socio-economic assessment of proposed digby (ns) …€¦ · re: socio-economic assessment of...

Group ATN Consulting Inc.

4th Floor, Collins Bank Building1883

Upper Water St. Halifax, NS B3J 1S9

www.groupatn.ca

SOCIO-ECONOMIC

ASSESSMENT OF PROPOSED

DIGBY (NS) BASED

OPERATIONS FOR CERMAQ

CANADA

Cermaq Canada

April 2020

© 2020 Group ATN Consulting Inc.

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SOCIO-ECONOMIC ASSESSMENT OF PROPOSED DIGBY-BASED OPERATIONS FOR CERMAQ CANADA

April 5th, 2020 Ms. Linda Sams, Sustainable Development Director Cermaq Canada Head Office #203-919 Island Highway Campbell River, BC Canada V9W 2C2 Phone: +1 250-286-0022 Sent Via e-mail to: Linda Sams: [email protected] Amy Jonsson: [email protected]

RE: SOCIO-ECONOMIC ASSESSMENT OF PROPOSED DIGBY-BASED OPERATIONS FOR

CERMAQ CANADA

Dear Ms. Sams,

We are pleased to attach our Final Report on Socio-Economic Assessment of Proposed NS-Based Operations

for Cermaq Canada.

The impacts provided in this report are significant in any context but particularly, in a rural community that,

by all socio-economic indicators, is in need of additional economic development.

This project is being contemplated at a time where there are extenuating circumstances. The current global

pandemic response has implications throughout the region (likely including Cermaq’s ultimate decision on

going forward).

The level of stimulus presented by the federal government a little over a week ago will probably have

implications for a generation of taxpayers to come. The more recent enrichment of the federal stimulus

spending makes this intergenerational liability a virtual certainty. It will likely now take more than one

generation to repay the debt incurred as we combat COVID-19.

More and more we are seeing how this crisis is not just impacting the federal government but rather, all

levels of government who are losing revenues through diminished economic activity, deferral of fees and

administrative costs, as well as direct COVID-19 related spending.

Without compromising science and with a balanced approach to environmental stewardship, today’s

leadership has a moral imperative to exhaust to carefully consider every economic development opportunity

to minimize the burden future generations will shoulder as we spend our way out of COVID-19 today.

The province has the opportunity to contribute millions of dollars to general revenues and to leverage the

activity in Digby to between 3 and 4 times greater through Cermaq’s plan to re-invest in NS through the

development of other planned sites toward full planned capacity.

Reflecting on the current discourse around Cermaq’s proposed investment, we understand that there are

concerns and challenges. In light of the debate, perhaps it is timely for Cermaq and government leadership

to explore a multilateral approach and a path forward for aquaculture in NS as part of the COVID response.

mailto:[email protected]



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This could be accomplished by building on Cermaq’s previous outreach to First Nations and seeking the

expressed support of the Assembly of Mi’kmaq Chiefs throughout NS. If not aquaculture in Digby, perhaps

a contingency plan could explore shifting lease locations to be adjacent to Mi’kmaq Communities or in

waters connected to Mi’kmaq Communities. This approach provides a potential short and long-term

solution to the current sectoral barriers to industry development, while creating a way forward for

considerable investment in Nova Scotia.

This past February, Lead Fishery Chief for the NS Assembly, Chief Terry Paul expressed his support for

developing the sector at the community level, while fully recognizing the potential impacts of the

aquaculture industry regionally. With this in mind a contingency discussion may be well placed in the

coming days in the lead up to next week’s decision.

We have appreciated the opportunity to work with yourself, Amy Jonsson, Vicki Savoie, Peter Harper, and

others at Cermaq and we will be pleased to advance any further dialogue that may be required to ensure

that the final report fully reflects your requirements.

With best regards,

Thomas McGuire, Principle Group ATN Consulting Inc. P: 902.830.7191 E: [email protected]



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CONTENTS

1 INTRODUCTION .............................................................................................................................................................................. 1

2 FISHING INDUSTRY LANDSCAPE ................................................................................................................................................. 2

3 AQUACULTURE & SEAFOOD PROTEIN ...................................................................................................................................... 4

3.1 The Norwegian Experience .............................................................................................................................................. 5

4 CERMAQ’S APPROACH TO AQUACULTURE ............................................................................................................................. 7

4.1 STAKEHOLDER ENGAGEMENT ......................................................................................................................................... 8

5 PERCEPTION IN ATLANTIC CANADA .......................................................................................................................................... 9

6 DIGBY’S SOCIO-ECONOMIC PROFILE ...................................................................................................................................... 10

7 CASE STUDIES ............................................................................................................................................................................... 11

7.1 Fort Williams, Scotland................................................................................................................................................... 11

7.2 Tasmania, Australia ......................................................................................................................................................... 12

7.3 Newfoundland and Labrador, Canada ........................................................................................................................ 13

7.4 Key Take-Aways................................................................................................................................................................ 14

8 Estimated Benefits to The Community .................................................................................................................................. 15

8.1 Overview of Operational Impacts ................................................................................................................................ 15

8.1.1 Detailed Operational Impacts .................................................................................................................................. 16

8.2 Overview of Construction Impacts .............................................................................................................................. 19

8.2.1 Detailed Construction Impacts ................................................................................................................................ 20

9 OBSERVATIONS............................................................................................................................................................................ 23

ANNEX A: DEFINITIONS ....................................................................................................................................................................... 25

ANNEX B: LIMITATIONS ...................................................................................................................................................................... 26


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1 INTRODUCTION Cermaq contracted Group ATN to conduct a socio-economic assessment of the potential capital investment

of a portion of their $500 million to establish a 20,000-metric tonne per-year aquaculture operation

(province-wide).

The current analysis focuses on the impacts of the project’s first phase, which includes a $130 million

investment in Digby County, NS. The objective of this effort was to explore and measure (both qualitatively

and quantitatively), the social, economic, and societal benefits that might be realized from implementation

all elements of a full-scale salmon farm and processing facility that is focused on supplying the global

seafood market.

Environmental considerations are the subject of separate efforts and not included in GATN’s scope. Likewise,

GATN’s work occurred concurrently with Cermaq’s engagement with Mi’kmaq communities, the community

of Digby NS, and fishermen, focused on the potential benefit agreements, among other areas.

The collective work will aid with local decision-making regarding benefits versus risk.

This report provides estimates the socio-economic benefits, as well as the potential health, societal and

intergenerational benefits that Cermaq’s proposed development will contribute to regional and provincial

economies, with a focus on Digby County.

Building on this analysis, the report provides:

◼ An overview of the fishing industry as it relates to the wild harvest.

◼ The role of aquaculture in the supply of seafood protein.

