September 4, 2012
TORONTO — The Honourable Joe Oliver, Minister of Natural Resources, today unveiled updated figures highlighting the significant contributions of the natural resources sector to the Canadian economy.
The new figures, generated by Natural Resources Canada using the latest Statistics Canada data, enable a better understanding of this economic impact by taking into account the value of goods and services purchased by the natural resources sector from other industries. This analysis also offers a more comprehensive account of the number of jobs supported by the sector.
“In addition to the approximately 800,000 Canadians directly employed in the natural resource sector, another 800,000 people across Canada in every province and territory are employed by industries serving the sector,” said Minister Oliver. “Put that together and you have close to 1.6 million jobs that depend on natural resources — about 10 per cent of all the jobs in Canada. This truly demonstrates the expansive impact this sector has on the Canadian economy.”
Newly estimated numbers demonstrate that, together, the energy, mining and forestry sectors directly account for 15 per cent of Canada’s nominal GDP in 2011.
In addition, the sector’s purchases of goods and services in other sectors of the economy represent approximately another 4 per cent of nominal GDP, meaning that the natural resources sector drives almost 20 per cent of economic activity in Canada. All of this results in billions of dollars a year in government revenues for health care, education and other vital services that are a fundamental part of our quality of life.
The analysis shows not only how vital natural resources are to the Canadian economy but also the long-term potential of the sector, which will be one of the key drivers of new jobs over the next decade.
“There are currently over 600 major Canadian resource projects planned over the next 10 years or underway representing approximately $650 billion in investments,” said Minister Oliver. “This is a more accurate picture of resource related investments from a year ago, and represents an unparalleled opportunity for Canada.”
In order to capitalize on these investments and to unleash the potential of our resource sectors to create good jobs across Canada, the Harper Government has put in place a plan for Responsible Resource Development. The plan is based on four main pillars: making project reviews more predictable and timely; reducing duplication of project reviews; strengthening environmental protection; and enhancing consultations with Aboriginal peoples.
The Harper Government recognizes the importance of Canada’s natural resources industry and will ensure that it remains strong and globally competitive, resulting in jobs, growth and prosperity.
Media may contact:
Carly Wolff
Press Secretary
Natural Resources Canada
Ottawa
613-996-2007
Or:
Media Relations
Natural Resources Canada
Ottawa
613-992-4447
The general public may contact:
Mon.–Fri., 8:30 a.m.–4:30 p.m. EDT
Telephone: 613-995-0947
TTY: 613-996-4397
(teletype for the hearing-impaired)
E-mail: questions@nrcan.gc.ca
Economic Impact of Canada’s Natural Resources Sector – Backgrounder
Canada has excelled in transforming its vast endowment of natural resources into world-leading resource industries. Today, Canada’s natural resources sector is a significant component of the national, provincial and territorial economies, contributing to high living standards for Canadians. In 2011, this sector directly accounted for 15 per cent of nominal gross domestic product (GDP) and 790,896 jobs.
In addition, through the purchase of goods and services from other sectors such as construction, machinery, professional services, transportation, the natural resources sector makes considerable indirect contributions to the Canadian economy. Using Statistics Canada’s input-output model, this indirect contribution to nominal GDP is estimated at about $70 billion in 2011, or about 4 per cent of Canadian nominal GDP. Correspondingly, over 800,000 jobs in other sectors were supported by the purchase of goods and services by the resources sector.
The potential for continued growth in the natural resources sector remains strong. There are currently over 600 major Canadian resource projects planned over the next 10 years or underway representing approximately $650 billion in investments, a significant increase from the $500 billion in investments that had been identified a year ago. Investment in these projects is at varying stages. Of this total, roughly $150 billion is being invested in major projects currently under construction. The remaining projects are proposed investments over the next 10 years, including approximately $200 billion in major projects that have received approvals and secured financing, and $300 billion in projects which are in earlier stages of planning (i.e. undergoing environmental review, feasibility studies or in the process of securing financing). Investment in these projects will have a significant economic impact by contributing to jobs and growth across all regions.
Methodology
Nominal GDP
To measure economic activity, the indicator most often used is GDP, which is published in constant dollar terms (real GDP), and current dollar terms (nominal GDP). The chief difference between real and nominal GDP is how they account for price variations. Real GDP uses 2002 market prices as a base and focuses on production volume. The rate of change in real GDP is the most commonly used measure of economic growth. Nominal GDP is based on current prices and captures effects of both production volumes (quantity produced) and prices (rising or falling commodity / product prices). It is generally recognized that nominal GDP is a more accurate indicator to measure a sector’s share of the economy as it captures the total income generated by a sector.
Nominal GDP is available through to 2008 from Statistics Canada. Natural Resources Canada has developed a methodology to project nominal GDP in the natural resources sector to 2011. The approach reconciles available Statistics Canada data, while making certain assumptions, in order to produce authoritative estimates of the role the natural resources sector played in the Canadian economy in 2011.
Indirect contribution
Statistics Canada’s Input-Output model provides detailed information on the structure of over 300 industries. The most recent year for which it is available is 2008. It outlines what type of products, services and commodities these industries purchased, as well as which industries they were purchased from. For example, natural resource development translates into increased activity in the construction industry. Using this methodology, as well as growth rates in GDP between 2008 and 2011, Natural Resources Canada estimated employment and GDP occurring in other sectors of the economy as a result of activity in the natural resource industries.
Potential investment in major natural resources projects
The estimated value of investment in major Canadian natural resource projects currently under construction or planned over the next 10 years was compiled by Natural Resources Canada and is current to August 2012. This year’s inventory includes a more comprehensive list of resource projects compared to the previous year and reflects a significant net increase in new capital investment across the sectors. The main sources used were project inventories from provincial and territorial governments, industry associations, private organizations, media releases, and company websites. Provincial and territorial government officials were consulted in order to validate project information and values.
Media may contact:
Carly Wolff
Press Secretary
Office of the Minister
Natural Resources Canada
Ottawa
613-996-2007
Or:
Media Relations
Natural Resources Canada
Ottawa
613-992-4447