The commercial real estate sector (CRE Sector) makes a substantial contribution to the Canadian economy, generating $63.3 billion in economic activity in 2011, according to a ground-breaking new research report from the Real Property Association of Canada (REALpac) and the NAIOP Research Foundation. To put this value into perspective, the economic activity of the Canadian CRE Sector is more than twice as large as the entire economy of the province of Newfoundland & Labrador. The CRE sector adds to the Canadian economy in various ways by:
- Supporting 340,000 jobs, many of which are high-paying professional jobs, which is roughly equivalent to the total employment in the entire Canadian agriculture industry;
- Generating $18.1 billion in personal income, related to labour income and other sources of income, which is more than twice the labour income of the Canadian agriculture, forestry, and fishing industries combined;
- Generating $12.5 billion in corporate profits earned by many small and medium companies, as well as some of the largest pension funds and insurance companies in Canada;
- Contributing $7.2 billion in personal and corporate income tax revenues for the federal and provincial governments; and ultimately,
- Accounting for $32.4 billion in total net contribution to Canada’s GDP, which is more than the total GDP of New Brunswick.
Prepared by Altus Group Economic Consulting, “The Contribution of the Commercial Real Estate Sector to the Canadian Economy” shows that capital investment in the CRE Sector totalled some $21.6 billion in 2011, accounting for about half of the total spending in Canada on non-residential construction. Some $14.9 billion was spent on new buildings; the rest ($6.7 billion) accounted for capital improvements, renovations and the upgrading of existing buildings.
The on-going operations of CRE Sector buildings also generated $3.5 billion in building management fees and almost the same amount for commercial brokerage fees from sales of commercial properties in 2011.
The CRE Sector also generates an array of other benefits to the national economy such as the promotion of economic development and accommodation of employment growth. In addition, properties owned by the CRE Sector provide substantial revenue to municipalities and school boards across Canada through realty taxes.
The CRE Sector plays an important role in Canada’s economy and the quality of life for all Canadians. Development and construction of commercial real estate buildings, and subsequently their daily operations, creates directly thousands of jobs and adds tremendous value to the Canadian GDP. Beyond the strict numbers of economic activity, spinoff benefits, jobs created, income earned and taxes generated, the CRE Sector is also responsible for imparting a tremendous benefit to communities across Canada by providing high-quality workspaces for millions of Canadians.