◼ An overview of Cermaq’s approach to aquaculture investment and current stakeholder engagement

process,

◼ Highlights of research into people’s perception of aquaculture.

◼ A profile of Digby’s socio-economic context.

◼ Findings from a jurisdictional scan that highlighted three case studies.

◼ The results of our assessment of the impact from Cermaq’s proposed investment in Digby, and

◼ Our observations reflecting on the analysis and the opportunity this project represents to Digby

and Nova Scotia more broadly.


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2 FISHING INDUSTRY LANDSCAPE The fishing industry has been growing since the 1960s and its growth is projected to continue, albeit

constrained due to the capacity of commercial stocks to regenerate. At the same time, aquaculture

production has increased significantly in the past several years, with aquaculture production recently

exceeding commercial fisheries production.

The Aquaculture industry is currently one of the world’s fastest growing industries. Between 2010 and 2018

the aquaculture industry had an annual growth rate of 5.8%1. It is estimated that the market with see a

compound annual growth rate (CAGR) of 4.46% between 2018 and 20222.

To answer projected seafood protein demand without increasing pressure on wild fish stocks,

aquaculture production needs to double by 2050.

In 2017, global aquaculture production reached 80.1 million tonnes valued at US$237.5 billion and

employed some 26 million workers (19.3 million directly and about 6.5 million indirectly). The Asia–Pacific

region continued to dominate the aquaculture sector, accounting for 91.9 % of global production3.

In Canada, the fishing, hunting and trapping GDP declined by 2% in 2018, and by 5% in 2017, while fish

processing declined by 5% in 20184. The industry employed close to 80,000 Canadians in 2017, mainly in

the Atlantic Provinces5.

In 2018, Canada exported around 600,000 metric tonnes of fish and seafood product, with an estimated

value of $7B, and imported 520,000 metric tonnes, with an estimated value of $4B6. Aquaculture imports

are mainly from US (large majority), New Zealand, Norway, UK and Ireland.

In 2017, 23% of Canadians who worked in the fishing industry were from NS, making NS the province with

the highest rate of employment in the sector, tying NL’s industry employment rate. Of those Nova Scotians

working in the fishing industry, 74% worked in harvesting (29% Canada wide), 24% worked in processing

(15% Canada wide) and 1% worked in Aquaculture (7% Canada wide)4.

Without question, the Atlantic Provinces are major players in Canada’s fishing industry with:

◼ 86% of registered vessels are in the Atlantic region (i.e. 15,150), and account for 75% of the volume

of landing in Canada. The total value of commercial landings in Nova Scotia was $1.1B in 2017,

representing 41% of the total value in Atlantic region, and 37% in Canada1.

1 Food and Agriculture Organization of the United Nations. 2018. The State of World Fisheries and Aquaculture

http://www.fao.org/3/i9540en/I9540EN.pdf?segid=19d0657b-c698-4c9e-a3e6-417ded56b3d6 2 Knowledge Sourcing Intelligence LLP. 2017. Global Aquaculture Market - Forecasts from 2017 to 2022.

https://www.researchandmarkets.com/research/hgknlp/global 3 Food and Agriculture Organization of the United Nations. Aquaculture. http://www.fao.org/aquaculture/en/ 4 Department of Fisheries and Oceans. 2020. Fisheries and Canadian Economy: GDP. https://www.dfo-mpo.gc.ca/stats/cfs-spc/tab/cfs-

spc-tab3-eng.htm 5 Department of Fisheries and Oceans. 2020. Fisheries and Canadian Economy: Employment. https://www.dfo-mpo.gc.ca/stats/cfs-

spc/tab/cfs-spc-tab2-eng.htm 6 Department of Fisheries and Oceans. 2019. Canada’s Fisheries Fast Facts 2019. https://www.dfo-mpo.gc.ca/stats/fast_facts_2019.pdf?

http://www.fao.org/3/i9540en/I9540EN.pdf?segid=19d0657b-c698-4c9e-a3e6-417ded56b3d6

https://www.researchandmarkets.com/research/hgknlp/global

http://www.fao.org/aquaculture/en/

https://www.dfo-mpo.gc.ca/stats/cfs-spc/tab/cfs-spc-tab3-eng.htm




https://www.dfo-mpo.gc.ca/stats/fast_facts_2019.pdf


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◼ 57% of registered aquaculture establishments are in the Atlantic region (i.e. 529), however, they

only account for 40% of the volume of production in Canada, while the pacific accounts for 50% of

the volume of production and counts 26% of registered establishments. The total value of

production in aquaculture in the Atlantic region was $369M, in 2017, representing 26% of the total

value of production in Canada1.

Digby County’s economy relies heavily on fishing and is world-renowned for its high-quality lobsters and

scallops. According to one study, fisheries landings in Digby County represent $119 million in added value

(GDP), $54 million in earned income, and about 1,100 jobs in Canada7.

7 Gardner Pinfold. 2018. Economic Impact Study of Independent Marine Ports in Atlantic Canada. https://impacports.com/wp-

content/uploads/2019/07/Gardiner-Pinfold-final-Report-Presentation-including-Infographic.msg_.pdf

https://impacports.com/wp-content/uploads/2019/07/Gardiner-Pinfold-final-Report-Presentation-including-Infographic.msg_.pdf

https://impacports.com/wp-content/uploads/2019/07/Gardiner-Pinfold-final-Report-Presentation-including-Infographic.msg_.pdf


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3 AQUACULTURE & SEAFOOD PROTEIN Changes in the existing food supply system are needed to support current and projected population. The

Food and Agriculture Organization estimates that currently 10.8% of the world’s population, representing

over 820 million people, are undernourished8. With global population expected to reach 8.5 billion by 2030

and 9.7 billion by 2050, it is estimated that 35% more food will be needed by 2030, and 70% more will be

needed by 20509.

Current global challenges faced are putting additional strains on the food supply. Issues such as climate

change and more recent developments with COVID-19 are projected to become increasingly challenging.

Notably, climate change is projected to significantly decrease land-based productivity and nutritional

quality, ultimately threatening food security worldwide. The IPCC estimates that climate change alone will

put an additional 1 to 188 million people at risk of undernourishment10.

With over 2.5 billion people relying on fishing for protein, overfishing and high-impact fishing technics have

put a major strain on wild fish habitat and regenerative capacity, and significantly impacted ocean health

more broadly. It is estimated that global fish populations declined by over 50%between 1970 and 2010, and

that some populations, such as Scombridae, decreased by 74% during the same period11.

Aquaculture offers potential relief for wild fish. By reducing demand for wild harvest and increasing

aquaculture production, our oceans would be allowed time to be replenished, while offering

consumers a source of seafood food protein.

Salmon farming in particularly is considered as one of the most resource efficient ways to produce seafood

protein. Salmon production is one of the protein sources with the smallest environmental impacts, with low

energy and less freshwater consumption, and offers one of the greatest feed conversion and edible yield.

