Economic Contribution

A strong energy sector is key to ensure Canada’s prosperity for the future.

Canada is falling behind. Competition for capital investment in the global market is fierce and if Canada wants its industry to be a major player internationally, a number of factors need to be considered. Rising government costs, the burden of inefficient regulations, and the lack of infrastructure to move Canadian energy to growing markets are all undermining investor confidence in Canada and negatively affecting the country’s ability to attract the capital needed to create jobs and national prosperity.

Total capital spending is estimated to be $41 billion in 2018 – a 49 per cent decrease compared to $81 billion in 2014. Meanwhile, capital spending in the United States increased by about 38 per cent to $120 billion thanks to a more  streamlined regulatory system.

Capital Investment in Canada's Oil and Natural Gas Industry

Capital investment is estimated to be 41 billion in 2018, a decrease of 49 per cent from 2014. 

Source: Statistics Canada and CAPP,  2019

Jobs across Canada

Capital investment in our energy sector generates development activity, which in turn spurs job creation and economic growth across Canada. Oil sands development creates a significant number of jobs outside Alberta. In fact, more than 3,400 Canadian companies outside of Alberta supplied the oil sands with good and services in 2014 and 2015. 

Number of jobs across province in 2017

Number of jobs across Canada in 2017 listed by province.

Source: CAPP, 2018

In 2017, the oil sands supported and created 528,000 direct and indirect jobs across Canada. (CAPP, 2018). Many of these jobs are in provinces outside of Alberta - the goods, materials and services used to construct and operate oil sands projects, mines and upgraders come from across North America. Many of the components — tires, trucks, gauges, valves, pumps, etc. — are produced in Ontario and Quebec.

According to the Canadian Energy Research Institute (CERI), almost every region in Canada has been stimulated by oil sands development through job creation and economic activity.

Investment and tax revenue

The oil and natural gas industry is Canada’s largest private sector investor, with oil sands alone injecting almost $13 billion into the economy in 2017. The oil sands industry and its suppliers contribute to government revenues through corporate taxes, personal income taxes, property taxes, royalties, land sales and other costs. Over the next 20 years, the oil sands industry is expected to pay $1.7 trillion in provincial and federal taxes – including royalties. These revenues contribute to government spending on infrastructure, social services and other important programs. A healthy oil sands industry results in higher revenues for governments.

Oil sands royalties

Alberta’s natural resources belong to Albertans. In exchange for the right to develop these resources, companies pay the government a royalty. This is a percentage of revenues generated from the sale of oil and natural gas products, or in some cases takes the product in-kind for the government to sell.

Royalties are just one way oil and natural gas producers contribute to government revenues. Many different government taxation policies affect exploration and development of Alberta’s natural resources.