News Release

FOR IMMEDIATE RELEASE

December 13, 2004

Study Reviews Impact of Federal Economic Development Funding

Sydney, NS –– Enterprise Cape Breton Corporation (ECBC) and the Cape Breton Growth Fund (CBGF) announced today the results of a recently completed study entitled Economic Impact of Federal Development Assistance on Cape Breton Island.

The study focussed on the effects of federal development funding on the Island’s economy from 1999 to 2004 and was completed by Mike Foster (Ph.D Economics) of Canmac Economics, a private Nova Scotia consulting firm.

The findings illustrate that economic indicators are showing solid improvement as evidenced by increasing retail sales, growing income from employment sources and a decreasing economic dependency ratio. In the past five years, ECBC and the CBGF have partnered with the private sector and others to create over 6,000 full-time job equivalents. Through programs administered by ECBC and the CBGF, over $181 million has been invested in the Island’s economy in the last five years. This has resulted in a total investment of over $783 million.

“When viewed over the long-term, the Cape Breton economy is showing steady improvement,” says Rick Beaton, Vice-President of ECBC and Chairman and CEO of the CBGF. “In 1993, the unemployment rate stood at 25.3%, whereas the annual average for 2004 is expected to be just above 16%. Although much work remains to be done, the indicators show we are making progress. The Island has begun a process of transformation and is well positioned for continued improvement.”

In a joint statement, MPs Rodger Cuzner (Cape Breton-Canso) and
Mark Eyking (Sydney-Victoria) said that the study clearly demonstrates that Government of Canada economic development programs are having a positive impact, laying the groundwork for greater prosperity and opportunity.

Some of the findings from the Economic Impact study for the
1999/2000-2003/2004 period include:

• Total job creation over the five year period generated by development programs delivered by ECBC totaled 9,384 full-time equivalents (FTE). This is comprised of:
- 6,339 (FTE) direct employment from sustainable activity;
- 1,235 (FTE) direct employment from short-term job creation (primary construction); and
- 1,809 indirect and induced spin-off employment.

• A total of $667.1 million of labour income was provided to Cape Breton households or $133.4 million/year, on average.

• Economic development assistance is responsible for an additional
$1,201.4 million in GDP or $240.3 million/year, on average.

• Increase of $91.2 million in federal revenues or $18.2 million/year and an estimated EI savings of $30.6 million/year, on average.

• An increase of $84 million in provincial revenues or $16.8 million/year, on average.

• An increase of $10.8 million in municipal revenues or $2.2 million/year, on average.

• By 2008-2009, it is projected that the benefits to all levels of government will total over $540 million, which would not have been possible without Government of Canada economic development assistance. This figure does not include EI savings.

• With regard to population levels, it is estimated that over the five-year period of the study, the Island’s population would have further declined by more than 12,000 people without Government of Canada economic development assistance.

For more information, copies of the study can be obtained directly from ECBC, or online at www.ecbc.ca.

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FOR BROADCAST USE ONLY:

THE RESULTS OF A RECENTLY COMPLETED STUDY ENTITLED ECONOMIC IMPACT OF FEDERAL DEVELOPMENT ASSISTANCE ON CAPE BRETON ISLAND WERE RELEASED BY ENTERPRISE CAPE BRETON CORPORATION AND THE CAPE BRETON GROWTH FUND.

THE STUDY, COMPLETED BY CANMAC ECONOMICS, SUGGESTS THAT ECONOMIC INDICATORS ARE SHOWING IMPROVEMENT AS EVIDENCED BY INCREASING RETAIL SALES, GROWING INCOME FROM EMPLOYMENT SOURCES AND A DECREASING DEPENDENCY RATIO.

IN THE PAST FIVE YEARS, ECBC AND THE CBGF HAVE PARTNERED WITH THE PRIVATE SECTOR AND OTHERS TO CREATE OVER 6,000 FULL-TIME JOB EQUIVALENTS. OVER $181 MILLION HAS BEEN INVESTED IN THE ISLAND OVER THE LAST FIVE YEARS RESULTING IN A TOTAL INVESTMENT OF OVER $783 MILLION.

COPIES OF THE STUDY CAN BE OBTAINED FROM ECBC, OR ONLINE AT WWW.ECBC.CA.

FOR ADDITIONAL INFORMATION CONTACT:

D.A. Landry
Director of Communications, ECBC
(902) 564-3617