic impacts, is the
strength of the Nova Scotia
and Atlantic Canada
economies. In 2012, GDP
growth was 0.9% in Nova
Scotia, -0.7% in
Newfoundland and Labrador,
1.4% on PEI and 0.8% in
New Brunswick. Nationally,
growth was 2.0%. (Source:
RBC Economics Provincial
Outlook, December 2012).
Halifax Stanfield International Airport 2012 Economic Impact Report
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2 Study Approach 2.1 Introduction
This section outlines the approach used to calculate the impacts of HSIA
on HRM and Nova Scotia. These methods, and the terminology used in
the 1992 report and updates, are also summarized in this section.
2.2 Economic Impact
To establish a framework for measuring the economic impacts of Halifax
Stanfield, the following were defined:
The types of economic activity being considered.
The study area.
The units of measurement of economic impact used.
The methods used to measure or estimate economic impact.
The types of economic activity are grouped into three categories: direct,
indirect and induced.
Direct Economic Activity
This activity refers to airport-related activity of those firms or industries
for which aviation or airport activity is a portion of total business activity.
These businesses can be divided into three groups: those with primary
linkage to the airport (generally aviation-related); those with a secondary
linkage (generally not aviation-related); and the aerospace sector.
Primary linkage businesses or organizations include those listed below.
Many of the primary linkage businesses are located at Halifax Stanfield.
General Aviation: This refers to companies engaged in charter air
operations, corporate aviation operations and aviation-related
organizations or educational institutions.
Air Carriers: This refers to companies offering scheduled air
service within Nova Scotia (local), scheduled or charter air
service to other points in Atlantic Canada and Canada (regional
or national) or to transborder (U.S.) or international
destinations.
The economic activity at HSIA is calculated by direct, indirect and induced impacts.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Air Support Services: This refers to companies whose business is
primarily or wholly aviation-related, or who provide direct support to air
carriers or general aviation businesses. Air support services include:
Customs brokers, couriers or freight forwarders
Flight catering services
Fuelling services
Sales, rentals or aircraft leasing businesses
Parts and maintenance services
General services (such as fixed base operators)
Airport Operations and Administration: This category includes HIAA,
NavCanada, CATSA, Canada Border Services Agency, Public Health
Agency of Canada, RCMP (Airport Detachment), U.S. Customs and
Border Protection Services and other government functions that are
involved in the direct operation of the airport or which provide support
services at the airport. Excluded from the impact analysis are volunteers
at the Air Terminal Building.
Secondary linkage businesses include:
Commercial Services: These include aviation-related retail and personal
service businesses operating at Halifax Stanfield.
Ground Transportation: These include car rental, taxi and limousine
service, and bus transportation operations that service the airport. The
main offices for these businesses are both on-site and off-site.
Tourist/Travel/Hotel Industry: This group of secondary
linkage businesses includes travel agencies, tour operators,
hotels/motels, and other food and beverage operators who
provide service to passengers travelling by air for business
or pleasure.
Indirect Economic Activity
Direct economic activity is accompanied by indirect and
induced economic activity. Indirect economic activity refers
to activity generated in a sector that supplies raw materials
and other inputs to businesses associated with direct
economic activity (as listed above). Indirect activity occurs
as a result of direct activity. The terms "direct" and "indirect"
depend on the chosen reference point. Any inter-relationships between
the businesses included under the heading Direct Economic Activity and
those included under Indirect Economic Activity were taken into
consideration in the 1992 impact analysis and the updates.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Induced Economic Activity
Induced economic activity refers to that economic activity generated by
individuals employed in the direct or indirect activity sectors who spend a
portion of their household income on consumer goods.
Measures of indirect and induced activity show the effect that the direct
expenditures have as they “ripple” through the economy. The measure is
referred to as the multiplier effect or spinoff impacts.
