Contributor to the Second Edition of Primer on Energy Systems in Canada. This is the first in a series of blogs based on Energy Exchange’s new Primer on Canadian Energy Systems. Canada is a key actor in the production and distribution of energy commodities, ranking third in the world in terms of proved oil reserves, fourth in installed hydroelectric capacity, and fifth in overall energy production. But how much does the energy sector in Canada contribute to the country’s GDP and employment? You might be surprised by the answers.
The production and transportation of oil products, natural gas, and electricity in Canada contributes around $170 billion, or little under 10%, of the country’s $1.8 trillion GDP.
As seen in the graph, traditional oil and gas production (4%), oil sands (2%), and the electric power industry (2%) provide the highest contributions.
The figures on the graph are from 2012, although little has changed since then.
In reality, despite low natural gas prices and the recent turbulence in the oil market, the fossil fuel industry’s GDP growth outpaced the rest of the economy from 2012 to 2015, owing partly to the U.S. dollar exchange rate raising the Canadian dollar value of oil exports.
Although there are major refining, pipeline, and distribution industries across the country, the fossil fuel industry accounts for a higher share of the GDP of oil-producing provinces, up to 25%.
The electric power industry’s 1.9 percent contribution to Canada’s GDP is more evenly distributed across the country, while there is still significant provincial fluctuation.
The electric power sector contributes one percent of Alberta’s GDP, with energy being used mostly for end applications when no other option exists (lighting, appliances, small motors, telecommunications, and information technology).
In Quebec, on the other hand, where electricity is widely used for space and water heating and accounts for around 40% of all energy end uses in the province, the industry contributed 3.4 percent to provincial GDP.
Employment
The Primer on Energy Systems in Canada introduces learners to fundamental concepts, practices, and vocabulary that will aid in energy education and discussion. The linkages that make up the networks of technology and infrastructure that link end-users and energy sources, as well as the social, economic, and environmental interrelationships that define Canada’s energy systems, may be seen when looking at energy challenges via a systems lens.
What percentage of Canada’s GDP is derived from oil and gas?
The oil and gas industry in Canada has both direct and indirect effects on the national and provincial economy, including GDP, jobs, and output from other vital industries.
GDP and output
The GDP of Canada’s oil and gas sector was $128 billion in 2017, accounting for 6.4 percent of the entire Canadian economy.
The value of goods and services produced by Canada’s oil and gas sector and supply chain totaled $241 billion in 2017, accounting for around 6.4 percent of the country’s overall output (see Table 1).
Jobs
In 2017, the Canadian oil and gas sector employed 611,362 people 216,285 directly and 395,077 indirectly accounting for around 3.2 percent of all jobs in the country (see Table 2).
The total compensation paid to workers in the oil and gas extraction business in 2017 was approximately $13.3 billion (Statistics Canada, 2021f).
GDP
The oil and gas industry in Canada accounts for a considerable amount of GDP in major industries across the country. They range from about $370 million in GDP, or 4.1 percent of GDP, in the North American Industry Classification System (NAICS) sector categorized as office administrative services, to nearly $3.2 billion, or 11.4 percent of GDP, for machinery, equipment, and supplies merchant wholesalers, according to Statistics Canada (see Table 3).
Output (value of goods and services produced)
Nearly $139 million in products and services were acquired by the oil and gas industry and its supply chain from Canada’s NAICS general merchandise stores sector, accounting for 0.8 percent of that sector’s total production. Over $7.1 billion in goods and services were acquired by oil and gas producers and suppliers from the architectural engineering and allied services sector in Canada, accounting for 19% of the industry’s total production (see Table 4).
In 2017, the Canadian oil and gas sector created jobs in a variety of industries, ranging from just over 1,658 jobs in the telecommunications sector (or 1.3 percent of all jobs in that industry) to 33,467 jobs in the architectural engineering and related services sector (or 15.2 percent of all jobs in that industry) (see Table 5).
Conclusion
The oil and gas industry in Canada as a whole is responsible for a significant amount of GDP, employment, and output in important industries across the country. The overall impact of the Canadian oil and gas sector on the Canadian economy, which includes both direct and indirect effects
Even with the 2017 energy price drop, the direct and indirect effects of oil and gas extraction and investment are significant. The wide sector accounted for 3.2 percent of all direct and indirect jobs in Canada that year, and contributed 6.4 percent of Canada’s total GDP and total output, or the acquisition of goods and services, directly and indirectly. In 2017, the narrower direct oil and gas extraction sector accounted for around 3.2 percent of GDP.
What percentage of GDP is accounted for by oil and gas?
The oil and natural gas business in the United States employs 10.3 million people and accounts for about 8% of the country’s GDP. Every year, we invest hundreds of billions of dollars in the United States to boost economic growth.
What percentage of Canada’s GDP is based on oil?
The oil and gas industry in Canada has both direct and indirect effects on the national and provincial economies, including GDP, jobs, and output created in other vital industries.
GDP and Output
The GDP of the Canadian oil and gas sector was $101.9 billion in 2016, accounting for 5.4 percent of the entire Canadian economy. The value of goods and services produced by the Canadian oil and gas sector and its supply chain totaled $209.8 billion in 2016, accounting for around 5.9% of the country’s overall output (see Table 1).
In 2016, the Canadian oil and gas sector employed 220,021 direct workers and 381,371 indirect workers, totaling 603,392, or 3.3 percent of all jobs in the country (see Table 2). Total wages and salaries given directly to oil and gas sector workers, as well as those employed indirectly as a result of oil and gas sector activities, totaled more than $10.4 billion in 2016.
A detailed breakdown: The oil and gas sector’s impact on key sectors of the Canadian economy GDP
The oil and gas industry in Canada accounts for a considerable amount of GDP in major industries across the country. They range from about $490 million in GDP in the Statistics Canada (NAICS4) sector for agricultural, construction, and mining machinery manufacturing, or 15.9% of GDP, to $3.9 billion, or 16.9% of GDP, for architectural engineering and related services (see Table 3).
What accounts for Canada’s high GDP?
Real estate, mining, and manufacturing are the three main businesses, and it is home to some of the world’s largest mining corporations. International trade accounts for a major share of its GDP, with the United States, China, and the United Kingdom as its top trading partners.
What percentage of Canada’s GDP is derived from exports?
Exports of goods and services as a percentage of GDP in Canada are 31.92 percent, while imports of goods and services are 33.51 percent.
Is Canada wealthier than the United States?
Because both Canada and the United States are developed countries, their economies are similar. While both countries will be in the top ten economies in the world in 2022, the United States will be the largest, with a GDP of US$24.8 trillion, and Canada will be ninth, with a GDP of US$2.2 trillion.
What percentage of Alberta’s GDP is made up of oil and gas?
Although the oil and gas sector remains Alberta’s largest industry, accounting for 16% of its GDP, other industries such as construction, real estate, banking and insurance, and business and commercial services increased significantly between 1986 and 2016.
What is the largest oil firm in Canada?
Enbridge is Canada’s largest oil and gas corporation. It had made 33.7 billion dollars in revenue in the previous fiscal year as of 2021. Enbridge, situated in Calgary, Alberta, is the country’s largest midstream firm.