With even moderate growth, the economic impact of offshore development for Nova Scotia in the next 30 years would be striking, giving the province more gains in gross domestic product (GDP) than any other region of Canada, according to a study by the Greater Halifax Partnership. The study, the first of its kind, examined three potential development scenarios to predict future impacts on the economy, and found that as long as the government offers credible incentives to industry, Nova Scotia’s growth will be dramatic.
“This is the first study giving us real insight into the future impacts of offshore development on Nova Scotia,” said Stephen Dempsey, CEO of the Greater Halifax Partnership. “We commissioned this study because we believe that in order to capitalize on the potential of offshore development, we first need to understand it.”
“Because we don’t know the true potential of this resource, we looked at predictions from a range of industry and geological experts and developed three potential scenarios — a conservative forecast, a moderate forecast and an optimistic forecast — of the potential,” said Louis Theriault, economist for The Conference Board of Canada and project manager for the study.
In Scenario 2, which is the moderate forecast, steady growth in employment is predicted in Nova Scotia over the forecast period, culminating in nearly 57,000 new jobs by 2020 as a result of offshore development. During the same period, the province’s unemployment rate is expected to decline to a low of 4.5%.
“This is extremely low unemployment,” said Theriault, “and based on The Conference Board of Canada’s economic forecasts across the country, only Alberta will have an unemployment rate significantly lower than Nova Scotia’s by 2020.”
In rural Nova Scotia, the impacts will be felt most significantly in the construction and manufacturing sectors. The construction industry alone is expected to record a gain of C$1 billion by 2020, more than doubling the expected growth in that industry over the forecast period. In Halifax, the most pronounced growth will be in the retail and service sectors.
Theriault said, “The most striking impacts are the gains in GDP because of the large investments required for exploration and development.” In Scenario 2, he said, Nova Scotia will produce overall GDP gains of C$6.2 billion, significantly outstripping GDP growth in all other provinces in the country.
“We feel that this study tells us much more than simply ‘if you produce this much, this will happen,'” said Dempsey. “First, and foremost, the simple message of this report is that Nova Scotians have every reason to be confident about the future. It also clearly shows us that developing a thriving oil and gas sector in Nova Scotia will take an enormous investment on behalf of industry and that this is a long-term proposition that will require long-term strategies.”
Dempsey said, “We believe the onus is on government and the business community to create a climate that encourages investment and that we [should] use this information to help us prepare now for opportunities over the long-term.”
The study was conducted by The Conference Board of Canada, with the support of El Paso Canada Pipeline Co., Emera, EnCana Corp., Halifax Regional Municipality, Province of Nova Scotia and Richmond County. The Greater Halifax Partnership is a private sector-led organization responsible for the economic growth of Greater Halifax. A downloadable copy of a summary report is available on the Greater Halifax Partnership’s web site at www.greaterhalifax.com.
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