EXECUTIVE SUMMARY - Saskatchewan Aviation Council

EXECUTIVESUMMARYA Study to Determine the Impact of SaskatchewanAir Transportation Now and in the FuturePrepared by Derek Murray Consulting and Associates in association with Pryde SchroppMcComb, Inc. and SaskTrends Monitor for Saskatchewan Aviation Council

Worth hundreds of millions of dollars and of immeasurable civil importance, Saskatchewan’saviation industry brings enormous economic, social and agricultural benefits to our provincewith every ascent into our broad living sky.And the results of a new study indicate the industry has a greater affect on theprovincial economy than many might initially conclude.Saskatchewan’s aviation sector accounts for 2.1 per cent of the provincial GDPand more than 15,000 direct and indirect jobs – that’s $825.1 million in GDP,$658.5 million in wages and $91.4 million in taxes, according to the report.Prepared for the Saskatchewan Aviation Council by Derek Murray Consulting andAssociates in association with Pryde Schropp McComb, Inc. and SaskTrends Monitor,the study – A Study to Determine the Impact of Saskatchewan Air Transportation Nowand in the Future – examines in detail Saskatchewan’s aviation industry and providesan analysis in the context of the importance of air transportation to the province.$91.4 million in taxrevenue far exceeds theprovincial investmentin the sector, accordingto the study.Further, the industry has also proven to be a good investment for the Saskatchewangovernment. That $91.4 million in tax revenue far exceeds the provincial investmentin the sector, according to the study.Saskatchewan-based air carriers, meanwhile, employ about 700 people – signifi cantlymore than Saskatchewan-based employment with national and international air carriersserving the province. The provincial aerospace sector is also important to the industry,employing roughly 285 people and recording annual sales of $55 million.The study shows aviation is essential to attracting and retaining corporate headoffices and related jobs in Saskatchewan and is absolutely critical to the developmentof Saskatchewan’s resource sector. For Saskatchewan to build its reputation asan international mining sector, aviation services must continue to be readily availableand expand in size and infrastructure.A lifeline to the northAviation is key to the northern Saskatchewan economy in particular, transportingpeople and equipment to and from operating mine sites, exploration projects andisolated communities. According to the study, more than 150,000 passengers arefl own to and from northern mine sites each year – a fi gure that’s expected to riseto 200,000 people in 2013.Aviation hubs such as Stony Rapids, which has a population of 240 people, aretrue gateways to the north and good examples of the impact of aviation in the north.As one of Saskatchewan’s busiest airports, Stony Rapids records more than 10,000aircraft movements annually, moving many times its population to and from its smallairport. By comparison, most Saskatchewan airports without scheduled servicenote about 2,000 annual aircraft movements.

According to the study, the economic impact of aviation related to northern miningexpenditures alone is $76 million in GDP, $41 million in employment income andmore than 900 full time equivalent jobs.On the social side of aviation, medical fl ights, RCMP fl ights and the transportationof Saskatchewan Justice teams to remote communities are all of significant importanceto northern residents. Tourism is also important to the north, bringing visitors andtheir spending money to fl y-in fi shing camps or other nature destinations.Assisting southern development147 airports inSaskatchewan278,000tourist visits to orwithin SaskatchewanIn southern Saskatchewan, the development of oil and gas reserves is dependanton aviation. Corporate fl ights frequent the runways of airports in Estevan, Shaunavon,Swift Current and Kindersley. Yorkton is a destination for fl ights relating to both thenorthern mining and the southern potash industries, making it one of the province’sbusiest airports.Aerial applicator flights are key to the provincial agriculture industry, with the airbornespraying of crops helping producers reap strong harvests. Some 50 businessesemploying 75 pilots record annual sales of $35 million spraying a low estimateof 2.5 million acres in Saskatchewan each year, the study shows.Again, tourism is an important economic driver for the province, with many airportsreporting tourism as its single largest economic impact resulting from the aviationsector. The study indicates in 2009, 278,000 tourist visits to or within Saskatchewaninvolved air travel, with those tourists spending $223 million in the province that year.The study makes it clear that air connectivity is critical to Saskatchewan’s economyand is key to northern living. Although the industry has reached a capacity largeenough to support two per cent of the provincial GDP, stakeholders interviewedfor the study say the province must invest more in aviation – especially at provinciallyowned airports.A case for investmentThere are a total of 147 airports in Saskatchewan, most of which operate on annualbudgets of less than $100,000 – some even operating on budgets of less than $25,000.There are two international airports in the province, located in Regina and Saskatoonand owned by Transport Canada, and one military airport, located in Moose Jaw andowned by the Canadian Military. The provincial government, through the Ministry ofHighways and Infrastructure, owns 17 airports, 15 of them in northern Saskatchewan.The remainder are regional, primary, secondary, local and private airports ownedby cities, towns, villages, rural municipalities and private groups.

According to stakeholders, the Saskatchewan government is doing a “good job”managing its 17 airports, but signifi cant capital expenditures are urgently requiredto meet the needs of the sector. Runway length and navigation technology aremajor issues for northern airports, which increasingly need to accommodate larger,newer aircraft.The Ministry of Highways and Infrastructure has an annual operating budgetof $1.9 million, or $106,000 per airport, covering annual operating and maintenancecosts. The Ministry does not have an ongoing capital budget for its 17 airports,the study says.A 2008 study undertaken for the Saskatchewan Aviation Council identifi ed $181million in capital upgrades required at provincially owned northern airports. Specialrequests for capital funding, such as $2.5 million to upgrade the runway at HudsonBay’s provincially owned airport, can be made through the Treasury Board.As Saskatchewanleads the countryin economic growth...the aviation sectorwill become moreimportant thanever before.Our neighbour Manitoba, meanwhile, relies more heavily on air transportation thanSaskatchewan, partly because its road system isn’t as developed as Saskatchewan’s(Saskatchewan has one of the highest road to population ratios in North America).Comparatively, the Manitoba government owns and operates 24 airports and hasan annual operating budget of $10 million, or $416,000 per airport. Manitoba’s northernairports have an annual capital budget of $5 million or greater and all of its 24 airportsoperate with permanent staff, which is not the case for airports owned by theSaskatchewan government.Meeting future potentialAs Saskatchewan leads the country in economic growth, expands its resource capacity,attracts new head offi ces to major centres, draws more tourists to the province andgrows in population, the aviation sector will become more important than ever before.Both the Saskatchewan Institute of Applied Science and Technology and theSaskatchewan Indian Institute of Technology are offering aircraft maintenance andpilot courses to supply the current industry with skilled employees and prepare forthe future.Some of Saskatchewan’s largest companies have departments dedicated to fl ightreservations and air travel.Clearly, the impact of air transportation in Saskatchewan is important and is a significantdriver of economic and social benefi ts and in need of greater investment. What is twoper cent of the GDP today could grow in scope over the coming years, making theSaskatchewan Aviation Sector an even greater asset to the province.The industry’s expansion potential is certain, it just needs additional encouragementto get off the ground.