2017 Tim Hortons Brier St John’s, Newfoundland & Labrador Economic Impact Assessment October, 2017 CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 2 Contact Tony Fisher Canadian Sport Tourism Alliance www.canadiansporttourism.com Contents • Summary: 2017 Tim Hortons Brier • Background & Methodology • Detailed Findings • Economic Impact Results • Appendices CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 3 Summary: 2017 Tim Hortons Brier Curling Canada’s Men’s curling championships, the Tim Hortons Brier, was hosted at Mile One Centre in St. John’s, Newfoundland from March 4-12, 2017. The event was a tremendous success with all draws being full sold out. Moreover, the hometown crowd witnessed the province’s own Brad Gushue win his first championship in 13 Brier appearances. The spending of out of town spectators and participants at the 2017 Tim Hortons Brier, in combination with the expenditures made by the organizers in hosting the event totaled $7.2 million, supporting $10.1 million in economic activity in Newfoundland including $9.1 million of economic activity in St. John’s. These expenditures supported $3.4 million in wages and salaries in the province through the support of 56 jobs, of which 46 jobs and $2.7 million in wages and salaries were supported in St. John’s. The total net economic activity (GDP) generated by the 2017 Tim Hortons Brier was $6.2 million for Canada as a whole; $5.2 million for Newfoundland and $4.0 million in St. John’s. The 2017 Tim Hortons Brier supported tax revenues totaling $2.2 million for Canada as a whole. Broken out by level of government, the event supported federal tax revenues of $839,000 with an additional $1.0 million in taxes accruing to Newfoundland & Labrador. Moreover, $190,000 in municipal taxes were supported in the province, of which $143,000 was in St. John’s. 2017 Tim Hortons Brier by the Numbers 122,600 total attendance 4,300 out of town spectators travelled to St. John’s $3.9 million in visitor spending directly attributable to the Brier $2.7 million in wages and salaries supported in St. John’s 46 St. John’s jobs supported by the Brier $5.2 million boost to provincial GDP $10.1 million in economic activity in Newfoundland & Labrador $2.2 million in taxes supported across Canada CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 4 Background The 2017 Tim Hortons Brier was hosted at St John’s Mile Once Centre from March 4-12, 2017. A total of 15 teams competed over 22 draws, with Newfoundland & Labrador’s own Brad Gushe and his teammates Geoff Walker, Brett Gallant and Mark Nichols being crowned the champion in front of the delighted home town crowd. The Brier was a tremendous success, with every draw being sold out and a total attendance of 122,592 spectators. The spending of out of town spectators, along with participants, the event organizers, and sponsors resulted in a considerable economic impact to the St. John’s and the province of Newfoundland & Labrador specifically as a result of hosting the event. Economic Impact studies measure the positive effects that festivals and events have on the economic activity in a specific region. They first calculate the amount of new money being spent in the host community as a direct result of holding the event, and then the impact these new monies have on the regional, provincial, and national economy as a whole.1 1 The Canadian Sport Tourism Alliance’s (CSTA’s) Sport Tourism Economic Assessment Model, Professional version (STEAM PRO 2.0) was used to generate the economic impact estimates detailed in this report. STEAM PRO, which was developed in 2006, is a model that has been designed to incorporate the results of primary data collected from event visitors and the budget / capital expenditures of event organizers and others to prepare economic impact assessments. The model, updated in 2017 is based on the Canadian Tourism Research Institute’s (CTRI - a branch of The Conference Board of Canada) TEAM model, which is the most widely used tourism economic impact model in Canada. The results of STEAM PRO 2.0 are fully consistent with the CSTA’s STEAM 2.0 model. A more detailed description of STEAM PRO 2.0 is contained within Appendix 1. CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 5 Methodology The visitor statistics used in this study were derived from an on-site intercept survey. The survey was conducted by trained Brier volunteers using tablet computers. The questionnaire was developed by the Canadian Sport Tourism Alliance in consultation with the event organizers. A total of 623 parties were intercepted with 479 agreeing to complete the survey. The survey