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Jim Durrell - 2004 Economic Impact Study Results - September 9, 2004

An allocution by Jim Durrell, Chairman of the Board

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Good morning, bonjour.

Thank you for joining us this morning as we share the results of the Airport’s 2004 economic impact study.

Operations at the Ottawa International Airport were turned over to the newly established Authority in February of 1997 with a clear mandate - to manage, operate and develop airport facilities and lands in support of the economic growth of the National Capital Region.

Three major goals were identified for our first six years that would improve operations and position the airport for considerable future growth.

The first was to open new routes. The establishment of a U.S. pre-clearance facility in 1997 paved the way for flights that would not otherwise have been scheduled from Ottawa.

The very presence of this facility contributed to the success of the high technology sector with easy access to critical markets in the U.S.

Our next goal was to protect both our fixed and operational assets.

Our award-winning Combined Services Building which opened in 2000 provided a much needed home for our Fire Department and heavy equipment maintenance operations.

Lastly, we recognized that the gateway to our communities was not only operating beyond its capacity, but was also tired and inefficient to operate.

In October of last year, we opened the new Passenger Terminal Building, which doubled the space of the old terminal, and increased the available capacity to 5 million passengers per year.

All of these projects had a profound impact on the economic health of the region – both in terms of the jobs that were created, and through the growth of the aviation business in and out of Ottawa.

There are 14 major scheduled carriers who operate from the Ottawa International Airport, providing service to over 30 different cities in North America and the U.K.

There are also 90 additional companies who conduct business at the Airport, and many others who provide service to the Airport.

In terms of jobs, the Airport accounts for approximately 4,207 direct jobs in the local economy on an annual basis, which equates to 3,914 full time equivalents.

This represents a 13% increase since we last studied the economic impact in 2000.

The average annual wage for these jobs is $37,500, which is an impressive 20% higher than the Canadian average, and which makes the total direct wage bill for the airport $147 million.

When you consider multiplier effects, the Ottawa Airport operation creates an additional 4,615 additional indirect and induced jobs for a total of 8,529 jobs in the community, and total wages of $283 million.

Induced and indirect jobs include jobs that are generated as a result of the business of the airport, such as hotels, restaurants, and retail outlets that receive the benefit of the business and leisure travellers who visit the region and increase employment as a result.

The impact of these jobs does not stop at the paycheques that are issued – the effect goes well beyond; these employees are also spending money in the community.

When you tally it up, the Direct Economic Output of the entire employment base is $541 million annually, or nearly $1.5 million per day.

Even more impressive is the total Economic Output attributable to the airport, including the indirect and induced elements of employment, which amounts to $1.06 billion annually, or just under $3 million per day.

As I am sure you have heard representatives of the Authority say in the past that we do not benefit from any government subsidies whatsoever.

We do however contribute to the tax base of every level of government.

Jobs and wages translate into $30.1 million in personal income taxes and $7.3 in retail taxes.

The Airport Authority itself remitted $3.4 million in payments in lieu of taxes to the municipality and $11.3 million in rent to the federal government.

As such, the total tax contribution resulting from Airport operations in 2003 was $52.1 million

The Gross Domestic Product effect of the Ottawa International Airport is a measure of the value added by the airport’s direct and indirect activities.

Using transportation industry multipliers based on output, the economic activity associated with the Airport contributes $210.9 million in direct value-added wealth creation to Ontario ’s GDP, and $357.8 million in total GDP including indirect and induced effects.

With more than 3,900 full time jobs associated with the operation of the airport complex and over half-a-billion dollars in direct output, the Ottawa Airport is a powerful economic generator for the Region.

The impressive numbers that I have shared with you are due to the efforts of the entire airport community.

On behalf of the Board of Directors, I would like to congratulate the Airport Authority team, the airport tenants, their suppliers, and all of the businesses who support the airport.

We look forward to working together with all of our partners towards continued growth and more good news in the years to come.

Thank you, merci.