2.3 Study Area
The total economic activity and impacts are defined for a specific
geographic area or regions. For the 2012 update, economic activity and
impacts are analyzed for the following regions:
Local Economy (Halifax Regional Municipality)
Regional Economy (Province of Nova Scotia)
2.4 Economic Impacts Measured and Methods of Measurement
Three measures of Halifax Stanfield’s economic impact on HRM and
Nova Scotia are defined as follows:
Economic Output or Gross Revenue: This measure is determined in
terms of total gross revenue from all airport-related activity, and those
same total gross revenues, less any revenue transferred from one
airport-related activity (primary or secondary) to another airport-related
activity.
Employment: This measure is defined as the total amount of full-time
equivalent (FTE) employment created by airport activity (excluding
volunteers).
Wages and Salaries: This measure is defined as the total amount of
wages and salaries created due to airport activity.
Direct, indirect and induced economic impacts associated with the above
three measures of economic activity were calculated as follows:
Direct Economic Impact: In terms of economic output, employment,
wages and salaries were obtained by means of surveys of the major
airport tenants. Current and past survey results and other data sources
were used to arrive at the final economic impact values.
Positive economic impacts are defined under economic output or gross revenue, employment, wages and salaries, retail sales, the aerospace cluster, construction activity and tourist expenditures.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Indirect and Induced Economic Impact: In terms of economic output,
employment, wages and salaries were estimated by means of economic
multipliers. The multipliers used in this report are the same as previous
updates.
In addition to the three measures, other economic impacts were
determined. ATB retail and concession sales, the aerospace cluster at
HSIA and the adjacent AeroTech Business Park, construction activity
and tourists accessing Nova Scotia at the airport were also identified.
These impacts are assessed separately and represent major
contributions to the economy of Nova Scotia.
The research methodology used by Nova Scotia Economic and Rural
Development and Tourism was applied to determine the jobs and payroll
impacts (direct and spin off) of tourists entering Nova Scotia through the
airport. Spinoff refers to indirect and induced impacts. This model also
isolated government taxes from these tourist expenditures. For the
aerospace cluster, the economic impact approaches used at other
aerospace concentrations in Canada and the U.S. were applied. This
approach provides a general indication of expected impacts and
maintains the confidentiality of the few large aerospace firms operating
around Halifax Stanfield.
2.5 Fiscal Impact
The fiscal impact measures include the following:
Personal Income Taxes: This measure refers to the personal income
taxes paid to the Province of Nova Scotia by individuals employed due to
airport activity. This impact was calculated from sources like Statistics
Canada’s financial management system.
Retail Sales Taxes: This measure refers
to retail sales taxes created by
purchases of retail goods and services
by individuals who earn wages and
salaries due to their employment
stemming from Halifax Stanfield activity.
In 2012, the HST rate in Nova Scotia
was 15% (5% federal part and 10%
provincial part).
Fiscal impacts are measured for the same study area and in a similar
fashion as economic impacts in terms of direct, indirect and induced
activity.
Fiscal impacts are defined under personal income taxes, retail sales taxes and municipal taxes. No impact multipliers (spinoffs) are applied to municipal taxes.
Halifax Stanfield International Airport 2012 Economic Impact Report
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3 Economic Impacts 3.1 Introduction
The data gathered from the 2012 survey were combined with other sources,
as outlined in Section 2, to develop updated estimates of total economic
impacts in terms of:
Economic Output
Employment
Wages and Salaries
For each type of economic impact indicator listed above, the data have been
used to estimate the economic impacts in HRM and Nova Scotia.
At the time of the survey program in mid-2012, over 100 firms were located
at HSIA. For each indicator of economic impact in the 1992 study, a sample
of organizations by type were surveyed. The figures derived from the
surveys, and used for this update, were scaled up to represent the full
impacts at the airport.
3.2 Economic Output
The first measure of
economic impact is
total economic output.
This measure is also
referred to as gross
revenue. Economic
impacts related to the
airport, in terms of
economic output for
HRM and Nova
Scotia, are
summarized in Exhibit
3.1. The economic impact is separated into direct, indirect and induced. The
direct effects are the same for both HRM and Nova Scotia because all direct
economic output takes place at the airport which is located in HRM.
Exhibit 3.1 shows that HSIA's total economic output for the economy of HRM
is $753 million. This is composed of $414 million in direct output, $111 million
in indirect output and $228 million in induced output.