According to the Global Salmon initiative, producing 40g of edible salmon has an associated carbon

footprint of 0.60gCO2eq, compared to 1.30gCO2eq for pork and 5.92gCO2eq for cattle12. In terms of water

consumption, estimates suggest 900 liters of water are needed to produce 1kg of salmon, while 3,000 liters

of water are needed for 1kg of rice and 15,000 liters for 1kg of beef.

Finally, with a feed conversion ratio of 1:1, where 1lbs of feed is required to produce 1lbs of fish (or protein),

aquaculture is positioned as the second most sustainable protein source after insects, and as a central

component of our future food system.

8 Food and Agriculture Organization of the United Nations. 2019. The State of Food Security and Nutrition in the World.

http://www.fao.org/state-of-food-security-nutrition/en/ 9 Food and Agriculture Organization of the United Nations. 2011. The State of the World’s Land and Water Resources for Food and

Agriculture: Managing Systems at Risk. www.fao.org/3/i1688e/i1688e.pdf 10 Intergovernmental Panel on Climate Change (IPCC). 2019. Chapter 5: Food Security. Climate Change and Land.

https://www.ipcc.ch/srccl/ 11 World Wildlife Fund (WWF). 2015. Living Blue Planet Report: Species, habitats and human well-being.

http://awsassets.wwf.ca/downloads/living_blue_planet_report.pdf?_ga=2.200980333.295963985.1586183515-

1688314609.1586183515 12 Global Salmon Initiative. 2020. Sustainability Report. https://globalsalmoninitiative.org/en/sustainability-report/protein-production-

facts/#carbon-footprint

http://www.fao.org/state-of-food-security-nutrition/en/

http://www.fao.org/3/i1688e/i1688e.pdf

https://www.ipcc.ch/srccl/

http://awsassets.wwf.ca/downloads/living_blue_planet_report.pdf?_ga=2.200980333.295963985.1586183515-1688314609.1586183515

http://awsassets.wwf.ca/downloads/living_blue_planet_report.pdf?_ga=2.200980333.295963985.1586183515-1688314609.1586183515

https://globalsalmoninitiative.org/en/sustainability-report/protein-production-facts/#carbon-footprint

https://globalsalmoninitiative.org/en/sustainability-report/protein-production-facts/#carbon-footprint


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As stated by the former UN Secretary General Ban Ki-Moon during the 2018 Aquavision conference,

“Fish farming is central to being able to cope with climate change, ensure social responsibility, and

meet sustainability goals while reducing environmental impact.”

3.1 The Norwegian Experience Norwegian aquaculture emerged in the 1970s and saw significant growth since 2000 with production

reaching 1,326,216 metric tones in 2016. A focus on research, with strong cooperation between fish farmers

and academics, and annual investments of over £14.5 million (CA$1.75 million), have positioned aquaculture

as one of the major industries in Norwegian coastal communities.

Production is mainly composed of Atlantic Salmon, representing 93% of all farmed fish in 2016, as well as

Rainbow Trout, Mussels, and Atlantic Halibut, representing 6.7%, 1.6% and 1.1% of total production

respectively. Norway also positions itself as the second largest exporter of sea food product, 70% of which

are Atlantic salmon, representing the equivalent of 14 million meals per day. Trade relations are mainly in

Europe, with Poland and France as the top two importers. Past disputes with China have been resolved and

this offers additional opportunities for the aquaculture sector. Norway aims to increase production to 2.7M

tonnes by 2025, and 5M tonnes by 2050.

Over the years, the industry in Norway has been faced several challenges and issues which typically fall into

two categories:

1) Impact on wildlife; and

2) Availability of sea space.

The impact on wildlife includes the impact of escaped fish and the increased risk of sea lice, while competing

interests and the reluctance of some municipalities to introduce operations in their waters have worked to

reduce the operational sea space available for the industry.

Still, various practices and regulatory changes have been adopted in Norway and elsewhere to mitigate

these issues. For instance, innovative and environmentally friendly approaches have been developed and

implemented to minimize the impact of sea lice. Methods include the use of cleaner fish, natural sea lice

predators, and bath treatments.

Regulatory responses have also included policies such as the NYTEK or the Norwegian Standard: a set of

standards for aquaculture operations aimed at reducing the risk of escapees, and the new growth regime,

where development of future operations is determined by environmental conditions, particularly sea lice, in

13 predetermined zones.

Today, the industry is guided by a stringent regulatory framework, with a strong focus on environmental

sustainability, including measures such as fallow periods between farming cycle and close monitoring of

the sea bed to minimize environmental impacts, These are in addition to a practice where the issuance of

licenses are limited to ensure controlled development. Stringent operational guidelines include feeding all-


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natural diets, heavy restrictions regarding the use of antibiotics and pesticides, and close monitoring of

pollutants have also been implemented to ensure high quality fish and environmental stewardship.

While aquaculture will be a key component in our future food system, some risks are associated to these

operations, including:

◼ Impact on local fish populations by transferring diseases and parasites, notably sea lice.

◼ Water pollution due to excess nutrients, feed waste, pesticides, antibiotic and chemicals used in

aquaculture facilities; and

◼ Risk of escapees and their impact on local population, which in some cases, could lead the

extinction of local fish populations.

Although the Norwegian aquaculture industry has the longest history at roughly 50 years, relative to

traditional farming, aquaculture is a relatively new sector and the technology and farming methods have

had to evolve quickly end effectively under a level of scrutiny not faced during the development of

traditional agriculture.

Multiple studies were conducted in Atlantic Canada to understand the industry’s impact on marine wildlife,

in particular lobsters. However, these studies report significant difference in findings ranging from no

observed impact, to seasonal and species-specific impacts, to significant negative impacts. These studies

suggest that, like anything, aquaculture can be done poorly, or it can be done very well.

Considering these studies in combination with international practices suggests technological advancements

and proper management allow these risks to be considerably mitigated, ultimately minimizing

environmental impacts.


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4 CERMAQ’S APPROACH TO AQUACULTURE Cermaq, part of Cermaq Global with headquarters in Norway, is Canada’s second largest salmon farming

company. The Company is guided by five principles:

◼ Business Mindedness. Committed to sustainable growth with significant positive impacts to

regions of operations.

◼ Corporate Responsibility. Committed minimizing negative impacts to surrounding ecosystem

while maximizing working conditions and respecting indigenous rights.

◼ Integrity. Committed to operating with honesty and respect.

◼ Sharing Success and Concerns. Committed to communicate and engage employees, stakeholders

and First Nations in a timely manner.

◼ Long Term Perspectives. Committed to making business decision based on existing and long-

term factors to ensure sustainable farming.

