Economic Impact Studies
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Northern Ontario Aquaculture Association
In October 2006, the Northern Ontario Aquaculture Association
(NOAA) initiated a study to examine the economic impacts of the cage
culture industry in Ontario. A key objective of the study was to
measure the economic impact of the cage culture industry through an
analysis of direct and indirect economic benefits to the local and
provincial economy.
The direct economic impacts (sales and jobs) associated with the
Ontario cage culture industry were identified through a review of
secondary data and key informant interviews with cage culture
operators while the indirect economic impacts (sales and jobs) were
identified through a survey of 'aqua-related' businesses that provide
goods and services to the culture operators. Unlike forestry, mining
and agriculture, the aquaculture industry is a relatively new economic
sector in Ontario. Lake based cage culture operations were
established in the mid-late 1980's and have since come to represent
the dominant production system in Ontario in terms of total fish
production. Rainbow trout is the main fish species produced by the
7-8 cage culture operators in Ontario with most of these operations
located in northern Lake Huron. The cage culture industry makes an
important contribution to community and regional economies in
Ontario. In terms of direct benefits, Ontario cage culture operators
produced a total of 3,275 tonnes of rainbow trout in 2005 which had a
total farm gate value of $12.5 million. The total employment
associated with this production activity amounted to 50 full-time
equivalent jobs.
With respect to the indirect impacts, cage culture industry linkages
with local and regional suppliers of goods and services generate
significant economic benefits across a range of industry sectors
including manufacturing, retail and wholesale trade, construction,
transportation, and business services. The results from this study
indicated that these businesses generated an estimated $38.2 million in
cage culture related sales and sustained a total of 179 full-time
equivalent jobs. Collectively, cage culture operators and the
businesses they deal with generated a total of almost $51 million in
sales and supported 229 full-time jobs. This includes a substantial
number of jobs in the value added sector with two major processing
facilities located in Ontario.
The study determined that the cage culture industry sustains
employment in numerous Northern Ontario communities including Little
Current, Espanola, Manitowaning, Kagawong, Gore Bay, Mindemoya,
Evansville, Val Caron, Parry sound , Sudbury and North Bay. The bulk
of this employment activity is linked to service, cage fabrication and
maintenance supplies and service, construction/building materials, and
processing. All of the cage culture production jobs and at least 30%
of the indirect jobs related to cage culture production are located in
Northern Ontario.
The cage culture industry is also providing employment in a number of
communities in Southern Ontario including Hanover, Fergus, Guelph,
Kitchener, New Hamburg, St. Thomas, Woodstock, Holland Centre,
Dunnville, Embro, Elmira, New Dundee, Shelbourne, Coburg and
Toronto. The bulk of this employment activity is linked to businesses
that are providing fish feed supplies, fingerlings and processing.
The Ontario cage culture industry also sustains a small number of jobs
in the Atlantic provinces where several fish feed suppliers and netting
and rigging suppliers are based.
The economic multipliers associated with the Ontario cage culture
industry are substantial. The study determined that the cage culture
industry has an employment multiplier of 4.5 and a sales expenditure
multiplier of 4. These multipliers suggest that every job in cage culture
production sustains an additional 3.5 jobs in the wider economy while
every dollar in farm gate sales generates an additional 3 dollars in the
wider economy. Using slightly more conservative multipliers and
assuming a 10% annual increase in production it is estimated that the
Ontario cage culture industry could be producing as much as 8,400
tonnes of rainbow trout in 10 years. The direct on-farm employment
associated with this production would amount to approximately 130
full-time equivalent jobs with a further 389 full-time indirect jobs
sustained in the wider economy. In terms of sales, the total annual
farm gate receipts at the end of the 10th year of production would
amount to almost $34 million with a further $84 million in indirect sales
related to businesses that deal with cage culture operations.
Cage culture operators and the businesses they deal with identified a
number of industry strengths. A key strength relates to the experience
and resourcefulness of the cage culture operators and industry
stakeholders who helped build the industry from the ground up over a
short span of 20 years. The commitment of operators to engage and
take the lead in science based research and development initiatives
was also cited as an important feature of the industry. Operators are
passionate about seeing the industry succeed and believe the industry
has considerable potential for future expansion. Aqua-related
businesses strongly support the expansion of the cage culture industry
and believe Ontario has substantial bodies of fresh water to
accommodate further growth. Industry stakeholders also recognize
the importance of the industry in supporting small businesses in
Northern Ontario and providing stable employment in rural
communities.
In terms of challenges, the key issue as identified by cage culture
operators and the businesses they deal with is the lack of functional
government regulations and guidelines which is preventing cage
culture operations from expanding existing sites and accessing new
sites. With the Ontario cage culture industry being "held back"
operators believe that competitors from other regions of Canada and
international producers are gaining a competitive advantage.
There is also concern that regulatory bodies are being misinformed
and influenced by special interest groups such as environmental
activists. Industry stakeholders would like to see objective science
based regulations as the only standard used for determining policy and
guidelines. Cage culture production represents a first generation
industry in Ontario and operators feel they have not been adequately
recognized for the substantial work and research they have
undertaken to establish the industry over the last 20 years while
complying with all of the regulations.
This study has found that the cage culture industry in Ontario
produces important economic benefits for rural communities across
Ontario including many communities in Northern Ontario. The industry
is productive and entrepreneurial. It has also demonstrated its ability
to diversify local economies and provide stable employment. The
industry has even grater future economic potential for Ontario and the
province possesses considerable freshwater resources for supporting
the expansion of the industry. For the cage culture industry to thrive
and maintain its economic viability, regulatory agencies will need to
make a strategic commitment to address institutional barriers and
enable its future growth.
Read more....