Exhibit 3.1 further reveals that the airport's total economic output for the
Nova Scotia economy is $1.27 billion. This is comprised of $414 million in
direct output, $261 million in indirect output and $598 million in induced
output.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Exhibit 3.1 HALIFAX STANFIELD INTERNATIONAL AIRPORT –
GROSS OUTPUT (MILLIONS) IN 2012
Direct Indirect Induced Total Halifax Regional Municipality
$414.0
$111.0
$228.0
$753.0
Province of Nova Scotia
$414.0
$261.0
$598.0
$1,273.0
3.3 Employment
Employment is another measure of economic impact. It is defined as full-
time equivalent (FTE) jobs. The figures shown in Exhibit 3.2 are year-end
averages and not peaks, and they include estimated off-site and on-site
employment related to the airport.
Exhibit 3.2 presents the estimated total
employment impact of the airport on HRM. For
2012, 8,310 full-time equivalent direct and
spinoff jobs were created in HRM due to airport
activity. There were 240,000 FTE employed
people in HRM during 2012 so the airport
accounted for 3.5% of the total. Direct
employment from airport activity is estimated at
5,400 FTE jobs, indirect employment represents
1,290 FTE jobs and induced employment
accounts for another 1,620 FTE jobs. Total
employment was above 2011 levels because of
increased hiring in the aerospace sector and major passenger carriers. The
result is direct and spinoff employment increased by 210 FTE jobs.
Exhibit 3.2 also shows that the Nova Scotia-wide employment impact from
airport activity is estimated at 12,360 FTE jobs. The number of FTE
employed people in Nova Scotia in 2012 was 452,600 as Halifax Stanfield
accounted for 2.7% of the employment in Nova Scotia. The direct
employment created by the airport in Nova Scotia was 5,400 FTE jobs,
indirect employment was 2,970 FTE jobs, and induced employment was
3,990 FTE jobs.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Exhibit 3.2 HALIFAX STANFIELD INTERNATIONAL AIRPORT - EMPLOYMENT (FULL-TIME EQUIVALENT) IN 2012
Direct Indirect Induced Total Halifax Regional Municipality
5,400 1,290
1,620 8,310
Province of Nova Scotia 5,400 2,970
3,990 12,360
3.4 Wages and Salaries
Wages and salaries are another measure of economic impact. The direct
wages and salaries are based on the 1992 study and updated results.
Indirect and induced wages and salaries were determined by multiplying the
number of jobs in each category by the average annual Nova Scotia wage in
2012 ($41,064).
Exhibit 3.3 contains the wage and salary impact of the airport on HRM and
Nova Scotia in 2012. The total wages and salaries created by airport activity
in HRM amounts to $341.2 million. The direct wage and salary portion is
$221.7 million, the indirect impact is $53.0 million, and the induced impact is
$66.5 million.
Exhibit 3.3 also presents the total wage and salary impact of Halifax Stanfield
on Nova Scotia for 2012. This impact is $507.5 million.
Exhibit 3.3
HALIFAX STANFIELD INTERNATIONAL AIRPORT - WAGES AND SALARIES (MILLIONS) IN 2012
Direct Indirect Induced Total Halifax Regional Municipality
$221.7
$53.0
$66.5
$341.2
Province of Nova Scotia
$221.7
$122.0
$163.8
$507.5
Halifax Stanfield International Airport 2012 Economic Impact Report
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3.5 Renovation and New Construction Impact
Capital Improvements Since 2000
Since the 2000 transfer of the facility from Transport Canada, HIAA and
tenants have invested approximately $475 million in new capital
development projects and the maintenance of capital. These projects
represent over 70% of all capital improvements at airports in Atlantic
Canada, and reflects Halifax Stanfiled’s regional dominance in both the air
passenger and air cargo segments.
Using an average annual Nova Scotia construction wage of $39,065 for this
period, these projects generated 7,975 FTE jobs. The direct job portion of
this total is 4,865 FTE jobs. Capital projects contributed $300 million in
wages and salaries with the direct portion being $190 million.
To prepare for the next phase of capital development, HIAA completed an
updated Master Plan in 2011. HIAA’s planned future spending on capital
projects is listed below.
