How Natural Resources Fuel the Canadian Economy: 15 Facts

How Natural Resources Fuel the Canadian Economy: 15 Facts

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How natural resources underpin Canada's economy

This blog has been edited due to Bill C-59

Natural resources are to Canada as water is to a river; they are pivotal to our nation’s flow and vitality, driving economic currents and nurturing ecosystems of commerce and community.

The economic impact of our resource industries – energy, mining, forestry, agriculture – on the Canadian economy cannot be understated. When including the entire agri-food sector, they account for nearly a quarter of all economic activity and support over a fifth of all jobs nationwide.

Natural resource products represent more than half of Canada’s total exports of goods and services. As the world’s second-largest country with just half a per cent of its population, Canadians rely heavily on these exports to “pay the bills” for other imported manufactured goods and services we need to survive and thrive. In short, Canadians would be much worse off if it weren’t for our incredible wealth of energy reserves, mineral ores and metals, fertile farmland and vast forests.

Below are several facts showing how natural resources fuel Canada’s economy, plus more on the critical importance of the energy, agriculture, mining and forestry sectors for our overall wealth and prosperity. Also see:

Natural Resources & Canada’s Economy: 13+ Facts

1. Canada’s energy, mining and forestry sectors accounted for 17.1% of the country’s economy (12.9% direct, 4.1% indirect), or nominal gross domestic product (GDP) in 2021 [2]

Energy (direct) – 7.4%

Minerals & Metals (direct) – 3.9%

Forestry (direct) – 1.7%

2. When including the agri-food sector, natural resources accounted for roughly one-quarter – or 24.1% - of Canada’s economy (GDP) in 2021 [2][4]

3. Canada’s energy, mining and forestry sectors accounted for 1.6 million jobs across the country (867,000 direct, 758,000 indirect) in 2021 [2]

Energy (direct) – 254,000

Minerals and metals (direct) – 403,000

Forestry (direct) – 211,000

4. When including the agri-food sector, natural resources account for 3.9 million of 17.4 million jobs – or more than 22% of all jobs in Canada [2][4]

5. Canadian energy, mining and forestry companies accounted for 30% - or $86 billion - of total non-residential capital investment in the country in 2021, with energy accounting for the lion’s share of that investment at $66 billion [2]

6. Canada’s natural resource exports were valued at $319 billion in 2021, accounting for more than 50% of the value of Canada’s total merchandise exports [1][2]

               Energy accounts for 20%

               Mineral ores and metals for 14%

               Agri-food for 12%

               Forestry products for 6%

7. Canadian governments generated an average of $20.1 billion in revenues annually from the energy, mining and forestry sectors from 2015 to 2019 [2]

8. Canada has 470 major resource projects under construction or planned over the next decade worth $520 billion in investment, with energy accounting for the lion’s share of that at $427 billion [2]

9. Canada was home to 900 communities that were economically reliant on at least one of the energy, mining and forestry sectors. Of these communities, 609 are either significantly or highly reliant on at least one of these industries. [2]

10. Clean technologies, clean energy and environmental goods and services accounted for $67.5 billion (3.3%) of Canada’s nominal GDP and provided 323,000 jobs in 2021 [2]

11. Canada’s natural resource assets – stocks that are physically accessible and available for harvest – were valued at more than $2.52 trillion in 2022, categorized as follows [3]:

Energy – $1.61 trillion - coal, crude bitumen, crude oil, and natural gas

Minerals – $465 billion - copper, nickel, diamonds, gold, iron, zinc, molybdenum, uranium, potash

Timber - $442 billion

12. Canada’s energy sector generated $755 billion in gross revenues (personal and corporate federal and provincial income taxes, indirect taxes, royalties, and crown lease payments) for Canadian governments between 2000 and 2021. The oil and natural gas sector accounted for $578.7 billion, or nearly 77% of these revenues [5].

13. Canada’s oil and natural gas sector is projected to generate an additional $597 billion in government revenues from 2023 to 2032 – totalling over $1.1 trillion for Canadian governments between 2000 and 2032 [5][6]

Natural Resources & Economic Opportunities in Canada

A healthy natural resources sector involves substantial capital expenditures and investment, resulting in significant economic opportunities for Canadians and Indigenous Peoples.

