The Real Property Association of Canada (REALpac) estimated that the contributions of the retail real estate sector to the Canadian economy in 2013 was a healthy sum of $18.3 billion.
The REALpac study titled, Contributions of the Commercial Real Estate Sector to the Canadian Economy, recently highlighted the substantial influence of the office sector on the economy, but the retail sector—from shopping centres and theatres to restaurants and cultural centres—is no slacker.
Part of its lofty contribution is from $6.9 billion in capital investments. The majority of this total—$4.7 billion to be exact—was spent on new construction, with $2.2 billion focused on renovations and upgrades. Sales and leasing from these ongoing operations generated about $2 billion from building management fees and commercial brokerage fees.
Despite investments declining about $700 million compared to those in 2012, this industry continues to support thousands of flourishing work opportunities.
On the job front, an average employee in the sector is expected to earn more than $61,000 per year, while the average wage is highest in Alberta (approximately $73,165 per year) and lowest in Atlantic Canada.
Overall, $6 billion in personal income is generated among an estimated 97,000 jobs, many of which are high-paying professional positions.
From this, federal and provincial governments receive about $2.2 billion in personal and corporate income tax revenues, mainly dispersed through new builds.
By region, Ontario’s capital investments in retail property was highest in 2013 at $2.8 billion—40 per cent of Canada’s total.
However, over the past five years, Manitoba and Saskatchewan have experienced the highest increase in retail investments at an annual rate of 9.5 per cent, while British Columbia’s investment in the sector declined at 5.7 per cent.
In 2013, activities within the retail sector also generated high profits for Canadian companies, both small and large. From a total $3.9 billion profit, Ontario produced the most, followed by Quebec and B.C.
Ontario is also the largest generator of direct economic activity within the sector at $3.7 billion, followed by Quebec at $1.6 billion. Alberta and B.C. made similar contributions around $1.3 billion.
In terms of construction spending, Ontario’s gross domestic product (GDP) benefits the most from the sector. Generated activities added $4 billion to the provinces’ and Canada’s GDP, followed by Quebec.
For additional information on economic benefits of the retail real estate sector by region, the REALpac study can be found here.