2013 - $53.6 million
2014 - $34.2 million
2015 - $49.7 million
2016 - $40.9 million
2017 - $35.1 million
2018 - $17.5 million
In 2012, HIAA spent $24.3 million on capital projects. For 2013 and future
years, an additional $276 million is expected to be spent on capital projects
by HIAA and tenants. These investments do not include all of the ‘Airport
City’ elements of the new Master Plan that could significantly increase future
capital spending. Applying the 2012 average Nova Scotia construction wage
of $47,780, future expenditures of $276 million will provide 3,790 FTE jobs
and $174 million in wages and salaries.
Halifax Stanfield International Airport 2012 Economic Impact Report
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3.6 Tourist/Visitors Impacts
Tourism is a major sector of the Nova Scotia economy. In 2012, there were
1,993,300 visitors to Nova Scotia. Of this total, 639,400 or 32.1% entered
Nova Scotia at Halifax Stanfield. Nova Scotia Economic and Rural
Development and Tourism has an economic impact model that calculates the
impacts of the tourism sector on the provincial economy. Outputs from this
model (2008 with estimates for 2012) show that tourism is a $2.02 billion
industry that generates 34,400 direct and spinoff jobs and provides $892
million in household income.
The air segment (domestic, transborder and international) in 2012 represents
32.1% of all visitors. Tourists who enter Nova Scotia at Halifax Stanfield
tend to stay longer and spend more money than other market segments.
Data from the comprehensive report, 2010 Nova Scotia Visitor Exit Survey,
Corporate Research Associates (September 2011) shows that tourists
accessing Nova Scotia at the airport spent $1,432 per party versus the
average of $1,052, stayed longer (6.9 nights versus 5.1 nights) and had a
smaller average party size (1.8 versus 2.1).
Tourists who entered Nova Scotia at HSIA in 2012 contributed an estimated
$882 million towards Nova Scotia’s tourism revenues and $581 million
towards gross domestic product. They also generated an estimated 15,030
direct and spinoff jobs with $390 million in direct and spinoff household
income. The Province of Nova Scotia and the Government of Canada also
benefited from $114 million in new taxes.
Exhibit 3.4
HALIFAX STANFIELD INTERNATIONAL AIRPORT - ECONOMIC IMPACT OF AIR TRAVELERS ENTERING NOVA SCOTIA IN 2012
Indicator
Total – All Tourists
Tourists Entering
Nova Scotia At HSIA Tourism Revenues
$2.02 billion
$882 million
Gross Domestic Product
$1.33 billion
$581 million
Jobs: Direct and Spinoff
34,400
15,030
Household Income: Direct and Spinoff
$892 million
$390 million
Total Taxes: Provincial and Federal
$261 million
$114 million
Sources: Chris Lowe Group estimates based upon 2008 to 2012 tourism industry data, 2010 Nova Scotia Visitor Exit Survey, and Tourism Economic Impact Model, Nova Scotia Economic and Rural Development and Tourism.
Halifax Stanfield International Airport 2012 Economic Impact Report
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3.7 ATB Retail Sales Impacts
HIAA collects data on gross sales for
retailers in the ATB and other
concessions. As outlined in Exhibit 1.6,
these sales in 2012 approached $80.5
million. Sales have increased over the
past decade due to increased visitor
traffic and the ATB Centre Core Retail
Expansion Project (Airport Square),
which expanded the retail base.
3.8 Aerospace Cluster Impacts
IMP Aerospace and tenants at the adjacent AeroTech Business Park
comprise an aerospace cluster with an estimated 1,450 employees in
2011/12.
According to the Aerospace Industries Association of Canada (AIAC), in
2012 this sector had $27 billion in revenues and created 170,000 direct and
spinoff jobs across Canada. Exports make up nearly 80% of revenues.
Aerospace is concentrated in Quebec and Ontario as these two provinces in
2012 had 60% and 27% respectively of manufacturing. Atlantic Canada was
the fastest growing region in recent years with 5% of manufacturing and 11%
of maintenance, repair and operations (MRO) in 2012.
