By Mark Brooks and Ted Nickerson
It can safely be anticipated that the new Pickering Airport planned for Durham Region will have an economic impact far beyond its cost. The return for the $2.8 billion construction cost for phase 1 (including $600 million in public service and infrastructure investment) far outstrips the cost.
Using comparable case studies of other airports, the new airport at maturity should create 16,000 direct Jobs and 30,000 – 60,000 indirect jobs. It will create at least $13 billion in annual economic activity and $500 million in income taxes. Built to handle 16 million passengers by 2040, the airport could be expanded to handle double the passengers in the future when needed.
Pickering Airport will be one of the largest job creation engines in Durham Region when it opens, on a par with the GM plant in its heyday. But how do we put numbers to this new economic engine once it is operational?
Jobs created by an airport come in two distinct groups. The first are those created by the airport directly, located “inside the fence” from direct operation of the airport, airlines, and supporting business such as fuel services and snow clearing. The second wave of jobs are indirectly created “outside the fence” by the “Catalytic Effect” as travellers move through the host economy. This indirect job creation will be enhanced by an innovation corridor south of the airport.
There is a proven relationship between airline connections and a city’s ability to attract domestic and foreign direct investment. High-technology production and knowledge-intensive services are attracted by strong airline connections.
Jobs created by trade and investment are enabled by a robust transportation infrastructure. From new start-ups to global conglomerates, companies will migrate to the region to take advantage of the new locally-accessible aviation infrastructure, allowing Durham Region to connect directly to the world.
A valid method to estimate job creation uses industry standard metrics. Described by Richard Klophaus in a study linking employment to airport passenger volumes, this process analyses the employment created by dozens of airports. It predicts the creation of 1,000 direct jobs for every 1 million passengers and a 2 to 3 times multiplier for indirect jobs, i.e. an additional 1000 to 2000 indirect jobs for every 1 Million passengers.
This is validated when looking at nearby Pearson Airport and its 2016 economic impact study. Pearson moved 44.3 million passengers in 2016, creating 50,000 direct jobs (representing1129 jobs for every 1 million passengers served). Pearson is at the heart of Canada’s second largest employment zone with a total of 332,000 direct and indirect jobs attributed to the airport, generating $42 billion in economic output, accounting for 6.3% of Ontario’s GDP. Since Pickering Airport expects to eventually handle 33% of Pearson’s passenger volume, one could reduce these numbers to one third, resulting in 16,600 direct jobs, 110,000 total jobs and $14 billion in economic output.
Another authoritative source of validation for these numbers comes from “The Economic Impact of the Air Transportation Industry”, a report from the Canadian Airports Council. This points to Pearson’s numbers actually being higher than the industry standard, but to be conservative, let’s stay with the average. Using this metric, Pickering Airport is predicted to create 16,000 direct and 32,000 indirect jobs for a total of 48,000 by 2040.
Durham Region is projected to develop further on an east-west axis along the 407 Highway, thus providing easy access to the new airport. Easy rail access on the airport site will enable both new VIA and Go Train service. The new investments and jobs created by Pickering Airport will attract new residents, building on the region’s tradition as a cosmopolitan, diverse and open-minded community.
Some of the public infrastructure investments, essential to support the new airport, are already under way. These include a new intersection on Highway 407, and agreements for Seaton developers to upsize utilities and services being built in the Seaton subdivision to support the full economic development of the Federal airport lands.
The jobs and economic activity created by Pickering Airport are poised to transform the region!