Cermaq prides itself in supporting the United Nation’s Sustainable Development Goals (SDGs) and Action

Platform, and was the first company to join the Action Platform on Sustainable Ocean Business, a multi-

stakeholder platform guided by three principles:

◼ Building the foundation for a sustainable use of the ocean.

◼ Achieving goals through growth, innovation and sustainability; and

◼ Mobilizing businesses to deliver on the Sustainable Development Goals through tangible actions,

investments and partnerships.

Cermaq has already proactively adopted measures to deliver on the:

◼ SDG 2 – No Hunger,

◼ SDG 8 – Good Jobs and Economic Growth,

◼ SDG 12 – Responsible Consumption,

◼ SDG 13 – Climate Action, and

◼ SDG 14 – Life Under Water.

Actions undertaken to achieve these goals include the development of a Carbon and Energy Management

Program for Cermaq Global operations on all three continents, and its continuous support to local

communities, with annual investments of over $500,000 through sponsorships, in-kinds and strategic

project support, ultimately ensuring economic growth in rural communities. Over the years, Cermaq has

partnered with various local organizations and First Nations communities and supported an array of projects

to ensure long-term ocean health such as ocean clean-ups, shoreline and intertidal cleanup and restoration,

and habitat restoration projects.


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Also reflective of Cermaq’s commitment to long-term sustainable practices and continuous improvement

is its voluntary participation with independent third-party certifications such as Aquaculture Stewardship

Council (ASC), Best Aquaculture Practices (BAP), and ISO standards across the business.

Through its sustainable practices, job creation potential, and strong commitment to local communities,

Cermaq has proven to be aligned with provincial, regional and national priorities.

The Nova Scotian Government’s economic growth strategy had identified the development of aquaculture

as a priority in order to grow a strong and sustainable economy. With average compensation of $65,00013,

objectives put forward through the Atlantic Growth Strategy, including the creation of well-paying middle-

class jobs, ultimately strengthening local communities will be furthered by Cermaq. Finally, its commitment

to building relationships with First Nation’s communities presents a step towards reconciliation.

The persistence of underrepresentation among many of our populations and communities is a priority in

Cermaq’s approach to supporting labour market development. Embracing the evolving concept of

inclusivity and diversity, this area is well-understood by the company as it ensures it is fully aware of and

sensitive to the dimensions of diversity and inclusivity.

Over the past several years our collective understanding of each others culture and values has grown and

one would expect this understanding will continue to grow as we work with our various communities. In

turn, Cermaq’s team is committed to working with others to help them build their cultural competencies so

that all segments of the Cermaq workforce are included in the contemporary economy.

In the short term, these trends need to be understood through focused outreach, engagement, awareness

and sharing. While in the medium and longer term, Cermaq’s planned actions and engagements will support

measurable results for the region’s economy and community benefits.

4.1 STAKEHOLDER ENGAGEMENT At a time when social license for projects like this has become so important, ensuring productive and open

relationships with all stakeholders is a key component of Cermaq’s corporate culture. This is a central

element of Cermaq’s socio-economic commitment to the region and to local stakeholders.

On this Project, Cermaq has been diligent in engaging with the local community and other stakeholders,

including Mi’kmaq interests. Cermaq has opened opportunities for dialogue and engagement with

representatives of Nova Scotia Mi’kmaq First Nations, the Municipalities throughout the region, and the

public regarding the project.

To optimize the local economic benefits and impacts of these projects, Cermaq’s objective is to focus on

opportunities for the residents and businesses within the region to participate in the Project. They have

made this commitment throughout the permitting process. Taking this approach enables Cermaq to

establish its operations as an active member of the community and a participant in the sustainable

development in South Western Nova Scotia, and the rest of the province. To further impact local economic

13 Source: Cermaq


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benefit impacts, Cermaq prefers to award contracts to local businesses, as well as other businesses within

the Province.

In relation to environmental practices, Cermaq is committed to best practices in sustainable aquaculture

development and ensuring the protection of natural resources and the environment. These practices include

reducing water and energy consumption, preventing soil, water, and air pollution, minimizing land

disturbance and waste production and conducting successful and efficient facilities for operations. In

presenting these impacts, the economic impact analysis highlights the significant employment potential of

this important development in a largely rural area of Nova Scotia.

5 PERCEPTION IN ATLANTIC CANADA Positions regarding the aquaculture industry in the region are mainly positive, with 51% of Atlantic Canada’s

(ACs) having a favorable view of aquaculture, and 48% having a positive impression of salmon farming (with

23% expressing a negative view)14. When asked to evaluate general statement:

◼ 67% felt that aquaculture is a valid user of the coastline (18% disagreed).

◼ 77% felt that aquaculture should be allowed to increase if done in a sustainable way (43% of ACs

believe current salmon farming practices are sustainable; and 22% answer don’t know); and

◼ 81% felt that aquaculture is an important economic activity.

Positive views were fostered by the idea that aquaculture helps rebuilding wild fish stocks (by shifting

demand from the wild harvest), is a sustainable practice, offers local products, and has many economic

benefits, notably the creation of jobs (86% feel that it creates good jobs).

On the other hand, negative views were focused on perceptions around the environmental risks and

negative impacts, including waste accumulation and sea lice, the disruption of harm to wild stocks, and the

use of chemicals and antibiotics.

When asked to evaluate general statement regarding the benefits of aquaculture:

◼ 84% believe aquaculture is necessary to meet the growing global demand for seafood,

◼ 60% believe it provide high quality seafood that is safe to eat,

◼ 67% believe it relieves pressure on wild stocks, and

◼ 79% believe aquaculture is a sustainable way to produce food.

14 Aquaculture International (2019) 27: 9–32 https://doi.org/10.1007/s10499-018-0312-9

https://doi.org/10.1007/s10499-018-0312-9


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6 DIGBY’S SOCIO-ECONOMIC PROFILE Digby County has a population of

approximately 17,433 (2018) but it

is an aging population, with a

median age of 52. The County’s

population is projected to

decrease in the next decade

reaching 16,932 by 2028 (Figure

1). At the same time, the number

of households are projected to

grow at a significantly lower rate in

County, with a 1.1% increase

between 2016 and 2028,

compared to 9.2% increase in the

Province.

Education levels are lower than the provincial average with 23% of the population have not completed a

certificate, diploma or degree and 14% completed a degree at the bachelor level or higher, compared to

12% and 26% in the Province respectively.

In terms of industry, agriculture, forestry, fishing and hunting and the manufacturing sectors are largely

overrepresented in the region with 16% and 14% of the population working in these industries, compared

to 4% and 7% in the Province. Occupations relating to primary industries and processing, manufacturing

and utilities are also largely overrepresented in the region with 14% and 10% of its population working in

these occupations compared to 4% in the Province for both.