Applying the approaches used by AIAC, the U.S. Department of Commerce,
the U.S. Aerospace Industries Association and the University of Manitoba’s
Transport Institute, general impacts of the local aerospace cluster were
estimated. These estimates rely upon secondary sources and industry-wide
norms. Applying the above sources and information on local aerospace
firms, the local sector had estimated expenditures of $420 million in 2011/12.
The direct and spinoff jobs are estimated at 2,900, and wages and salaries
at $164 million. A portion of these positive impacts is included in the
economic and fiscal impacts for the airport.
Halifax Stanfield International Airport 2012 Economic Impact Report
40
Exhibit 3.5
AEROSPACE CLUSTER - GENERAL ESTIMATE OF 2011/12 ECONOMIC IMPACTS
Indicator Direct Total (Direct & Spinoff) Expenditures
$230 million
$420 million
Employment (FTE)
1,450
2,900
Labour Income
$923 million
$164 million
Sources – Chris Lowe Group estimates based upon Canadian Aerospace Industry Performance 2012, Aerospace Industries Association of Canada; U.S. Bureau of Labor Statistics; U.S. Aerospace Industries Association estimates (2007); Economic Impact Study of Southport Aerospace, The University of Manitoba Transport Institute, 2006.
Halifax Stanfield International Airport 2012 Economic Impact Report
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4 Fiscal Impacts 4.1 Introduction
The 1992 survey and updates are the primary sources for estimating the
fiscal impact of the airport on HRM and Nova Scotia during 2012. Statistics
Canada and Nova Scotia Department of Finance data were also used.
These sources were drawn upon to estimate fiscal impacts from:
Personal and Consumption Taxes (Provincial)
Retail Sales Taxes
4.2 Personal and Consumption Taxes (Provincial)
The percentage of wages and salaries paid to the Province of Nova Scotia
was calculated using estimates of the personal income and consumption
taxes (provincial) created due to airport activity. According to the Nova
Scotia Department of Finance, in the range of 12% of total Nova Scotia
personal income goes to personal income and consumption taxes. By
multiplying this average personal income tax rate by the wages and salaries
listed in Section 3, the personal income tax impacts on the Province of Nova
Scotia were calculated.
Exhibit 4.1 summarizes the 2012 personal income and consumption tax
impacts of Halifax Stanfield activity within HRM and across the Province of
Nova Scotia. The total personal income and consumption taxes resulting
from airport activity in HRM amounts to $41.0 million. This consists of $26.6
million in direct personal income and consumption taxes, $6.4 million in
indirect taxes and $8.0 million in induced taxes. The exhibit also shows that
the total personal income and consumption taxes created by airport activity
on the Province of Nova Scotia amounts to $60.9 million.
Exhibit 4.1 HALIFAX STANFIELD INTERNATIONAL AIRPORT -
PERSONAL INCOME & CONSUMPTION TAXES (MILLIONS) IN 2012
Direct Indirect Induced Total
Halifax Regional Municipality
$26.6
$6.4
$8.0
$41.0
Province of Nova Scotia
$26.6
$14.6
$19.7
$60.9
Halifax Stanfield International Airport 2012 Economic Impact Report
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4.3 Retail Sales Tax (HST)
Another fiscal impact measure of HSIA activity is sales taxes generated by
the purchase of retail goods by those who are employed due to airport
activity.
In the range of 35% of personal income is spent on retail trade goods and
services. By multiplying the wages and salaries from Section 3 times this
value, the amount of retail sales generated by airport activity is determined.
By multiplying this figure by the HST rate, the retail sales tax impact of airport
activity can be isolated. The 2012 rate in Nova Scotia was 15% (5% federal
part and 10% provincial part).
Exhibit 4.2 lists the retail sales tax impact of airport activity on HRM and
Nova Scotia. This exhibit shows that $17.9 million in retail sales taxes were
created due to airport activity in HRM. Province-wide, $26.6 million in retail
sales taxes were generated due to airport activities.
