A study released by the St. John's airport authority this week shows that military traffic through the airport generates about $20 million in economic activity in the capital city.
Gander attracts slightly more flights, but most of their visitors don't overnight and that's where the spin-off cash is.
By the way, if you want an awesome news story on this air traffic, check out The Independent this week. They seem to have emerge from their doldrums to produce one of the best issues yet; there's lots of news not covered by other media outlets. In other words, they are living up to expectations. That's a good thing, as Martha, used to say.
Defence spending is something I have been harping on for years privately and now people are taking notice. I claim no credit for this study - they noticed on their own.
In the late 1990s, a study by the commander of Canadian Forces Station St. John's indicated his command generates about $30 million of economic activity annually including students at the Marine Institute, reserve units, and repair, resupply and refits in the port by navy ships.
So, there is about $50 million bucks. Toss in Gander and you are headed for $100 million. That doesn't include Goose Bay and the reserve units in Grand Falls-Windsor, Corner Brook and Stephenville.
No one has yet produced figures for the defence manufacturing and supply industry here but in the past 15 years it has gone from next to nothing to about six companies I can think of off the top of my head doing sub-contract work for major US defence contractors, working on Canadian contracts or in one or two instances selling their own products.
Defence-related activity in this province likely comes close to about CDN$250 million each year. Put it in perspective by flipping over to the economic analysis section of the province government. Here's a starting link. Look at the economic performance for 2004 and you'll see that defence activity accounts for more than agriculture, fish products manufacturing, and forestry and logging. Even if you look at direct defence spending alone, it beats out agriculture and agriculture has a whole section of Ed Byrne's Natural Resources department to help it along.
All of that activity occurs without very much, if any, encouragement from the provincial government.
Big shame.
Some of that direct defence spending, like the air force traffic and the local reserve units is virtually all salaries and purchased services and goods: that makes the spending a direct transfer into the local economy with taxes flowing to the provincial treasury. To make it even sweeter, upwards of 92% of the defence-related air movements are by the US armed forces, meaning that the cash they spend starts out as US dollars. Ditto for the manufacturing for companies like Boeing and Raytheon. New cash coming into the economy from outside is a major economic stimulus.
There is room for growth here on a number of fronts.
The Canadian Forces have to find a home for CFS St. John's and the local reserve units soon; the buildings they use now are slated for disposal and date back to the Second World War.
National Defence has a plan in the works for new construction either at Pleasantville or maybe Mount Pearl with an estimated cost of $68 million. That has to start very soon - like this year - and will give another boost to the local economy through construction work.
In addition, the provincial government has long-neglected marketing the province for military exercises and other training. I have already suggested publicly a way to bring new defence-related activity to Goose Bay but the local committee has been fixated on a number of big projects over the years that may never come to anything. Raytheon is doing a skillful marketing job, including stirring up interest in the past few days, but it makes no sense to put all our Goose-eggs into a single nest. We might wind up again with...well.. a goose egg.
Encouraging defence spending doesn't need a whole department or even a whole part of a whole department. In the early 1990s, I submitted a simple proposal to government - without any stats to back it up, unfortunately - calling for the creation of one or two new positions within government to work with the defence industry and keep track of defence-related activity in the province.
The paper went nowhere fast.
The existing departments just don't handle defence issues very well and they never seem to recognize the importance of defence to the province.
Well, something tells me the Premier might be interested in changing that.
Where did I put that old proposal anyway?
While I am off digging through my files, pick up the Indy and have a good read.
