Canada is at a crossroads. The economy has been slow to grow, inflation continues to bite at Canadians’ pay checks and we aren’t creating enough well-paying jobs to keep up with a growing population.
This bears out in the numbers. The Organization for Economic Cooperation and Development (OECD) is projecting Canada’s economy will trail all 38 of its member countries this decade. Dead last. Over the past five years, Canada’s per capita GDP – a vital measure of productivity – has remained flat while the average growth of all countries was 5.6 per cent; with U.S. per capita GDP growing 9.3 per cent, resource-rich Australia is up 4.8 per cent.
As other countries increase productivity, Canada is falling behind. This makes it more expensive for Canadians to purchase goods and keeps paycheques lower compared to other countries.
A key driver of productivity growth is investment into and the building of major projects. But Canada is too slow in this regard. A report prepared by consulting firm Advisian for CAPP showed Canada’s major projects approval process lags Germany, Australia, the United States, the U.K. and Sweden.
It is time to start playing to our strengths.
Oil and natural gas currently make up more than half of total global energy supply. A recent RBC report projected by 2035 the world will need to add another United States worth of energy production just to meet the energy needs of a growing global population.
As the fourth-largest oil producer and the fifth-largest natural gas producer in the world, Canada needs to capitalize on this opportunity. The Montney Basin alone, which spans northeastern B.C. and northwestern Alberta, contains enough natural gas to supply all of Canada’s needs for the next 140 years. Our oil reserves are larger than Russia’s.
We have more than enough resources to secure Canada’s energy needs and play a significant role in the energy security of our allies through exports; and we produce oil and natural gas with some of the highest environmental, emissions and human rights standards in the world.
The benefits of exporting our energy resources are significant. For the second year in a row, investment from the Canadian oil and natural gas industry is expected to reach $40 billion. Oil and natural gas exports make up 20% of the country’s total value of trade.
The oil and natural gas sector is among the country’s most productive; the dollar value per working hour in 2022 in oil and natural gas extraction was $387 — six times the average of all industries.
The industry’s supply chain stretches across the country, reaching thousands of businesses located in every province and supporting over 400,000 jobs for Canadians. In addition to being one of the country’s largest employers of Indigenous people, since 2017 almost $4 billion of Indigenous equity positions have been taken in oil and natural gas projects.
Last year oil and natural gas revenues to governments across Canada, through royalties, taxes and other fees, reached over $45 billion. Those revenues enable governments to operate our hospitals, pay our teachers, run critical social programs, and support the arts, contributing to Canadian’s high quality of living.
And there is opportunity for more.
Canada already produces some of the lowest emission natural gas on the planet and lowest emission intensity offshore oil; and as one of the largest investors in clean technologies in Canada, the sector is continuing to focus on lowering emissions. Emissions from the oil and natural gas production peaked in 2015. Since 2012, the conventional upstream sector lowered CO2 equivalent emissions by 24% while growing production by 21%. In addition, along with governments, the country’s six largest oil sands companies are proposing to invest $24 billion in emissions reduction projects by 2030 and are targeting net zero emissions from operations by 2050.
Canada has what it takes to be a global energy superpower: The resources, the talent, the technology, and a growing global market for our responsibly produced products. And we can do this while supporting the drive to lower the world’s emissions.
To make this a reality, we need to recognize the world needs oil and natural gas today and for the foreseeable future. We need a pragmatic, globally competitive policy environment that attracts investment and incents further decarbonization innovation.
We need to support nation-building projects, like LNG export facilities and carbon capture, that create high-paying jobs, enhance Canadian’s paycheques and build on our strength as a resource developer and exporter.
And we need to be proud of Canada’s role as a responsible developer and provider of natural resources for the world.
Lisa Baiton, MBA, ICD.D, is the President & CEO of the Canadian Association of Petroleum Producers