Exhibit 4.2 HALIFAX STANFIELD INTERNATIONAL AIRPORT - RETAIL SALES (HST) TAXES (MILLIONS) IN 2012
Direct Indirect Induced Total Halifax Regional Municipality
$11.6
$2.8
$3.5
$17.9
Province of Nova Scotia
$11.6
$6.4
$8.6
$26.6
4.4 Commercial Property and Business Occupancy Taxes
In 2012, the total value of taxes paid to HRM was $4,008,039 or an increase
of 4.4% from 2011. Of this total, $2,600,035 was paid by tenants and the
remaining $1,408,004 by HIAA.
Halifax Stanfield International Airport 2012 Economic Impact Report
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5 Conclusions In 2012, HSIA served a record 3,605,701 passengers or over half of all air
travel passengers in Atlantic Canada. It has a multi-province catchment area
and functions as a major economic and employment generator for Halifax
Regional Municipality (HRM) and Nova Scotia. Halifax Stanfield provided
direct and connecting passenger and cargo service for 18 passenger carriers
and 13 cargo carriers to destinations in Canada, the United States, the
Caribbean and Europe.
The global recession that hit the airline industry in mid-2008 was severe with
operating cash flows not returning to pre-recession levels until late 2010. In
2012, Nova Scotia’s gross domestic product (GDP) increased by 0.9%
following growth of 0.5% in 2011. Growth was also slow in the remainder of
Atlantic Canada in 2012 and Canada-wide growth was a modest 2.0%.
Against this economic setting, 2012 was still a year of accomplishments,
which included more international awards and the substantial completion of a
major runway extension program. These achievements occurred against a
backdrop of carriers shifting capacity in the second half of 2012 from Eastern
Canada to Western Canada or other markets.
The 2011 global Airport Service Quality (ASQ) ratings were released in 2012.
For 2011, Halifax Stanfield was ranked as the third best in the world for
overall passenger satisfaction in its class (under five million passengers) and
placed third in North America. To date, Halifax Stanfield has earned a total of
28 service quality awards.
HSIA has also been inducted into Airports Council International’s Director
General’s Roll of Excellence, honouring airports that have ranked among the
top five airports in the world for five consecutive years in the Airport Service
Quality ratings. The facility has also been re-certified as ASQ Assured. This
distinction has been earned by just 12 airports world-wide.
HIAA also created a new airport service culture program in 2012, branded
“The Stanfield Way”. The program stresses the over-arching purpose of all
airport employees, regardless of role, to serve every airport visitor. It is
expected that all airport employees will have had an opportunity to
participate in this program by the end of 2016.
In February 2011, the Federal Government and the Province of Nova Scotia
announced a joint investment of up to $14 million towards the extension of
the main Runway (05/23) from 8,800 feet to 10,500 feet to accommodate
larger wide bodied and heavy weight aircraft with the balance being invested
by HIAA. Construction work started in late 2011 and the expanded runway
was fully operational on November 15, 2012.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Cargo growth is a key strategy of Halifax Stanfield as the runway extension
now allows wide-body cargo freighters to operate at full capacity with the
resulting benefits to all exporters; particularly seafood exporters. The runway
extension further supports the multi-tenant cargo facility that opened in June
2010. The facility is operated by Gateway Facilities ULC and contains
40,000 square foot state-of-the-art cargo space that includes 7,000 square
feet of climate controlled space. It is the largest airside refrigerated space
north of Miami and enables the efficient export of high-value seafood.
In October 2011, Groupe Germain Hospitality announced plans to build a
$30.5 million onsite boutique hotel. It opened in 2013 under the ALT Hotel
brand. The facility includes 169 rooms and 6,775 square feet for business
meetings and gatherings. During 2012, $18 million was spent on the
project’s construction.
The 2010 Master Plan outlines a 20-year development program for the
airport lands. A key element is the planning and development of an ‘Airport
City’ that will transform HSIA’s highway showcase location and regional air
hub amenities. In 2012, HIAA released land use plans and concepts for
groundside lands that focus on creating a gateway destination that could
support over 750,000 square feet of new office, convenience, destination
retail and other space.