Income in Digby County is typically lower with a median income of $48,006 compared to $60,481 in the

Province. Incomes are projected to increase at a slightly lower rate with an 15% increase between 2018 and

2023, compared to an 17% increase for the Province. Cost of living is however slightly lower in the County

with expenditure averaging around $50,000, compared to $57,000 in the Province.

While immigration is increasing in urban areas, a slower rate is seen in rural areas, and Digby in particular.

Notably, the area is currently experiencing:

◼ Repatriation of retired workers from west and other regions who are moving back home – they

have accumulated careers-worth of skills and talent and represent a mentoring resource that is

untapped.

◼ Interest among these older workers / retired workers in mentoring others / younger workers

and entrepreneurs.

◼ Increasing interest among people in having second careers – either part-time or full-time.

16,400

16,600

16,800

17,000

17,200

17,400

17,600

17,800

910,000

920,000

930,000

940,000

950,000

960,000

970,000

980,000

990,000

1,000,000

1,010,000

1,020,000

2016Census*

2018estimated

2021projected

2023projected

2028projected

Dig

by

Co

un

ty

No

va S

coti

a

Figure 1. Population Growth

Nova Scotia Digby County


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◼ Recognition of the importance of and the tools and resources available to invest in self-employment

/ micro-enterprise opportunities (e.g., artisans, crafts, etc.) which are relevant in our region.

Potential economic bright spots are in decline or are being threatened (e.g., the regional loss of mink

farming, contraction in fisheries, labour shortages in fish processing / increasing automation and

needs for up-skilling, existing and displaced workers) that suggest a structural change in the nature

of employment and labour force participation going forward.

While Digby is seeing fluctuations in demand / seasonality related to fisheries / processing, Cermaq

offers a stability across a longer season of operation. While new opportunities are arising, including

opportunities in cannabis, the region is challenged with the legal threshold workers need to meet to

participate (e.g., no criminal record) in a sector that also has its own growing pains. This can present a

challenge in that some of our underrepresented groups are also overrepresented in the legal system.

Additional opportunities include the potential expansion of the Michelin Plant (adding another 500 people)

and the opportunity for the labour force for the area, the opportunities and impact of the sharing economy,

and trends in workplace education and training, and the relationship of these changes to trends in lifelong

learning and the employment continuum.

However, with fewer larger employers regionally and province-wide and, economic development solutions

must recognize that corporate recruitment and direct investment needs to be strategic and focused on

small and medium sized enterprises (SMEs). Cermaq, with the scale of investment being contemplated,

uniquely counters this trend and represents a potential economic windfall for an area that, based on the

available socio-economic indicators.

7 CASE STUDIES As part of our research, we examined three case studies to better understand the potential impact following

the introduction of aquaculture. These case studies illustrate the impact of aquaculture on other rural and

remote areas where aquaculture has been introduced. Challenges and opportunities were identified and

considered accordingly. The case studies included:

◼ Fort Williams, Scotland.

◼ Tasmania, Australia, and

◼ Newfoundland and Labrador, Canada.

7.1 Fort Williams, Scotland Scotland’s Aquaculture industry rapidly development in the 1990s and 2000s and has since then become

the largest producer in the European Union, and third largest producer globally. In 2016, the industry had

an estimated GVA of £216M, representing 0.16% of the Scottish economy and 6% of the marine economy,

and employed 25,300 people, representing 0.09% of the Scottish employed work force and 3% of the marine


12


economy employed workforce. Atlantic Salmon operations account for 95% of aquaculture production in

the country. The sector is highly present in the islands and highlands, where it is seen as an opportunity to

create sustainable economic growth in rural and coastal communities.

The positive impact is seen in Fort Williams which counts a population of 21,012, representing 0.4% of

Scotland’s population. The region has an employment rate of 83.7%, ranking 5th highest in the country.

Jobs are stable in the region, showing no fluctuation between 2016 and 2017. The region also has a higher

level of education, with 40% of the work force holding a degree, compared to the country’s average of

28.3% and 33% in Scotland’s 7 major cities. It should be noted that Fort Williams also derives benefits from

a highly developed tourism sector which is a strong contributor to the region’s economy.

While various challenges such as pest and disease, and conflicts with other industries such as fishing,

tourism and recreation, and shipping are seen, no major issues relating to the remote location are identified.

Furthermore, the Scottish government is currently encouraging the expansion further offshore in these

remote operations. These expansions are however not always well met by the public who have expressed

concerns regarding the environmental risk these operations present. Concerns brought forward include

pest and disease control, pollution and measures typically utilized for predator control, all of which can

negatively affect native species and may indirectly affect tourism in these regions.

7.2 Tasmania, Australia Having rapidly developed in the 1990s, Tasmania’s aquaculture industry is currently considered the state’s

largest primary industry with a gross value of $832.9M. As of 2019, the state counted 44 marine fish farms

and 16 freshwater farms, with salmonid being the main species farmed, with an estimated 51,298 tonnes

produced. It is estimated that the industry has created 5,200 jobs including 1,600 direct jobs and 3,770

indirect jobs located in Tasmania or Australia. The positive impacts of this industry are also felt beyond

aquaculture and processing operations as an ancillary sector is now thriving in the state, providing vessels,

cages, nets and feed, training, transport and logistics, and a range of contract and consultancy services. It

is estimated that ancillary sectors account for 800 FTE in the region surrounding the city of Hobart alone. In

addition to this, significant investments in local communities have made these remote communities’

dependant on aquaculture.

While the states climate, pristine waters and water temperature make it ideal for aquaculture operations,

many challenges are still being faced such as stringent regulations and access to international markets.

Operations situated in remote locations have experienced challenges relating the lack of high-quality

infrastructure, such as roads, ports, electricity and freight logistics. The industry also faces a poor reputation

amongst the population, as practices are often deemed unsustainable and worries regarding their

environmental impact are voiced. This despite the stringent regulations guiding the industry. Poor

perception of the industry is often seen as a result of poor practices in other countries and the lack of

knowledge regarding the regulatory framework. Shifting public perception has been listed as one of eight

goals under Australia’s National Aquaculture Strategy.


13


7.3 Newfoundland and Labrador, Canada Newfoundland and Labrador’s aquaculture industry rapidly development in the early 2000s. It has since

then become the second strongest aquaculture industry in Canada with an annual production of 28,622

tonnes and a total market value of $276M in 2016. While the Atlantic salmon, Steelhead Trout and blue

mussels are farmed in the Province, salmonid operations (Atlantic Salmon and Steelhead Trout) account for

95% of the production. The Province currently estimates the industry, in particular Salmon farm operations,

has the opportunity the generate up to $600M in GDP uplift and an additional 7,000 jobs by 2030. It should

be noted that most jobs generated are expected to be located in rural and remote communities,

contributing to advancing regional economic development.