(NOAA) initiated a study to examine the economic impacts of the cage
culture industry in Ontario. A key objective of the study was to
measure the economic impact of the cage culture industry through an
analysis of direct and indirect economic benefits to the local and
provincial economy.
The direct economic impacts (sales and jobs) associated with the
Ontario cage culture industry were identified through a review of
secondary data and key informant interviews with cage culture
operators while the indirect economic impacts (sales and jobs) were
identified through a survey of 'aqua-related' businesses that provide
goods and services to the culture operators. Unlike forestry, mining
and agriculture, the aquaculture industry is a relatively new economic
sector in Ontario. Lake based cage culture operations were
established in the mid-late 1980's and have since come to represent
the dominant production system in Ontario in terms of total fish
production. Rainbow trout is the main fish species produced by the
7-8 cage culture operators in Ontario with most of these operations
located in northern Lake Huron. The cage culture industry makes an
important contribution to community and regional economies in
Ontario. In terms of direct benefits, Ontario cage culture operators
produced a total of 3,275 tonnes of rainbow trout in 2005 which had a
total farm gate value of $12.5 million. The total employment
associated with this production activity amounted to 50 full-time
equivalent jobs.
With respect to the indirect impacts, cage culture industry linkages
with local and regional suppliers of goods and services generate
significant economic benefits across a range of industry sectors
including manufacturing, retail and wholesale trade, construction,
transportation, and business services. The results from this study
indicated that these businesses generated an estimated $38.2 million in
cage culture related sales and sustained a total of 179 full-time
equivalent jobs. Collectively, cage culture operators and the
businesses they deal with generated a total of almost $51 million in
sales and supported 229 full-time jobs. This includes a substantial
number of jobs in the value added sector with two major processing
facilities located in Ontario.
The study determined that the cage culture industry sustains
employment in numerous Northern Ontario communities including Little
Current, Espanola, Manitowaning, Kagawong, Gore Bay, Mindemoya,
Evansville, Val Caron, Parry sound , Sudbury and North Bay. The bulk
of this employment activity is linked to service, cage fabrication and
maintenance supplies and service, construction/building materials, and
processing. All of the cage culture production jobs and at least 30%
of the indirect jobs related to cage culture production are located in
Northern Ontario.
The cage culture industry is also providing employment in a number of
communities in Southern Ontario including Hanover, Fergus, Guelph,
Kitchener, New Hamburg, St. Thomas, Woodstock, Holland Centre,
Dunnville, Embro, Elmira, New Dundee, Shelbourne, Coburg and
Toronto. The bulk of this employment activity is linked to businesses
that are providing fish feed supplies, fingerlings and processing.
The Ontario cage culture industry also sustains a small number of jobs
in the Atlantic provinces where several fish feed suppliers and netting
and rigging suppliers are based.
The economic multipliers associated with the Ontario cage culture
industry are substantial. The study determined that the cage culture
industry has an employment multiplier of 4.5 and a sales expenditure
multiplier of 4. These multipliers suggest that every job in cage culture
production sustains an additional 3.5 jobs in the wider economy while
every dollar in farm gate sales generates an additional 3 dollars in the
wider economy. Using slightly more conservative multipliers and
assuming a 10% annual increase in production it is estimated that the
Ontario cage culture industry could be producing as much as 8,400
tonnes of rainbow trout in 10 years. The direct on-farm employment
associated with this production would amount to approximately 130
full-time equivalent jobs with a further 389 full-time indirect jobs
sustained in the wider economy. In terms of sales, the total annual
farm gate receipts at the end of the 10th year of production would
amount to almost $34 million with a further $84 million in indirect sales
related to businesses that deal with cage culture operations.
Cage culture operators and the businesses they deal with identified a
number of industry strengths. A key strength relates to the experience
and resourcefulness of the cage culture operators and industry
stakeholders who helped build the industry from the ground up over a
short span of 20 years. The commitment of operators to engage and
take the lead in science based research and development initiatives
was also cited as an important feature of the industry. Operators are
passionate about seeing the industry succeed and believe the industry
has considerable potential for future expansion. Aqua-related
businesses strongly support the expansion of the cage culture industry
and believe Ontario has substantial bodies of fresh water to
accommodate further growth. Industry stakeholders also recognize
the importance of the industry in supporting small businesses in
Northern Ontario and providing stable employment in rural
communities.
In terms of challenges, the key issue as identified by cage culture
operators and the businesses they deal with is the lack of functional
government regulations and guidelines which is preventing cage
culture operations from expanding existing sites and accessing new
sites. With the Ontario cage culture industry being "held back"
operators believe that competitors from other regions of Canada and
international producers are gaining a competitive advantage.
There is also concern that regulatory bodies are being misinformed
and influenced by special interest groups such as environmental
activists. Industry stakeholders would like to see objective science
based regulations as the only standard used for determining policy and
guidelines. Cage culture production represents a first generation
industry in Ontario and operators feel they have not been adequately
recognized for the substantial work and research they have
undertaken to establish the industry over the last 20 years while
complying with all of the regulations.
This study has found that the cage culture industry in Ontario
produces important economic benefits for rural communities across
Ontario including many communities in Northern Ontario. The industry
is productive and entrepreneurial. It has also demonstrated its ability
to diversify local economies and provide stable employment. The
industry has even grater future economic potential for Ontario and the
province possesses considerable freshwater resources for supporting
the expansion of the industry. For the cage culture industry to thrive
and maintain its economic viability, regulatory agencies will need to
make a strategic commitment to address institutional barriers and
enable its future growth.
Read more....
| Executive Summary |
| Prepared by: Harry Cummings & Associates Inc. |
| "Environmentally Responsible, Environmentally Accountable" |