asked questions regarding the respondent’s origin, the number of draws they were attending and various questions about their satisfaction with the event. Out of town spectators were asked a series of questions about their visit including length of stay and spending while in St. John’s. Visitor Origin & Volume A total of 122,592 spectators went to the Brier over the 22 draws of the competition. The total attendance was determined by first dividing the total attendance by the relative incidence of spectators in 4 categories: local residents (travelling under 40km), sameday visitors (those who returned to their primary residence every night), overnight visitors from Newfoundland and overnight visitors from outside the province. The attendance by origin was then divided by the average number of draws attended for each category (an overall average of 11.7 draws per person), which shows that 10,497 unique individuals attended the Brier. Nearly half of all seats were occupied by out of town residents (48%). With out of town spectators going to more draws than local residents, there were a total of 4,282 out of town spectators (41% of all individuals). Respondent Origin Local Total Attendance Draws per Person Individual Spectators 52% 63,208 10.17 6,215 5% 5,607 11.41 491 Newfoundland Overnight 17% 20,644 14.67 1,407 Out of Province 27% 33,133 13.9 2,384 100% 122,592 11.7 10,497 48% 59,384 13.9 4,282 Sameday Total Visitors CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 6 Visitor Spending – per person As noted, out of town spectators were asked about their visit to St. John’s. The typical day trip visitor made 4.2 day trips to St. John’s while overnight visitor spent an average of 8.0 nights in the city. Day trip visitor parties were comprised of 1.8 people, increasing to 2.2 people for overnight parties from Newfoundland and 2.5 people per party for out of province visitors. As noted, visitors were asked about their spending in Newfoundland. The typical sameday visitor spent $509 per person, or 120 per person per day. Overnight visitors from Newfoundland spent $694 per person or $87 per person per day while overnight visitors from out of province spent $1,310 per person or $163 per person per day. The large difference in spending was due to transportation costs as well as accommodation spending; most Newfoundland visitors staying overnight in St. John’s stayed with friends or family (67%), with the same proportion of out of province visitors staying in hotels (68%). Sameday Accommodation Newfoundland Overnight Out of Province Overnight Average $0.00 $145.99 $456.09 $301.90 $156.76 $258.95 $365.06 $306.31 Groceries $22.01 $44.93 $27.91 $32.82 Recreation & Entertainment $45.74 $6.91 $18.28 $17.69 Shopping $34.94 $101.40 $83.15 $83.62 Personal Vehicle Expenses $63.85 $81.87 $35.46 $53.97 Local Transportation $41.31 $27.30 $38.77 $35.29 Transportation to Newfoundland* $144.67 $26.68 $284.93 $183.99 Total $509.28 $694.01 $1,309.66 $1,015.59 Per Person per Day / Night $120.40 $86.86 $163.71 $133.49 Restaurants (including Patch) CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 7 Visitor Spending – Aggregate Combining the spending with the overall number of out of town visitors (4,282 people) shows that the aggregate spending in St. John’s associated with hosting the 2017 Tim Hortons Brier reached nearly $4.3 million. Newfoundland Overnight Sameday Visitors Out of Province Overnight Total 491 1,407 2,384 4,282 $0 $205,402 $1,087,330 $1,292,733 Restaurants (including Patch) $76,968 $364,341 $870,311 $1,311,619 Groceries $10,805 $63,210 $66,526 $140,541 Recreation & Entertainment $22,459 $9,718 $43,581 $75,758 Shopping $17,156 $142,663 $198,239 $358,059 Personal Vehicle Expenses $31,352 $115,184 $84,542 $231,079 Local Transportation $20,285 $38,414 $92,420 $151,119 Transportation to Newfoundland* $71,034 $37,541 $679,275 $787,850 $250,058 $976,474 $3,122,225 $4,348,758 Accommodation Total CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 8 Attributable Visitor Spending The survey asked specific questions to calculate the visitor spending directly attributable to the 2017 Tim Hortons Brier using a ranking scale of 1 to 10, with 1 meaning the Brier was not at all important in the decision to travel to St. John’s (and assigned a score of 10%) and 10 (it was the primary reason for travel, and assigned a score of 100%). The survey found that the overall importance of the Brier was very high at 8.9 / 10. Including the overall importance of the Brier (89%) shows that the direct spectator spending attributable to the 2017 Tim Hortons Brier was $3.9 million. Newfoundland Overnight Sameday