Canada's airports added $19 billion to national GDP in 2016

22 May 2018

The Canadian Airports Council has released an economic impact study conducted by consultancy InterVISTAS on the airport industry in Canada. According to the study, Canadian airports directly account for 194,000 jobs, $13 billion in wages, $19 billion in GDP, and $48 billion in economic output.

In a country of vast distances and population centres separated by multiple time zones and thousands of kilometres, the importance of airport infrastructure cannot be overstated. While railways initially linked the far-flung parts of Canada, airplanes have become the new transportation lifeblood of long-distance travelers – going into, across, and out of the country. Airports are likewise integral to the movement of goods – especially when they need to get somewhere fast – though air shipment can be more costly than slower avenues like trucking, ships, and trains.

The Canadian Airports Council – the federal representative of most airports in the country – wants people to know just how important they are to the national economy. Last month, the CAC released an economic impact study it commissioned from global consultancy InterVISTAS, which specializes in aviation, transportation, and tourism. InterVISTAS started as the consulting subsidiary of the Vancouver International Airport Authority in 1997, before being bought by its employees two years later. InterVISTAS was acquired by Dutch consultancy DHV Group in 2012; it has offices in Canada, the US, UK, Netherlands, and Brazil.Air passenger trafficThe consulting firm’s report highlights that Canada’s airports are a growing and thriving sector. Air passenger traffic in the country has increased from 66 million enplaned/deplaned passengers in 1988 to 140 million in 2016. This is a 112% increase in 28 years, or a compound annual growth rate (CAGR) of 3%. There has been a steady increase in the enplaning/deplaning of domestic, transborder, and international flight passengers.

While air passenger traffic has increased immensely, the increase in annual aircraft movements has been more modest. The number of aircraft movements rose from 1.9 million in 1999 to 2.1 million in 2016 – an increase of 10%. This can be explained by the fact that larger aircraft with more seats and higher load factors have allowed air passenger volume to grow tremendously while total aircraft movements have stayed relatively flat. Indeed, the average number of passengers per aircraft has increased from 45 in 1999, to 67 in 2016 – an increase of nearly 50%.Total impact of Canada’s airportsInterVISTAS conducted the economic impact study using data from 2016, examining the impact of airports in terms of jobs, wages, GDP, and economic output. In terms of direct impact on jobs – which covers the employment base at airports, including airline employees, aircraft maintenance, ground handling, customer service, airport authority staff, etc. – airports support 194,000 jobs. Directly, airports account for 21% of Canada’s transportation and warehousing sector, and 26% of the sector’s GDP.

Indirectly – which covers employment in downstream industries arising from the direct operational activities of airports – Canada’s airports support 99,000 jobs. An example of indirect jobs would be food wholesalers who supply food for in-flight meals.

Airports also create 62,000 jobs in terms of induced economic impact. Induced impact – also known as ‘household-spending effect’ – comes from the expenditures of people employed directly or indirectly by airports. For example, if an airline employee decides to renovate their house, this would result in induced employment hours in the construction industry.Direct Impact of Canada’s AirportsDirectly, airports create $13 billion in wages, with an additional $6 billion in indirect employment wages, and $3 billion in induced wages. Airports also contribute heavily to Gross Domestic Product (GDP) – the market value of all final goods and service produced in a country. Airports directly contribute $19 billion to Canada’s GDP, with an overall contribution of $35 billion.

Economic output – also known as economic activity – is the gross dollar value of all industrial output. It is similar to GDP, except that it includes the value of intermediate inputs, thus making the figure a deal larger. In 2016, airports directly accounted for $48 billion in economic output, while indirectly creating $20 billion, and inducing a further $11 billion.Taxation impact of Canada airportsAdditionally, the airport industry has a further ‘catalytic’ impact on the economy, facilitating the business of other sectors, like tourism. The connectivity provided by airports helps facilitate trade and investment, and contributes to the growth of the economy. Air infrastructure helps the Canadian economy chug along, moving people and goods – from European tourists to Nova Scotian lobsters.

The report also notes that airports are important generators of taxes for all levels of government. In 2016, airport employers and employees paid $6.9 billion in taxes. Indeed, taxes account for 54% of direct wages paid in the industry. 70% of taxes went to the federal government, while 24% went to provincial/territorial governments, and 6% went to municipalities.

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CAA recommends eight ways to reduce traffic congestion in Canada

31 May 2018

The Canadian Automobile Association (CAA) has a released a report commissioned from transportation consulting firm CPCS examining Canada’s traffic congestion problem. The report recommends eight policy tools – from traffic management systems to tolls – to help reduce the bottlenecks in Canadian cities.

Traffic and road congestion is a regular part of most people’s commutes in the Canada’s urban centres. Traffic bottlenecks in Canada’s cities can increase commute times by 50%, and three of Canada’s bottlenecks are among the worst in North America – rivalling those in New York and LA.