Developing our energy, mining, forestry and agriculture resources provides families with immediate economic benefits through paychecks while our businesses step up to supply the goods and services required for such massive projects.

With such comes a broad range of employment opportunities ranging from labour-intensive to technically skilled. These jobs provide workers with specialized training and skill development, which, for many, turn into long-term and well-paying careers.

Energy & the Canadian Economy

Canadian energy projects are a great example of the widespread and invaluable economic benefits experienced by local and Indigenous communities.

Coastal GasLink (CGL), a long-distance transmission pipeline transporting natural gas supply from Northeastern British Columbia to liquefaction facilities on the western coast for export, created more than 25,700 full-time equivalent jobs over five years of construction. The project spent $3.95 billion on businesses and suppliers in the province, acquired over $1.8 billion of contracts with local and Indigenous companies, and trained more than 750 personnel in erosion and sediment control.

The Trans Mountain Pipeline expansion (TMX), another long-distance oil pipeline that will transport additional volumes of oil to the B.C. coast for export and help Canada maximize the value of its energy resources, hired more than 34,500 people during its construction. As of September 2023, more than 12,300 people were working on the project.

As of 2023, Canada was home to 223 planned (announced, under review, or approved) energy projects worth $294 billion and 120 energy projects under construction worth $180 billion, totalling $474 billion of potential investment. Oil & natural gas accounted for the largest portion, at $319 billion. There were also 233 cleantech projects valued at $159 billion [7].

B.C. Mining & the Canadian Economy

The Mining Association of British Columbia (MABC) recently conducted a study on the potential economic impacts of 16 critical mineral mines under development within the province, the results of which were incredible.

According to the report, developing all 16 mines would result in long-term economic impacts:

  • $791.7 billion in economic activity
  • $398.3 billion in GDP
  • $183.8 billion in labour income
  • 2,155,000 person-years of employment
  • $154.5 billion in tax revenues

B.C. critical mineral mines represent just a fraction of the potential natural resource projects that could be developed nationwide.

How many more trillions of dollars of wealth and prosperity could be generated for Canadians if we pursued the responsible development of energy, forestry, mining and agriculture projects in a timely manner that didn't scare off investors with overburdening and lengthy regulatory processes?

Canada’s Economy Is Natural Resources

It is difficult to picture a Canada without its job-creating, wealth-generating resources.

The energy, forestry, mining and agriculture sectors account for such a large portion of our economy; to hinder the responsible development of these natural resources is to hinder the advancement of Canadian and Indigenous prosperity at its core.

Canada needs policies that balance economic prosperity and environmental protection while advancing the responsible development of our natural resource sectors. We could be the richest country in the world, but for too long we have sat on the sidelines and let our competitors develop their resources to our loss (look to U.S. LNG as an example).

Amid geopolitical instability, soaring living costs, and economic uncertainty, Canadians can no longer afford to ignore the vast wealth of natural resources we have at our disposal. Global resource demand for oil, natural gas, food, lumber, and minerals is growing — our world-class protections for human rights and the environment means we should be a go-to supplier for all of the above.

SOURCES:

1 - https://www.fraserinstitute.org/article/natural-resources-comprise-more-than-half-of-canadas-exports-compared-to-1-percent-for-clean-tech#:~:text=Natural%20resource%20products%20represent%20more,cent%20of%20the%20country's%20exports.

2 - https://natural-resources.canada.ca/sites/nrcan/files/emmc/pdf/NRCan_Key_Facts_Figures_Update_EN-2022.pdf

3 - https://www150.statcan.gc.ca/n1/daily-quotidien/231122/cg-d001-eng.htm

4 - https://agriculture.canada.ca/en/sector/overview

5 - https://www.canadianenergycentre.ca/755-billion-the-energy-sectors-revenue-contribution-to-canadian-governments-2000-2021/

6 - https://www.canadianenergycentre.ca/495-billion-in-government-revenues-from-the-canadian-oil-and-gas-industry-projected-over-next-decade/

7 - https://energy-information.canada.ca/sites/default/files/2023-10/energy-factbook-2023-2024.pdf