In 2012, HIAA updated its 5-Year Strategic Plan. The new Strategic Plan
includes an updated mission and vision statement, values and goals, and an
assessment of the general economic conditions likely to occur over the life of
the plan. In addition, it provides an evaluation of current and future
conditions of the aviation industry.
HIAA retained an A+ credit rating from Standard & Poor’s (second highest
among Canadian airport authorities) in 2012. In the fiscal year, HIAA
generated revenues of $79.3 million and ended the year with a surplus that
is retained and reinvested in operations and development. HIAA also
invested $24.3 million in its capital improvement program in 2012.
HSIA’s diversified tenant base and head office functions of IMP Group
Aerospace and Air Canada Jazz have contributed to overall airport-related
employment to grow from 2011 to 2012. The major contributor to the
airport’s economic base is IMP Group with many of this firm’s employees
involved in multi-year civilian or military service contracts.
In 2012, HSIA contributed $1.27 billion to the Nova Scotia economy and
provided 12,360 full-time equivalent (FTE) jobs with wages and salaries of
$507.5 million. These employees contributed $60.9 million to the Province of
Nova Scotia in terms of personal and consumption taxes and $26.6 million in
retail sales taxes.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Beyond the economic and fiscal impacts listed in the following exhibit,
renovation and new construction projects, tourists entering Nova Scotia at
HSIA and a cluster of aerospace businesses that includes the adjacent
AeroTech Business Park provide further positive local and provincial
spinoffs.
From 2000 to 2012, HIAA and tenants have invested approximately $475
million in new capital development projects and the maintenance of capital.
These projects represent over 70% of the total capital improvements at all
airports in Atlantic Canada and created 7,975 FTE jobs and contributed $300
million in wages and salaries. HIAA’s Capital Plan to 2018, completion of the
new ALT 169 room boutique hotel and other expected future tenant projects,
will require an additional $276 million in investments. These planned
projects will require 3,790 FTE jobs and generate $174 million in wages and
salaries.
Tourism is a $2.02 billion industry in Nova Scotia based upon the most
recent provincial government statistics. There were 1.993 million visitors to
Nova Scotia in 2012 with 32% arriving via air at HSIA. Tourists entering
Nova Scotia at Halifax Stanfield tend to stay longer and spend more money.
They contributed an estimated $882 million to the Nova Scotia economy and
accounted for 15,030 jobs (direct and spinoff), $114 million in total taxes and
$390 million in payroll.
IMP Aerospace and tenants at the adjacent AeroTech Business Park are an
aerospace cluster with an estimated 1,450 employees in 2011/12. This
cluster has estimated direct and spinoff expenditures of $420 million. The
direct and spinoff jobs are 2,900, and wages and salaries are approaching
$165 million.
Halifax Stanfield International Airport 2012 Economic Impact Report
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Exhibit 5.1 COMPARISON IMPACT OF
HALIFAX STANFIELD INTERNATIONAL AIRPORT 2000 - 2012
Impact
2000
2005
2012
% Change:
2005 to 2012
Total Gross Output Halifax Area Nova Scotia
(Millions)
$614.1 $1,035.1
(Millions)
$683.3 $1,152.8
(Millions)
$753.0 $1,273.0
+10.2% +10.4%
Total Employment Halifax Area Nova Scotia
7,495 11,000
7,870 11,625
8,310 12,360
+5.6% +6.3%
Wages and Salaries Halifax Area Nova Scotia
(Millions)
$196.7 $289.2
(Millions)
$260.3 $384.6
(Millions)
$341.2 $507.5
+31.1% +32.0%
Personal and Consumption Taxes (NS) Halifax Area Nova Scotia
(Millions)
$29.7 $43.7
(Millions)
$35.1 $53.5
(Millions)
$41.0 $60.9
+16.8% +13.8%
Retail Sales Tax Halifax Area Nova Scotia
(Millions)
$10.2 $15.0
(Millions)
$13.7 $20.2
(Millions)
$17.9 $26.6
See Note
Note: Comparisons cannot be made because of changing tax definitions and rates.
Halifax Stanfield International 2012 Airport Economic Impact Report Prepared For: Halifax International Airport Authority Prepared By: Chris Lowe Planning & Management Group
September 2013