Most Salmonid farm operations are found in southern Labrador, in the Coast of Bays, where the positive

social and economic impact of the industry becomes even more apparent. In 2010, aquaculture accounted

for 22% of regional employment, with 779 of the 3,605 jobs in region, and for 47% of income generated

from employment, with $28M of the $67M in income from employment in the region. This has made

operations within the region highly accepted. It should also be noted that declines in the fishing industry,

often strongly opposing the industry, have most likely contributed to the wide acceptance of Aquaculture

operations.

While the industry saw fast development, the province faced and is still facing multiple challenges which

limits the growth of the industry.

◼ Located in a storm-prone area, technological advances were made to ensure structures are storm

resistant, particularly to high winds and currents.

◼ The remote nature of aquaculture communities can also create challenges when moving product

or equipment, particularly heavy equipment when conducted facility upgrades.

◼ Operations are also highly dependent on local service industries for repairs requiring on-demand

response in a quick and efficient manner.

◼ Fish die-off has also been an issue in past years. These have had various causes including sea lice,

and various diseases as well as increases in water temperature during the summer, as seen in the

2019 die-off in Fortune Bay, and freezing water during the winter; however, solution(s) have been

identified, notably ensuring nets are found at a depth of 15m.

◼ Finally, the Canadian aquaculture is currently facing a labour shortage, with an 11% industry vacancy

rate. Multiple factors are contributing to this issue including more lucrative employment

opportunities in other regions, non-competitive wages and migration of youth in urban centers.

The lack of technical degrees in aquaculture has also made recruitment in the region difficult,

although some solutions were recently advanced. Notably, the Fisheries and Marine Institute of

Memorial University of Newfoundland recently developed and is now offering a Certificate in

Aquaculture Management. The certificate is a 12-day program, which includes four 3-day courses,

requires a minimum equivalent to grade nine, and takes place in remote communities near

aquaculture operations.


14


Despite these challenges the Province, in particular the Bay of Coast region, reaps multiple environmental

advantages including multiple sites with good current flows and high levels of oxygen, contributing to

creating an ideal environment for salmon production. Deep bays have also allowed sites to be sheltered

and reduce the risk and negative impact of salmon escapees.

7.4 Key Take-Aways Aquaculture has proven to be an effective industry to foster economic development in rural and remote

communities. This is highly apparent in these governments’ economic development strategies and with the

negative impact less productive years have on these communities. Socio economic data also suggest the

industry positively impacts jobs, by offering year-round well-paid jobs which are often scarce in these

regions. While these aquaculture farms are highly dependant on environmental factors and face various

challenges such as pest and diseases, changes in water temperature and oxygen content and are sometimes

faced with stringent regulations, little additional challenges resulting from the remote location of these

operations were identified. Where challenges were identified, these included:

◼ The lack of high-quality infrastructure such as roads, ports, electricity, amongst others, which can

result in logistic issues when requiring new equipment and higher operational costs due to

transportation; and

◼ Labour shortages, which are apparent throughout the industry, but seem to be greater in remote

regions, particularly in Newfoundland and Labrador.

Additional challenges may be foreseeable, particularly in the event where ancillary sectors are

underdevelopment in the region of operations. This sector includes the construction and sale of vessels,

cages, nets and feed, as well as training, transport and logistics services. However, these sectors may be

developed in parallel to new operations with a proper business plan.

Social acceptability has also proven difficult in certain instances, as poor environmental and quality

standards in other countries are believed to be reflective of local operations. Main public concerns relate to

environmental risks these operations may present and their potential harm to wildlife, as well as the direct

and indirect impact these operations may have on other industries, particularly fishing, tourism and

shipping. While operations in Newfoundland and Labrador suggest social acceptability can be achieved, an

accurate reflection and implication of the aquaculture producers seems to be central in achieve this

outcome.


15


8 Estimated Benefits to The Community Our approach to this assignment was to calculate economic impacts using a proprietary Input-Output (I-O)

model that is based on Canada's National System of Accounts15 and reflective of the latest Interprovincial

trade flows. The model used Statistics Canada Input-Output tables and other data (such as salaries, tax

coefficients, among other factors).

The main outputs of the I-O models are reported for direct and spinoff (indirect and induced) effects. This

I-O model considers inter-provincial flows of goods and services among all ten Canadian provinces.

Unlike impact models that relay on multiplies or previous studies, the I-O simulation model used in this

project was tailored to the Nova Scotia economy to generate all economic impacts at the county level,

provincial level, and for the rest of Canada.

The results of this I-O analysis provides a detailed measure of the impact of the annual operations of Cermaq

and their relationship to the Nova Scotian economy including economic impact in terms of direct, indirect

and induced activity reflecting the entire supply chain, on16:

◼ Employment (jobs)

◼ Household income

◼ Contribution to federal, provincial and local taxes

◼ GDP

The resulting analysis is provided for both operations and construction, based on data provided by

Cermaq. This included detail expenditure and revenue data. Due to confidential nature of the information,

the input used to model both the operating impacts and the construction impacts is not included in this

report.

8.1 Overview of Operational Impacts Cermaq’s proposed annual operations are expected to generate $44M of total output and will have

considerable economic impacts, affecting employment, GDP, income, government revenues, and tax

revenues. Expected direct and spin-off17 impacts include:

◼ 251 person-years in direct and spinoff employment.

◼ $33.5 million in direct and spinoff GDP.

◼ $12 million in direct and spinoff household income; and

◼ $5.1 million in direct and spinoff government tax revenues, including $2.6M in direct and spinoff

federal tax revenues, and $2.5M in direct and spinoff provincial tax revenues.

15 https://www150.statcan.gc.ca/n1/pub/13-607-x/2016001/36-eng.htm 16 Additional definitions are provided in Annex A. 17 Spinoff impacts include both indirect and induced economic effects. See the section above on

“Definitions”.

https://www150.statcan.gc.ca/n1/pub/13-607-x/2016001/36-eng.htm


16


A summary of operational impacts is presented in Table 1.

Table 1. Summary of Operational Impacts.

Summary Digby Rest of NS Total NS Canada

Initial Expenditures $44.27M $0.00 $44.27M $44.27

Total Economic Effects

Employment (person-year) 113.1 137.6 250.6 347.6

Gross Domestic Product $26.08M $7.37M $33.45M $46.99M

Household Income $6.96M $5.01M $11.97M $19.99M

Government Tax Revenue $5.12M $7.46M

Federal Tax $2.62M $3.75M

Provincial Tax $2.50M $3.72M

8.1.1 Detailed Operational Impacts

The operation is expected to create a total of 251 jobs (person-to-year) in the Province, including 70 in

direct employment (person-years), 84 in indirect employment (person-years), and 49 in induced

employment (person-years) (Figure 2).