Importance (1-10) Out of Province Overnight Total 9.05 9.36 8.79 8.93 $0 $192,236 $955,297 $1,147,533 $69,621 $340,986 $764,630 $1,175,237 $9,773 $59,158 $58,448 $127,379 Recreation & Entertainment $20,315 $9,095 $38,289 $67,699 Shopping $15,518 $133,518 $174,168 $323,204 Personal Vehicle Expenses $28,360 $107,801 $74,277 $210,437 Local Transportation $18,349 $35,952 $81,198 $135,498 Transportation to Newfoundland* $64,254 $35,134 $596,792 $696,180 $226,189 $913,880 $2,743,098 $3,883,167 Accommodation Restaurants (including Patch) Groceries Total CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 9 Operational Expenditures Operations In hosting the 2017 Tim Hortons Brier, the organizers spent money on items such as venue rental & operations, advertising, supporting the event volunteers, hospitality and accommodation of participants, supplies & entertainment for the patch and other items. The spending of sponsors for hospitality at the event, along with other associated events such as the Events Atlantic Summit were also included. CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 10 Economic Impact Results The spending of out of town spectators and participants at the 2017 Tim Hortons Brier, in combination with the expenditures made by the organizers in hosting the event totaled $7.2 million, supporting $10.1 million in economic activity in Newfoundland including $9.1 million of economic activity in St. John’s. These expenditures supported $3.4 million in wages and salaries in the province through the support of 56 jobs, of which 46 jobs and $2.7 million in wages and salaries were supported in St. John’s.2 The total net economic activity (GDP) generated by the 2017 Tim Hortons Brier was $6.2 million for Canada as a whole; $5.2 million for Newfoundland and $4.0 million in St. John’s. The 2017 Tim Hortons Brier supported tax revenues totaling $2.2 million for Canada as a whole. Broken out by level of government, the event supported federal tax revenues of $839,000 with an additional $1.0 million in taxes accruing to Newfoundland & Labrador. Moreover, $190,000 in municipal taxes were supported in the province, of which $143,000 was in St. John’s. 2 St. John’s Newfoundland Canada Initial Expenditure $7,165,022 $7,165,022 $7,165,022 GDP $3,970,102 $5,202,534 $6,208,363 Wages & Salaries $2,676,176 $3,376,928 $3,931,858 46.5 55.7 63.4 Industry Output $9,075,293 $10,080,701 $12,174,645 Total Taxes $1,615,638 $1,979,042 $2,166,240 Federal $610,556 $739,796 $839,373 Provincial $861,784 $1,049,480 $1,119,051 Municipal $143,298 $189,766 $207,815 Employment Jobs reported in this study refer to the number of jobs, vs. full time equivalent (i.e.: two people working half time in a job that typically features half time employment would represent two jobs or one FTE). Additionally, the direct employment effects are generally extra shifts or overtime for existing workers rather than new employment. Economic Impact Results Detailed St. John’s Initial Expenditure Newfoundland $7,165,022 11 Canada $7,165,022 $7,165,022 Gross Domestic Product Direct Impact $1,843,579 $1,972,961 $1,972,961 Indirect Impact $1,554,814 $2,378,966 $2,940,335 Induced Impact $571,709 $850,607 $1,295,067 $3,970,102 $5,202,534 $6,208,363 $8,171,031 $8,735,310 $9,967,465 $904,262 $1,345,390 $2,207,180 $9,075,293 $10,080,701 $12,174,645 Total Impact Industry Output Direct & Indirect Induced Impact Total Impact Wages & Salaries Direct Impact $1,423,168 $1,494,722 $1,494,722 Indirect Impact $1,008,465 $1,506,253 $1,824,570 Induced Impact $244,542 $375,953 $612,566 $2,676,176 $3,376,928 $3,931,858 Total Impact Employment (Full-year jobs) Direct Impact 31.0 31.9 31.9 Indirect Impact 12.3 19.3 23.6 Induced Impact 3.2 4.6 7.9 46.5 55.7 63.4 Total Impact Taxes (Total) Federal $610,556 $739,796 $839,373 Provincial $861,784 $1,049,480 $1,119,051 Municipal $143,298 $189,766 $207,815 $1,615,638 $1,979,042 $2,166,240 Total CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 12 Additional Questions Is this your first visit to Newfoundland and Labrador? Yes 29% No 71% Have you been to the Brier before? Local Newfoundland Out of Province Total Yes 17% 24% 71% 33% No 83% 76% 29% 67% Will you attend the Brier again? Local Newfoundland Out of Province Total Very likely 72% 67% 73% 71% Somewhat likely 17% 26% 19% 20% Somewhat unlikely 3% 1% 3% 3% Very unlikely 1% 1% 3% 2% Too soon to tell 6% 4% 3% 5% CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 13 Additional Questions How far would you be willing to travel? Local Newfoundland Out of Province Total Not too far, hometown only 10% 5% 2% 7% Day trip (i.e. up to 200km) 24% 17% 