The Canadian Automobile Association, an advocate for Canada’s motorists, has released a report it commissioned from CPCS – a Canada-based international transportation consulting firm. The report examines best practices to help relieve traffic congestion in the country. CPCS highlights 8 congestion reduction tools used internationally, and sometimes within Canada, that could be expanded and intensified in the country to help deal with commuter gridlock.

One method is the use traffic management systems (TMS) like ‘smart’ traffic signals and variable speed limits to improve traffic flow and safety. Improved traffic signals detect traffic patterns and adjust timing to reduce delays. Colorado installed adaptive signal control systems on a stretch of highway intersections and found a decrease in travel times of between 6-19%. Meanwhile, freeways in Minneapolis have instituted ramp flow controls that have significantly reduced travel times, aided traffic flow, and reduced collisions.

Variable speed limits (VSL) are another useful traffic management system. Basically, VSL reduce posted speed limits when traffic congestion is imminent. The system is used on many autobahns in Germany, seeing travel times reduced by 5-15% and collisions reduced by 30%. British Colombia currently uses VSL on three highways, and Edmonton is looking to implement it soon.8 tools to help reduce traffic congestionTraffic incident management (TIM) is another lower-cost method of reducing congestion. TIM is a planned approach to dealing with collisions quickly and restoring traffic flow. One part is the use of Freeway Service patrols with specially-equipped vehicles to help clear incidents quickly and safely. For example, Florida Road Rangers typically respond within 15-30 minutes, and generate $6.70 in economic benefits for every dollar spent.

Even simple TIM measures like the use of incident screens to block motorists’ view of accidents can be beneficial – reducing ‘rubbernecking’ that slows traffic and sometimes causes additional collisions. The UK Highways Agency reports that the average economic benefit of using screens is $300,000 per incident.

Ridesharing and carpooling is another oft-trumpeted way to reduce congestion. Stats Canada estimates that 83% of commutes in cars were done alone in 2011, which means most Canadians find it a hassle or don’t do it for any number of other reasons. However, CPCS finds hope in the technological advances of ridesharing and changing preferences of commuters, which has the potential to significantly increase carpooling rates. The emergence of autonomous vehicles also has the potential to reduce the economic cost of ridesharing and carpooling.

Investments in urban public transit is a good way to improve traffic flow, though the CAA-commissioned report specifically focuses on better integrating ridesharing into public transit. In smaller towns like Innisfil, ON, the municipality has collaborated with Uber to provide on-demand ridesharing services – subsidizing flat rate fares from local transit hubs and pooling riders heading in the same direction.

Congestion charges are another effective way to alter behaviour, reduce traffic, and finance further infrastructure investment. Though unpopular with most motorists, tolls ultimately get more cars off the road, leaving the people who are willing to swallow the additional cost of driving. In a popular example, London instituted a cordon charge in 2003 (currently $20) for driving within central London. Traffic levels have declined while transit use has risen since the implementation.Active Transportation Commuting in Major Canadian CitiesCanada can also invest more in getting people to walk or bike to work. Obviously, this involves living within a certain distance of people’s place of employment, but for living and working in urban centres, biking can definitely be made a more attractive proposition with better infrastructure – like in cycling-friendly cities like Copenhagen and Amsterdam. If you have to fight with trucks for space on a city road, cycling becomes a less attractive transportation method.

Currently only 1.3% of commutes in Canada are made by bike, while 5.7% walk to work. The share of commuters using ‘active’ transportation ranges from 4% in Canada’s Motor City of Oshawa, Ontario, to 16% in Victoria, BC. Ottawa has the highest share of ‘active’ commuters in a major urban centre, at 9%. The report argues that separated bike lanes are a low-cost way to entice more commuters to bike (at least in the non-winter months). Separated lanes greatly reduce the risk of bicycle accidents – by up to 31%, according to studies done in Montreal and Toronto. In the German cities of Munich, Berlin, and Hamburg, expanded bike infrastructure has helped boost bike trips (from 10 to 17%) and reduce car trips (41% to 33%) between 2002 and 2011.

Changing driver behaviour can also help reduce the collisions which greatly increase congestion. Useful tools include awareness campaigns on smartphone use, as well as emerging in-car tech that helps preventing distracted driving and other unsafe driving behaviour. With the roll-out of automated cars in the coming years, though, it may all be a moot point – the only question is how soon.

The last tool proposed by the report is improved infrastructure. With the advent of automated cars and their inherent ability to make traffic flow more smoothly, it is tougher to predict how much infrastructure will be required in the future. In this uncertain environment, big road projects become more risky, but lower-cost bottleneck elimination projects like auxiliary lanes, ramp metering, and widening ramps can still make an impact in reducing traffic delays. Roundabouts are another method to reduce collisions and improve flow – a study in the US found they reduce delays at rush hour by 83%, and can drop congestion by 58%.