70

.0

-

70

.0

28

.7 5

5.2

83

.9

14

.3 35

.0

49

.3

11

3.0

5

13

7.5

8

25

0.6

3

-

50.0

100.0

150.0

200.0

250.0

300.0

Digby Rest of NS Total NS

Per

son

-Yea

rs

Figure 2. Employment (Person-Years)

DIRECT INDIRECT INDUCED TOTAL


17


Contribution to the Province’s GDP of around $33.5 million are expected, including $22.7 million in direct

GDP, $6.1 million in indirect GDP, and $4.7 million in induced GDP (Figure 3).

Total household income in the Province is projected to increase by $12 million, with $4.6 million in direct

household income, $4.3 million in indirect household income, and $3.1 million in induced household income

(Figure 4).

$4

,59

5,5

44

$0

$4

,59

5,5

44

$1

,28

5,2

35

$3

,02

8,1

01

$4

,31

3,3

36

$1

,07

9,3

76

$1

,98

3,4

51

$3

,06

2,8

27

$6

,96

0,1

55

$5

,01

1,5

79

$1

1,9

71

,73

4

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000


Do

llars

(C

DN

)

Figure 4. Household Income (Millions)


$2

2,6

99

,97

9

$0

$2

2,6

99

,97

9

$1

,69

9,3

33

$4

,36

8,7

87

$6

,06

8,1

20

$1

,68

1,7

47

$3

,00

1,8

97

$4

,68

3,6

44

$2

6,0

81

,05

9

$7

,37

0,6

83

$3

3,4

51

,74

3

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000


Do

llars

(C

DN

)

Figure 3. Gross Domestic Product (millions)



18


Government tax revenues for Nova Scotia are expected to increase by $5.1 million, with $2.9 million in direct

government tax revenues, $1.0 million in indirect government tax revenues, and $1.2 million in induced

government tax revenues (see Figure 5 below). When considering provincial and federal revenues

separately, provincial tax revenues of $2.5 million, and $2.6 million in federal tax revenues are expected

(Figure 6 and Figure 7).

$2

,89

1,9

46

$2

,89

1,9

46

$1

,00

3,8

47

$2

,31

6,3

15

$1

,22

4,3

09

$2

,25

3,5

98

$5

,12

0,1

01

$7

,46

1,8

59

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

Total NS Canada

Do

llars

(C

DN

)

Figue 5. Government Tax Revenues (Millions)


$1

,22

6,2

53

$1

,22

6,2

53

$5

21

,27

4 $1

,13

5,5

86

$7

52

,26

2 $1

,35

3,7

55

$2

,49

9,7

89

$3

,71

5,5

94

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Total NS Canada

Do

llars

(C

DN

)

Figure 6. Provincial Tax (Millions)



19


8.2 Overview of Construction Impacts The project economic impact is expected to go beyond operational impacts as new facilities will be required.

Estimated direct and spin-off impacts on Nova Scotia resulting of Cermaq’s one-time only construction

investment of over $132 million in the Digby area include:

◼ 1,025 person years in direct and spinoff employment.

◼ $110.7 million in total GDP.

◼ $83 million in total household income; and

◼ $21.8 million in total government tax revenues through $10.3 million in total federal tax, and $11.5

million in total provincial tax.

A summary of construction impacts is presented in Table 2.

Table 2. Summary of Construction Impacts

Summary Digby Rest of NS Total NS Canada

Initial Expenditures $132.2M $0.00 $132.2M $132.2M

Total Economic Effects

Employment (person-year) 553 472 1,025 1,458

Gross Domestic Product $70.8M $40.0M $110.7M $152.2M

Household Income $55.5M $27.2M $82.7M $109.2M

Government Tax Revenue $21.8M $29.4M

Federal Tax $10.3M $13.9M

Provincial Tax $11.5M $15.5M

$1

,66

5,6

92

$1

,66

5,6

92

$4

82

,57

2 $1

,18

0,7

29

$4

72

,04

7

$8

99

,84

3

$2

,62

0,3

12

$3

,74

6,2

64

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Total NS Canada

Do

llars

(C

DN

)Figure 7. Federal Tax (Millions)



20


8.2.1 Detailed Construction Impacts

Construction is expected to create 1,025 jobs (person-years) in the Province, including 369 in direct

employment (person-years), 364 in indirect employment (person-years), and 293 in induced employment

(person-years) (Figure 8).

A contribution of $110.72 million in total GDP for Nova Scotia is expected, with $53.63 million in Direct

Gross Domestic Product, $28.88 million in indirect GDP, and $28.22 million in induced GDP (Figure 9).

36

8.9

-

36

8.9

95

.7

26

8.0

36

3.7

88

.6 2

04

.0

29

2.6

55

3.2

47

2.0

1,0

25

.2

-

200.0

400.0

600.0

800.0

1,000.0

1,200.0


Per

son

-Yea

rs

Figure 8. Employment (Person-Years)


$5

3,6

25

,43

3

$0

$5

3,6

25

,43

3

$6

,26

1,0

52

$2

2,6

21

,73

4

$2

8,8

82

,78

6

$1

0,8

14

,54

4

$1

7,4

00

,48

6

$2

8,2

15

,03

0

$7

0,7

01

,02

9

$4

0,0

22

,22

0

$1

10

,72

3,2

49

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000


Do

llars

(C

DN

)

Figure 9. Gross Domestic Product (Millions)



21


Total household income in the Province is projected to increase by $82.72 million, with $44.27 million in

direct household income, $20.26 million in indirect household income, and $18.19 million in induced

household income (Figure 10).

Government revenues of $21.75 million are expected, with $9.35 million in direct government tax revenues,

$4.73 million in indirect government tax revenues, and $7.67 million in induced government tax revenues

(Figure 11).

$4

4,2

72

,00

0

$0

$4

4,2

72

,00

0

$4

,58

9,6

17

$1

5,6

73

,46

7

$2

0,2

63

,08

4

$6

,67

3,7

20

$1

1,5

13

,69

8

$1

8,1

87

,41

8

$5

5,5

35

,33

8

$2

7,1

87

,17

0

$8

2,7

22

,50

8

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000


Do

llars

(C

DN

)

Figure 10. Household Income (Millions)


$9

,35

4,9

16

$9

,35

4,9

16

$4

,72

7,5

55

$8

,31

7,2

07

$7

,67

1,6

66

$1

1,6

88

,14

7

$2

1,7

54

,13

7 $2

9,3

60

,27

0

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

Total NS Canada

Do

llars

(C

DN

)

Figure 11. Government Tax Revenues (Millions)



22


The province is expected to receive $11.46 million in provincial tax, while the federal government will receive

$10.30 million in federal tax revenues (Figure 12 and Figure 13).