2% 17% Regional (i.e. Atlantic Canada, up to 1000km) 21% 29% 16% 21% National 29% 31% 61% 38% Not sure, depends on host community 16% 18% 20% 17% CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 14 Additional Questions Will you be going to the Patch? Local Newfoundland Out of Province Total Yes 74% 82% 91% 80% No 19% 12% 8% 15% 7% 6% 1% 5% Not sure yet Will you be going to the Patch on days when you don’t go to curling? Local Newfoundland Out of Province Total Yes, will go to patch without curling 23% 25% 28% 25% No, going to patch as part of curling only 71% 73% 71% 71% 6% 3% 1% 4% Not sure yet Would you com to the Brier if there was no Patch? Local Newfoundland Out of Province Total Yes 91% 93% 78% 87% No 7% 8% 18% 10% Not sure yet 2% 0% 4% 2% CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 15 How Economic Impact Modelling Works Spectator Spending Participant Spending GDP Visitor Expenditure ($2.8M) Operational Expenditures ($4.3M) Jobs Event Expenditure Economic Multipliers Economic Impact Taxes Wages & Salaries CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 16 Event Expenditure • Represents the combined spending of: • Event Visitors (Tourism) • Event Operations • Event Capital Construction • Is the amount of money being spent in the community BEFORE the application of any economic multipliers $ CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 17 Gross Domestic Product (GDP) • Represents the total value of production of goods and services in the economy resulting from the initial expenditure under analysis • This is a NET measure and represents the value of goods and services produced less the cost of inputs used. It also accounts for the value of any imports to the region under consideration • The concept is well understood by most government stakeholders and economists Gross Domestic Product CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 18 Economic Activity Economic Activity This figure represent the direct, indirect and induced impacts on industry output generated by the initial tourism expenditure. It should be noted that the industry output measure represents the sum total of all economic activity that has taken place and consequently involve double counting on the part of the intermediate production phase. Since the Gross Domestic Product (GDP) figure includes only the net total of all economic activity (i.e. considers only the value added), the industry output measure will always exceed or at least equal the value of GDP. CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 19 Economics Background Induced (Impact associated with the re-spending of wages, salaries & profits) Indirect (Impact arising from the supply of goods & services to produce Direct) Direct (The impact arising from the initial expenditure) CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 20 Appendix 1: Economic Impact Methodology STEAM2.0 Background Briefly, the purpose of STEAM 2.0 is to calculate both the provincial and regional economic impacts of sport and event based tourism. The economic impacts are calculated on the basis of capital and operating expenditures on goods, services and employee salaries, and on the basis of tourist spending within a designated tourism sector. The elements used to measure the economic impacts are Gross Domestic Product (GDP), Employment, Taxes, Industry Output and Imports. STEAM measures the direct, indirect & induced effects for each of these elements. In order to produce economic contribution assessments that are robust and reliable, we developed specific economic contribution models at the national, provincial and metropolitan levels that make use of the most current and most detailed input-output tables and multipliers available from Statistics Canada. The approach also leverages the credibility and robustness of sector specific tax data available from Statistics Canada’s Government Revenues Attributable to Tourism (GRAT) report. Technical Description of the Impact Methodology Used by STEAM2.0 While the economic contribution analysis will be conducted primarily at the provincial level, developing highly disaggregated provincial economic models required first the construction of a highly disaggregated national economic contribution model. The reason for this was that detailed input-output tables from Statistics Canada are only publicly available at the national level. For STEAM 2.0 and STEAM PRO 2.0, we pioneered a solution that leveraged the detail available on an industry basis from the national model using aggregate multipliers that are available for each province and territory. While the set of multipliers that