State of the Industry from a Canadian perspective March, 2009
Transportation and Trade Canada is a small, open economy Gross National Product: Billions of dollars G8 Nations Total G8 = $28,785 Billions of US dollars Total G8 = $29 trillion US $13,446 UK $2,201 Russia $766 France $2,106 Canada: US $1.1 trillion Canada $1,130 Source: IMF Japan $4,571 Italy $1,766 Germany $2,797
Transportation and Trade reliant on trade 1 Percent of GDP Canada has 2 nd highest reliance on international trade 0 40.2% 37.7% 0 27.2% 26.1% 26.1% 0 0 12.5% 10.2% 0 Germany Canada Italy France UK Japan US Source: DFAIT
Manufacturing in Canada Two-thirds of Canada s goods & services are exported 55% of total manufacturing output is exported over 50% is sold into or through the United States Nearly 45% of all manufactured goods purchased in Canada are imported from the U.S. Foreign investment accounted for half of all capital investment in Canadian manufacturing in 2006.
Manufacturing in Canada Canada: Manufacturing Shipments 55 50 Billions of Dollars 45 40 35 30 25 20 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Canadian Manufacturers & Exporters, 2008
Canada s Economy in Recession GDP is expected to decline in 2009 The global financial crisis is reflected in declines in commodity prices, stock prices, and house prices Exports and investment are falling, while consumer and government spending are rising.
Ontario and Toronto market
Greater Toronto Area Greater Toronto Area is 5th largest urban region in North America Name of City Los Angeles New York Chicago Washington Toronto Philadelphia Atlanta Population 9.6 million 9.1 million 8.3 million 5.8 million 5.3 million 5.0 million 4.3 million (Source: Greater Toronto Marketing Alliance, 2006)
Ontario s Economy Ontario s Gross Regional Product (GRP) is comparable to the Gross Domestic Products (GDP) of notable countries Toronto GRP/GDP (millions of USD dollars) Source: Ministry of Finance and the World Bank, 2006
Greater Toronto Area GTA generates 20% of Canada s GDP 15.5 % of Canada s businesses are located in the GTA 40% of Canadian business head offices are located in the GTA Toronto provides employment to 2.8 million people or 18.2% of all employed Canadians
Toronto s Key Industries Biomedical & Biotechnology Canada's largest biotech cluster, the fourth largest in North America and among the top 10 in the world. Advanced Manufacturing generates $20 billion of annual output. Aerospace Industry Automotive Manufacturing Chemical Manufacturing
Supply Chain Challenges
Global Outsourcing Location of LCCS (current, as % of total sourcing) Firms 0 20 40 60 80 100 China India Asia (excluding China and India) Mexico South and Central America Eastern Europe 1-10% 10-20% 20-50% >50% Source: Canada. Industry Canada. Low Cost Country Sourcing: A Canadian Pharmaceutical Perspective. Supply Chain & Logistics Association Canada, September 2007
On-time Delivery of Shipments Firm s 0 20 40 60 80 100 Canadian Products US Products Products from LCCS Source: Canada. Industry Canada. Low Cost Country Sourcing: A Canadian Pharmaceutical Perspective. Supply Chain & Logistics Association Canada, September 2007
Air Cargo at Pearson
Five runways High efficiency dual taxiway system State-of-the-art deicing facility 24/7 operations CAT IIIA capability Strategic location along major highways
World Class Air Cargo Facilities 1. Cargo East (Vista): 318,000 sq. ft. of warehouse Dedicated cargo apron Multi-user complex 2. Cargo West (Infield): 566,000 sq. ft. of warehouse Dedicated cargo apron Multi-user complex 3. Cargo North (FedEx): 345,000 sq. ft. of warehouse Dedicated cargo apron space
Freighter Platform State of the art cargo handling facilities Live animal centre 24/7 Canada Customs Dedicated cargo apron
Current Freighter Airlift at Pearson
Air Cargo Activity in Canada Air Cargo Volumes in Canada 2007 600,000 500,000 400,000 Metric Tonnes 300,000 200,000 100,000 0 Ottawa Moncton Halifax Edmonton Hamilton Calgary Winnipeg Vancouver Montreal Toronto Source: Airport data
Air Cargo Activity in North America Toronto (YYZ) Chicago (ORD) New York (JFK) Los Angeles (LAX) Miami (MIA) Pearson Airport is the leading airport in Canada for air cargo throughput but is far behind the leading North American Gateways
Gateway Benchmark
Infrastructure and Facilities Airport 2007 Total Freight (metric tonnes) Number of commercial length runways Air Cargo Facilities Warehouse (sq. ft) Air Cargo Facilities Ramp (sq. ft) Aggregate cargo building utilization (tons per sq. ft) YYZ 512,000 5 1,229,000 2,502,600 0.42 JFK 1,595,577 4 4,100,000 3,100,000 0.39 ORD 1,524,419 6 2,615,000 2,900,000 0.58 (a) Includes passenger airlines destination, all-cargo freighter capacity, and integrated carrier activity (b) Includes total available warehouse space and utilization ratios (c) Includes access to customs agents, average clearance time, overall activity levels, split facilities, on-site FTZ (d) Includes airport landing fees, incentive programs, warehouse rental rates (where applicable)
Connectivity and Agency Services Airport Distance to connecting transport (a) On-site customs & agriculture inspections FTZ Access Average clearance time required (Inspection) Average customs clearance time required YYZ 2, 8, 16, 16 Yes No Variable 1 hour JFK 2, 2, 16, 16 Yes Yes 1 hour 1 hour ORD 3, *, 3, 5 Yes Yes 1 hour 1 hour * - Indicates that facilities are on airport property. (a) Numbers, in order, are distance, in km, to major highway, truck terminal, major water port (inland), intermodal centre. Source : Jacobs Consulting
Comparison of competing gateways Airport Existing service by air carriers (a) Runways (composite of number and length) Existing facilities capacity (b) Land availability Intermodal access Customs and operating environme nt (c) Cost (d) YYZ 3 2 2 1 2 1 3 JFK 1 3 1 3 3 3 2 ORD 2 1 3 2 1 2 1 (a) Includes passenger carrier, all-cargo carrier and integrated carrier activity (b) Includes total available warehouse space and utilization ratios (c) Includes access to customs agents, average clearance time, overall activity levels, split facilities, (d) Includes airport landing fees, warehouse rental rates and other associated costs to air cargo Rankings with 1=Best, 2=Second Best, etc. Source : Jacobs Consulting
Comparison of competing gateways Landing Fees - B747-400F $15,000.00 Cost (USD) $10,000.00 $5,000.00 $0.00 New York - JFK Chicago - O'Hare Toronto Pearson January 2008
Reduced Landing Fees Landing Fee Comparison $15,000.00 $12,000.00 Cost $9,000.00 $6,000.00 $3,000.00 $0.00 Toronto Pearson - 2008 Toronto Pearson - 2009 25% reduction in landing fees for all-cargo aircraft exceeding 50,000kgs of MTOW
The Canadian Loonie 110 100 90 80 70 60 50 40 After soaring 60% from late 2002 to late 2007, the Canadian dollar has retreated 20% 30 1993 1998 2003 2008 (U.S. cents per Canadian dollar, quarterly averages)
For more information, please contact: Mark Ruel Senior Manager, Cargo & Aviation Support Greater Toronto Airports Authority Toronto Pearson International Airport PO Box 6031, 3111 Convair Drive Toronto AMF, Ontario, Canada L5P 1B2 Tel: 1-416-776-4231 Fax: 1-416-776-5528 Email: mark.ruel@gtaa.com