Canadian Occupational Projection System (COPS)

Industrial Summary

Air, Rail, Water and Pipeline Transportation Services

NAICS 4811-4812; 4821; 4831-4832; 4861-4869; 4871-4879; 4881-4889

This industry comprises establishments primarily engaged in transporting passengers and merchandises by air, rail and water. It also includes establishments transporting goods by pipeline (such as crude oil, natural gas and refined petroleum), those providing recreational transportation services (such as sightseeing or dinner cruises and steam train excursions), as well as those providing support services to various transportation establishments (specific to a mode of transportation or multi-modal). Support services are the largest of the six segments, accounting for 39% of production and 50% of employment in 2021. Other major segments include: air transportation (5% of production in 2021, down from 20% in 2019, and 22% of employment in 2021, down from 28% in 2019); rail transportation (23%, 15%); and pipeline transportation (28%, 6%). Overall, the industry employed 244,200 workers in 2021, mostly concentrated in Ontario (28%), Quebec (22%), British Columbia (20%) and Alberta (16%), with a workforce primarily composed of men (75%). Key occupations (4-digit NOC) include:

  • Air pilots, flight engineers, flying instructors (2271)
  • Transport truck drivers (7511)
  • Airline ticket and service agents (6523)
  • Pursers and flight attendants (6522)
  • Aircraft mechanics and aircraft inspectors (7315)
  • Public works maintenance equipment operators and related workers (7522)
  • Managers in transportation (0731)
  • Supervisors, supply chain, tracking and scheduling co-ordination occupations (1215)
  • Railway and yard locomotive engineers (7361)
  • Air transport ramp attendants (7534)
  • Deck officers, water transport (2273)
  • Customs, ship and other brokers (1315)
  • Longshore workers (7451)
  • Air traffic controllers and related occupations (2272)
  • Railway yard and track maintenance workers (7531)
  • Railway conductors and brakemen/women (7362)
  • Water transport deck and engine room crew (7532)
  • Supervisors, railway transport operations (7304) Railway carmen/women (7314)
  • Boat and cable ferry operators and related occupations (7533)
  • Ground and water transport ticket agents, cargo service representatives and related clerks (6524) Railway and motor transport labourers (7622)
  • Railway traffic controllers and marine traffic regulators (2275)
  • Engineer officers, water transport (2274)

The industry relies heavily on domestic and foreign demand for travel as well as on transportation and international trade of merchandises. After being negatively affected by the recession of 2008-2009, the output quickly recovered in 2010 and 2011, driven by the recovery in domestic and global economic conditions, which resulted in increased discretionary spending on travel and tourism activities and renewed growth in international trade. Growth in output remained solid in subsequent years and was particularly strong from 2014 to 2019 as the industry benefited from the sharp drop in crude oil prices in 2014-2015, which resulted in lower fuel costs and a weaker Canadian dollar. More precisely, lower fuel costs allowed airlines to reduce fare prices, stimulating demand for their services, while a weaker currency attracted a higher number of international travelers flying to Canada and encouraged more Canadians to choose vacation within the country and use routes exclusively served by domestic airlines. A weaker currency has also contributed to increase Canadian exports, supporting demand for the transportation of goods by rail, boat or air cargo.

However, the industry was devastated by the COVID-19 pandemic, with business lockdowns, home confinement, travel restrictions and closed borders leading to a drastic fall of 24% in output in 2020 alone. While all segments of the industry were negatively impacted, air transportation was the most severely hit, with output falling by 73% as Canadian airlines reduced their supply in a substantial way, ending almost all international flights and more than half of the internal flights. The industry’s output reached a bottom in 2021, as the recovery in rail, water and pipeline transportation was offset by an additional decline of 34% in air transportation due to restrictions on non-essential travels and quarantine requirements. Those fluctuations lowered real GDP growth in the overall industry to an average of only 0.5% per year for the full period 2012-2021, although this indicator is clearly misleading as it masks the fact that the industry experienced robust growth (+4.2 annually) prior to the pandemic. After peaking in 2019, employment fell markedly in 2020 (-18%) and the small rebound posted in 2021 left the number of workers well below its pre-pandemic level. This lowered job creation in the industry to a modest 0.4% annually over the past decade. The movements in output and employment also led to large declines in productivity in recent years, resulting in an average growth rate of only 0.1% annually from 2012 to 2021.

Over the next decade, output growth in the industry is projected to strengthen markedly, led by the near-term recovery in air transportation, which will benefit from the lifting of public health restrictions, the reopening of the borders, and the recovery in travel activity following the accumulation of a strong pent-up demand during the pandemic. In the longer term, growth in this segment is projected to slow as business travel is expected to be less frequent, partly due to substantial improvements in telecommunication and telework technologies. However, the outlook for recreational travel is mixed. On one hand, higher incomes in emerging markets and massive retirements of baby-boomers in developed markets are expected to support demand for recreational travel. On the other hand, the slower pace of growth anticipated in disposable income in Canada (resulting from the gradual slowdown anticipated in employment growth) is also expected to put pressures on discretionary spending, including spending on air travel. Another factor that could restrain growth in demand for air travel moving forward is climate change activism. The transportation of merchandise by rail or boat is expected to do well in the short to medium term, benefiting from a solid rebound in exports and imports of goods and, in the longer term, additional investments in intermodal freight connectivity. The pipeline transportation will benefit from the completion of two major projects in the short to medium term: the Coastal Gas link (which will connect production fields with the LNG Canada export terminal) and the Trans Mountain pipeline expansion (which will increase capacity from its current capacity of about 300,000 barrels per day to 890,000 barrels per day), although it is unlikely to see any major new pipeline developments in the longer term given the difficulties building the current projects from a social, environmental and profitability perspective.

The resulting pace of growth in real GDP for the entire industry is projected to average a strong 4.6% annually over the period 2022-2031, with gains in output evenly split between employment and productivity growth. The substantial improvement in output growth is expected to lead to much faster growth in employment relative to the past ten years, averaging 2.3% annually, largely reflecting strong gains from 2022 to 2024 as the industry gradually recovers the jobs lost during the pandemic. Over the longer term, job creation is expected to moderate in line with slower growth in output and additional gains in productivity. On average, productivity growth is expected to straighten at an average pace of 2.3% per year over the next decade, with a large part of the growth also occurring in the short term in response to post-pandemic adjustments and frictions in labour supply, particularly in air transportation. Overall, the industry is highly intensive in capital with aircrafts, trains, boats and pipelines all requiring substantial investments, which will help support productivity growth over the forecast horizon. The growing number of competitors on the domestic and international markets will prompt the industry, particularly Canadian airlines, to increase efficiency and productivity at the expense of employment. For example, the introduction of self-service kiosk operation in airports around the world has increased efficiency across all aspects of the check-in and passenger processing system. Other factors enhancing productivity include measures that speed up maintenance work and the marketing of air services, as well as changes in the industry structure through mergers and acquisitions.

Real GDP and Employment Growth Rates in Air, Rail, Water and Pipeline Transportation Services

Figure showing the annual average growth rates of real GDP and employment over the periods 2012-2021 and 2022-2031 for the industry of air, rail, water and pipeline transportation services. The data is shown on the table following this figure

Sources: Statistics Canada (historical) and ESDC 2022 COPS industrial projections.

Text Version of Figure Real GDP and Employment Growth Rates in Air, Rail, Water and Pipeline Transportation Services (%, annual average)
  Real GDP Employment
2012-2021 0.5 0.4
2022-2031 4.6 2.3

Sources: Statistics Canada (historical) and ESDC 2022 COPS industrial projections.

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