Statistics Canada produces do not provide insights into the economic contributions attributed to specific industries operating within the economy, they do represent a known aggregate level which the overall economy can be expected to benefit by. The key to our approach is the linkage between the industry level detail (provided by the model developed from the input-output tables) with the benchmarks provided by the various multipliers. CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 21 Appendix 1: Economic Impact Methodology STEAM2.0 STEAM 2.0 and many other impact studies are based on input-output techniques. Input-output models involve the use of coefficients that are based on economic or business linkages. These linkages trace how tourist expenditures or business operations filter through the economy. In turn, the coefficients applied are then used to quantify how tourism related activity in a particular region generates employment, taxes, income, etc. The input-output approach indicates not only the direct and indirect impact of tourism, but can also indicate the induced effect resulting from the re-spending of wages and salaries generated. All impacts generated by the model are given at the direct impact stage (i.e. the "front line" businesses impacted by tourism expenditures), indirect impact stage (i.e. those industries which supply commodities and/or services to the "front line" businesses) and the induced impact stage (induced consumption attributable to the wages and salaries generated from both the direct and indirect impact). The direct and indirect impact phase results are benchmarked with the corresponding direct and indirect multipliers from Statistics Canada at the national level, on an industry by industry basis. We developed induced round effects that replicate the re-spending behavior of consumers (who benefited through wages either directly or indirectly by sport events) along income ranges. The re-spending profiles used account for different average wages that exist in specific industry sectors. Ultimately, the re-spending profiles permit the determination of distinct levels and composition of induced consumption depending upon the extent to which those industries are directly and indirectly affected by economic activity arising from hosting sports events and festivals. After the level and composition of induced consumption is determined, the process involved treating the induced consumption spending in a separate analysis—much the same as the original sport event related expenditures were. Hence, these expenditures were simulated through the direct and indirect impact phase and treated as if they were initial expenditures. Once again, the magnitude of the results of the induced impact phase was benchmarked against the corresponding multipliers supplied by Statistics Canada. Again, this is done to ensure that, in aggregate, the estimates align with those from Statistics Canada but at the same time the analysis also provides an industry by industry breakdown. Taxes and employment are two key impact measures that require data sources beyond those available in the input-output model. CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 22 Appendix 1: Economic Impact Methodology STEAM2.0 Taxes Despite the fact that many of the sales tax ratios are available from the margins tables produced by Statistics Canada, additional work was required to adjust these rates based on possible changes in tax rates between 2010 (the year of the input-output tables) and 2012 (the year of the analysis). To extend the analysis to include the full range of taxes and fees impacted by sport events, we relied on statistics reported in Statistics Canada's Government Revenues Attributable to Tourism (GRAT) report. This report is particularly useful because it follows the concepts and definitions as identified in the Canadian Tourism Satellite Account (CTSA). As well, the scope of taxes covered by the GRAT is more comprehensive than what would be possible using only the input-output tables. In particular, the GRAT includes taxes on incomes (i.e., on employment earnings, corporate profits, net income of unincorporated business and government business enterprises), contributions to social insurance plans (i.e., premiums for Canada/Quebec Pension Plan, Employment Insurance and workers compensation), taxes on production and products (such as sales and property taxes), and from sales of government goods and services. Aside from reporting on the tax collections directly attributable to tourism, the GRAT study also identifies the composition and level of taxes attributed to various industry