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Oil and gas industry impacts on Canadian economy

Since oil prices collapsed in 2014, Canada has lost over 40,000 jobs in the oil, gas and related industries, according to data released last year by the Canadian Association of Petroleum Producers, an industry group, reports the Thomas Reuters Foundation.

To bring home the importance of the oil and gas industry’s impact on Canada’s economy, a study released last month by the Canadian Energy Research Institute (CERI), an independent, not-for-profit research group, showed the extent to which Canada’s economy was intertwined with the U.S. economy, particularly in relation to the oil and gas industry.

Mining operations in the Athabasca oil sands. Image shows the Athabasca River about 600m from the ta...

Mining operations in the Athabasca oil sands. Image shows the Athabasca River about 600m from the tailings pond. NASA Earth Observatory photo, 2009.
Image is in the Public Domain.

Data compiled by CERI showed that for every job created in Canadian upstream development, two indirect and three induced jobs were created in other sectors, and for every C$1.0 million invested and generated in the Canadian oil and gas sector, the Canadian GDP impact is C$1.2 million.

How do these figures impact the U.S. economy? Canada’s oil and gas sector will contribute $45.6 billion in American gross state product, resulting in 406,000 jobs from goods and services supplied by United States firms to Canada. And although CERI says the number of people employed in the oil and gas industry in Canada is up, statistics show the labor force is shrinking overall.
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According to Statistics Canada, employment in the Forestry, fishing, mining, quarrying, oil, and gas sector dropped from a high of 372.6 thousand workers in 2014 to 326.8 thousand.

GETTING OUT: Cars back up on southbound Highway 63 in Fort McMurray  Alberta  on Wednesday as thousa...

GETTING OUT: Cars back up on southbound Highway 63 in Fort McMurray, Alberta, on Wednesday as thousands of residents flee an out-of-control wildfire believed to have mostly destroyed the city in Canada’s oil sands region.
DarrenRD / Wikimedia Commons

To be more specific, according to Statistics Canada’s most recent labor force survey, there were about 98,000 people employed in oil and gas extraction in July, This was up 5.9 percent from June 2017 and up 23.4 percent from July 2016. Most of the jobs in oil and gas were in Alberta, at 81,400,

And in Alberta, which produces almost 80 percent of Canada’s oil, the unemployment rate is nearly 8.0 percent, mainly due to layoffs from the collapse in oil prices. But interestingly, the province’s renewable energy capacity has been doubling every two years, even though renewables account for only 10 percent of Alberta’s power.

Jim Sandercock, the chair of the alternative energy technology program at the Northern Alberta Institute of Technology, told the Thomas Reuters Foundation, “Solar and other renewable energy used to be expensive, Now they are amongst the cheapest forms of new electricity generation… any new technology has to get past that initial hump.”

Where has the shrinking oil and gas labor force gone?
This is the good news – Ex-oil field workers, after finding no jobs in their field, are abandoning looking for work in the oil and gas sector, opting instead for joining the renewable energy sector. Of course, the oil and gas industry is concerned, saying that if oil prices ever pick back up, they may be in trouble.

 The number of people working in the renewables sector could reach 24 million by 2030  more than off...

“The number of people working in the renewables sector could reach 24 million by 2030, more than offsetting fossil-fuel job losses and becoming a major economic driver around the world.,” says the IRENA report.
EDF Report

“If we see a recovery in Q3 or Q4, then attracting the workers back when they are already settled in other industries or are no longer pursuing jobs in oil and gas would be a difficult task,” Claudine Vidallo, team lead for the division of Enform, told a recent webinar on employment opportunities.

The good thing about the two sectors, oil, and gas along with renewables, is that switching from one to the other in most cases requires minimal training. Jobs skills, like welding, machinery repair, and project management can be easily transferred from the oil industry to solar or other renewable enterprises.

And like so many cities and towns across North America, local governments are pushing the green initiative as concerns over climate change grow and the price of clean energy continues to fall. These factors should spur growth in the clean energy and clean-construction sectors, exactly when it is needed most.

Written By

Karen Graham is Digital Journal's Editor-at-Large for environmental news. Karen's view of what is happening in our world is colored by her love of history and how the past influences events taking place today. Her belief in man's part in the care of the planet and our environment has led her to focus on the need for action in dealing with climate change. It was said by Geoffrey C. Ward, "Journalism is merely history's first draft." Everyone who writes about what is happening today is indeed, writing a small part of our history.

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