$4

,96

0,6

83

$4

,96

0,6

83

$2

,40

1,3

56

$4

,29

7,5

46

$2

,93

4,8

77

$4

,64

8,3

77

$1

0,2

96

,91

2 $1

3,9

06

,60

3

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

Total NS Canada

Do

llars

(C

DN

)

Figure 13. Federal Tax (Millions)


$4

,39

4,2

33

$4

,39

4,2

33

$2

,32

6,1

99

$4

,01

9,6

61

$4

,73

6,7

89

$7

,03

9,7

70

$1

1,4

57

,22

0 $1

5,4

53

,66

1

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

Total NS Canada

Do

llars

(C

DN

)

Figure 12. Provincial Tax (Millions)



23


9 OBSERVATIONS The level of operational and construction employment demand, particularly in Digby NS, is very significant

and should be encouraging to residents, municipal, and provincial leaders alike, including those tasked with

providing career services. In general, the demographic challenges in Nova Scotia are considerable. The

population is older and outmigration from rural areas continues to erode the labour force in these

communities: Digby County is experiencing these challenges more acutely than the rest of NS. This

development will help address this worrisome trend.

As the Digby region already has an active aquaculture supply chain and Cermaq’s added demand on this

supply chain will diversify the customer base and has the potential to have a catalytic impact on scaling up

this supply chain. However, challenges are inevitable. The industry is relatively new in the Atlantic region,

especially when compared to traditional sectors. The case studies illuminate that public perception of safety,

environmental stewardship, and benefit is deeply influenced by resident’s awareness/understanding or lack

thereof of sector operations, global food supply and access. Perceptions are also shaped by individual's

understanding of their connection to the aquaculture benefits. Accordingly, strong communication, sector

leadership and industry champions will be critical in debunking myths.

Recent global events illuminate the vulnerability of many sectors to disruptions in market access. While

disruptions may be short term, the area’s lucrative lobster fisheries have been significantly impacted by

COVID-19. This contributes to the case for greater sectoral diversification and is a selling feature of the

growth of this sector.

Cermaq offers a compelling and principled value proposition for host communities. Now more than ever,

communication needs to be augmented with plain language metrics like jobs and income. The high interest

in ocean sectors and the innovation agenda offers Cermaq an opportunity to underscore its important role

within the regional and provincial economy as both a large export focused employer, as well as a proven

innovator aligned with the imperative to advance STEAM occupations and entrepreneurship. Cermaq should

continue to promote its value proposition and importance to economic development leaders, especially

those involved in investment attraction and business retention.

The leadership in advancing this study underscores the critical importance of tracking economic benefits

and communicating the positive contribution of the industry over time. Accordingly, estimates established

during this study can become benchmarks against which progressive community benefits are tracked.


24


Finally, it is not very often that an external company seeks to invest over $500 million to start a high-tech

processing and manufacturing operation in Nova Scotia. More recently, large scale projects have been, first

and foremost, public sector driven, followed by those that are industrially focused. Relatively few larges

scale projects are private sector led and, in comparison to oil and gas developments or specific projects like

the National Shipbuilding Strategy, the leakages (spending outside the region) associated with Cermaq’s

contemplated investment are remarkably low.

By way of comparison, cumulative expenditures in Nova Scotia from the Sable Offshore Energy Project since

it was sanction in 1998 total $3,135.1 million – about 40.9% of the overall project expenditures. In contrast,

virtually all Cermaq’s expenditures will accrue in NS (90%).

The economic impact within Nova Scotia is greatly enhanced because the province, and the Digby area

specifically, already have the developed supply chain to build processing plants, manufacture cages,

anchors, boats, floats, and the like: items that are needed to build and operate this industry. As well, from a

labour perspective, the region has the history and provenance in harvesting and food processing

occupations. With some planned training, the transition to operate a state-of-the-art aquaculture facility in

Digby will be straightforward. As both Cermaq and local sector participants refine operations and methods

in Digby, NS’ economy will be in a position to leverage even more of the benefits as other proposed sites

come on stream.


25


ANNEX A: DEFINITIONS The three types of economic impacts discussed in this report are defined as follows:

◼ Direct Impacts/Effects – These consider production, income, employment, taxes and spending

on goods and services associated with the direct operation of the Cermaq Project or the direct

spending on construction. They include employees, contractors, service providers and others

directly involved in, for example, providing equipment related to the farming operations,

modifications, building the hatchery, among the direct purchases. This includes, for example,

individuals employed by the project.

◼ Indirect Impacts/Effects – These are the production, income, employment, tax, resource or

environmental changes in backward linked industries (i.e., those that supply the operators who have

service contracts for aquaculture equipment). One example is the impacts associated with suppliers

to the operation and, in turn, the suppliers of these suppliers (i.e., the fuel suppliers, mechanics,

contract engineers).

◼ Induced Impacts/Effects – These are the changes in household spending brought about by the

shifts in household incomes of workers either directly employed by the aquaculture operation or

indirectly employed by suppliers. Specifically, these are the impacts stemming from employees

spending their wages and salaries on goods and services in support of their own households, in

short, these capture household spending.

The propriety I-O model employed by GATN identifies the following economic impacts:

◼ Employment – The impact on employment is measured in person years (where a person year is

equal to 2,000 hours and defined as a full-time equivalent position - FTE). FTEs are calculated based

on annual wages and salaries and on an industry-by-industry basis, for each area being assessed.

◼ Household Income – The impact on wages and salaries associated with person years of

employment (FTEs).

◼ Gross Domestic Product (GDP) – One of the more important outputs from the I-O model,

changes in GDP at market prices are an important consideration. Being the monetary value of all

goods and services generated within the aquaculture operations and the associated spending, GDP

is the most direct and readily evident economic impact.

◼ Tax Effects/Impacts – These are the estimated changes in federal and provincial taxation

stemming from economic activity relating to the spending.


26


ANNEX B: LIMITATIONS This report was prepared by Group ATN Consulting Inc. (GATN) for Cermaq Canada in accordance with the

professional services agreement GATN entered into with Cermaq.

The disclosure of any information contained in this report is the sole responsibility of Cermaq.

The material in it reflects GATN’s best judgement considering the information available to it at the time of

preparation.

Any use which a third party makes of this report, or any reliance on or decisions to be made based on it,

are the responsibility of such third parties.

GATN accepts no responsibility for damages, if any, suffered by any third party as a result of decisions made

or actions based on this report.

This limitations statement is considered part of this report.

The original of the technology-based document sent herewith has been authenticated and will be retained

by GATN for a minimum of ten years.

Since the file transmitted is now out of GATN’s control and its integrity can no longer be ensured, no

guarantee may be given with regards to any modifications made to this document.

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