Economic Impact Study

Halifax Summit - Infrastructure

March 28, 1995

Prepared by Nova Scotia Department of Finance, Economic Policy and Analysis Division for Provincial G-7 Summit Committee.

Project Outline

In June 1995 the G-7 Summit will be hosted in Halifax. To prepare for the event several infrastructure projects are being undertaken by the City of Halifax, the City of Dartmouth, the Province of Nova Scotia and the Government of Canada. An impact assessment was performed on the total publicly funded infrastructure spending associated with the Halifax Summit.

Data Source

Data were obtained from an Intergovernmental Affairs memorandum dated March 20, 1995 regarding Halifax Summit - Infrastructure.

Methodology

A simple impact simulation was performed on total publicly funded infrastructure spending estimated at $8.4 million using the Nova Scotia Input-Output System. Projects were classified as Repair Construction, Non-Residential (New) Construction or Road, Highway and Bridge Construction. Direct employment was calculated from the Household Receipts component of the Total Direct Purchases of the Direct Effects of Initial Changes in Output Table using an estimated average 1995 Nova Scotia construction wage. Spinoff employment was derived using estimated annual 1995 average wage.

Assumptions

  1. Costs and impacts are expressed in 1995 constant dollars.
  2. The Province's assistance with the cost of the modular stage for the Nova Scotia Tattoo Foundation is considered to be part of infrastructure spending since the hosting of the G-7 Summit made the expenditure necessary.

Economic Impacts

Economic impacts are divided into direct , spinoff and total impacts. Direct impacts are impacts that occur directly because of the capital phase of these projects (i.e., purchase of supplies and labour). Spinoff impacts are the sum of indirect impacts (interindustry impacts) and induced impacts (impacts caused by household spending). Total impacts are the sum of direct and spinoff impacts.

The impacts are reported for Household Income, Employment and Provincial Government Revenue. Household income includes wages and salaries and benefits. Employment is expressed in person-years and Provincial Government Revenue is comprised of personal income and consumption (sales) taxes and taxes on business inputs. It does not include corporate income tax. 

     Economic Impacts of Infrastructure Projects for the Halifax Summit

                                          Direct  Spinoff  Total

          Household Income                   2.4      2.5    4.9
          (millions 95$)

          Employment                          70       90    160
          (person-years)

          Provincial Government Revenue      0.3      0.6    0.9
          (millions 95$)
These impacts are based on an infrastructure expenditure of approximately $8.4 million. The employment, particularly for the direct impacts, will not match the number of jobs created. A person year is defined as 2,000 person-hours (50 40-hour weeks) but the jobs created by the infrastructure program will provide substantially fewer hours since many of the construction jobs will be less than three-month's duration.