segments of the economy. At the present time, the most recent GRAT report relates to the 2011 calendar year. The established rates calculated from GRAT were adjusted, where applicable, to reflect rate changes that occurred between 2011 and subsequent years. To incorporate the findings from the GRAT study into our analysis, we estimated ratios that were based on the most current industry sector tax data along with the most current GDP estimates on an industry basis. The resulting tax coefficients were then used to determine tax calculations that would be based on GDP estimates stemming from the model on an industry by industry basis. The categories of taxes that were benchmarked against the GRAT statistics include corporate taxes, contributions to social insurance plans and other taxes on production. Other taxes on production comprise property taxes, payroll taxes, capital taxes, permits and many other miscellaneous taxes covering federal, provincial and municipal levels of government. The contributions to social insurance plans include employment insurance, worker’s compensation and the Canada and Quebec pension plans. We also went outside of the figures reported in the GRAT report to assemble income tax coefficients. This was done to capture the detail that was already available from the input-output analysis and to better align with the granular demand associated with sporting event expenditures. The source used to assemble specific income tax rates, by income range, was the Canadian Tax Foundation's most recent Finances of the Nation report. This report provide insights on taxes on incomes (i.e., on employment earnings, corporate profits, net income of unincorporated business and government business enterprises) and contributions to social insurance plans (i.e., premiums for Canada/Quebec Pension Plan, Employment Insurance and workers compensation). CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 23 Appendix 1: Economic Impact Methodology STEAM2.0 Employment Employment is a measure that is available, in aggregate form, from the multiplier tables produced by Statistics Canada. However, the employment multipliers relate to the year of the tables (2010) and not the year of the current analysis. To adjust for this difference, indices of average wage growth by industry were incorporated to reflect the period between 2010 and the year under analysis. Annual data from Statistics Canada's Labour Force survey were used on an industry basis to capture the change in average earnings. Once again, in order to preserve the industry by industry detail available from the model, appropriate average wages were applied against industry labour income estimates to align with the employment multipliers from Statistics Canada. The one distinction being that the employment multipliers reflect the economy operating in 2010. Hence, adjustments on average wages were made to estimate what the employment multipliers would resemble had they been produced for subsequent years. Regional (Sub-Provincial) Impact Methodology The method used to simulate intraprovincial commodity flows and ultimately regional impacts follows directly from regional economic principles. The principle is referred to as the "gravity model". Basically the "gravity model" states that the required commodity (& service) inputs will be "recruited" in a manner that takes into consideration economies of scale (i.e. production costs), transportation costs and the availability of specific industries. Economies of scale (i.e. lower production costs) are positively correlated with input demand while greater transportation costs are negatively correlated with input demand. Fulfilling that demand from other provincial regions is contingent on the fact that the specific industry does actually exist. An advantage of using the "gravity model" to simulate intraprovincial commodity flows is that as the industrial composition of the labour force changes, or as new industries appear for the first time in specific regions, the share of production between the various sub-provincial regions also changes. By following this principle of the gravity model, all sub-provincial regions of a province are assigned a coefficient for their relative economies of scale in each industry (using the latest industry labour force measures) as well as a coefficient to represent the transportation cost involved to get each industry's output to the designated market. One variation on the "gravity model" principle involves the estimation of "relative trade distances" by incorporating different "weights" for different modes of transport. Once these coefficients are generated for all regions and over all industries, a measure of sensitivity (mostly relative to price, but in the case of service industries also to a "local preference criteria") is then applied to all commodities. Another variation on the strict "gravity model" approach is that the measure of sensitivity is adjusted by varying the distance exponent (which in the basic "gravity model" is 2) based on the commodity or service required. The variation in distance exponents revolve, principally, around two research hypotheses: (1) the greater the proportion of total shipments from the largest producer (or shipper), the lower the exponent, and (2) the greater the proportion of total flow which is local (intraregional), the higher the exponent. CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 24 Appendix 2: Glossary of Terms Used by STEAM2.0 Initial Expenditure - This figure indicates the amount of initial expenditures or revenue used in the analysis. This heading indicates not only the total magnitude of the spending but also the region in which it was spent (thus establishing the "impact" region). Direct Impact - Relates ONLY to the impact on “front-line” businesses. These are businesses that initially receive the operating revenue or tourist expenditures for the project under analysis. From a business perspective, this impact is limited only to that particular business or group of businesses involved. From a tourist spending perspective, this can include all businesses such as hotels, restaurants, retail stores, transportation carriers, attraction facilities and so forth. Indirect Impact - Refers to the impacts resulting from all intermediate rounds of production in the supply of goods and services to industry sectors identified in the direct impact phase. An example of this would be the supply and production of bed sheets to a hotel. Induced Impact - These impacts are generated as a result of spending by employees (in the form of consumer spending) and businesses (in the form of investment) that benefited either directly or indirectly from the initial expenditures under analysis. An example of induced consumer spending would be the impacts generated by hotel employees on typical consumer items such as groceries, shoes, cameras, etc. An example of induced business investment would be the impacts generated by the spending of retained earnings, attributable to the expenditures under analysis, on machinery and equipment. Gross Domestic Product (GDP) - This figure represents the total value of production of goods and services in the economy resulting from the initial expenditure under analysis (valued at market prices). CSTA ECONOMIC IMPACT STUDY 2017 TIM HORTONS BRIER 25 Appendix 2: Glossary of Terms Used by STEAM2.0 GDP (at factor cost) - This figure represents the total value of production of goods and services produced by industries resulting from the factors of production. The distinction to GDP (at market prices) is that GDP (at factor cost) is less by the amount of indirect taxes plus subsidies. Wages & Salaries - This figure represents the amount of wages and salaries generated by the initial expenditure. This information is broken down by the direct, indirect and induced impacts. Employment - Depending upon the selection of employment units (person-years or equivalent full-year jobs) these figures represent the employment generated by the initial expenditure. These figures distinguish between the direct, indirect and induced impact. “Equivalent Full-Year Jobs”, if selected, include both part-time and full-time work in ratios consistent with the specific industries. Industry Output - These figures represent the direct & indirect and total impact (including induced impacts) on industry output generated by the initial tourism expenditure. It should be noted that the industry output measure represents the sum total of all economic activity that has taken place and consequently involve double counting on the part of the intermediate production phase. Since the Gross Domestic Product (GDP) figure includes only the net total of all economic activity (i.e. considers only the value added), the industry output measure will always exceed or at least equal the value of GDP. Taxes - These figures represent the amount of taxes contributed to municipal, provincial and federal levels of government relating to the project under analysis. This information is broken down by the direct, indirect and induced impacts. Imports - These figures indicate the direct, indirect and induced final demand and intermediate production requirements for imports both outside the province and internationally.