Canada's Economy is Struggling. Natural Resource Development Can Help Turn Things Around.

Canada's Economy is Struggling. Natural Resource Development Can Help Turn Things Around.

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Canadian families are struggling economically - natural resource development can help Canada's economy turn around

Canadian families are struggling to make ends meet, and our economy is in trouble. Whether it be decreasing labour productivity, dropping capital investment, or poor gross domestic product (GDP) growth per capita, it should be no surprise that these “economic” red flags are often accompanied by a struggling-to-perform natural resources sector.

Canada relies heavily on its energy, forestry, mining, agriculture, and fishing sectors to generate job-creating, prosperity-generating economic activity for Indigenous and non-Indigenous families from coast to coast. Accounting for 45% of our manufacturing output, 58% of our total exports, 19.2% of our national economy and millions of jobs, all Canadians should be concerned when our resource industries aren’t performing as well as they could be.

Below, we explore several facts showing the current economic plight of the Canadian economy, with further insight as to how a strong natural resources sector typically translates to a strong and prosperous economic future for our country and could help turn things around.

Lowest GDP Per Capita Growth Through 2060

Canada's projected GDP per capita annual growth rate is lowest among 30 OECD nations through 2060

At an average of 0.78% growth per annum through 2060, Canada is projected to have the lowest GDP per capita growth rate amongst 30 Organisation for Economic Cooperation and Development (OECD) countries [1].

Lowest Per Capita GDP Growth Rate Over Past 10 Years

Canada's GDP per capita growth rate over past 10 years ranks 33 out of 35 in the OECD

Over the past decade, Canada has had the third-lowest per capita GDP growth in the OECD, placing 33rd out of 35 countries according to the World Bank [2].

LNG Project Approval Timelines Take Much Longer than in U.S.

It takes 19 months longer in Canada to approve LNG project permits than it does in the United States

Liquefied natural gas (LNG) project approvals in Canada take an average of 19 months longer for approval than in the United States [3].

Completed Natural Resource Projects Drop Significantly

Completion of major natural resource projects in Canada has dropped 37 percent

The number of completed major energy and natural resource projects in Canada dropped by 37% between 2015 and 2023 - from 88 projects to 56 projects, while the ones that get done like the Trans Mountain Pipeline Expansion or Site C Hydro Dam are beset by significant delays and cost overruns [4].

Average Time to Bring a New Mine Online

it takes 18 years to bring a new mining online from exploration to production in Canada

The average time to get from discovery to production for new mines in Canada is 18 years; critical minerals production is down, in many commodities by double digits since 2018 [4].

Business Investment in Oil & Natural Gas Sector Down

Canadian oil and gas sector investment has dropped 52.1 per cent since 2014

Since 2014, job-creating business investment in Canada’s conventional oil and natural gas sector has dropped by 52.1%. Furthermore, Since 2014, business investment in the extractive sector (mining, quarrying, oil and gas) declined from $101.9 billion to $49.7 billion in 2022, a drop of 51.2% [5].

Cancelled or Suspended Natural Resource Projects

Since 2015, canada has seen 670 billion dollars in cancelled or suspended natural resource projects

Since 2015, Canada has seen nearly $670 billion in job-creating, prosperity-generating natural resource projects suspended or cancelled [6].

Canada's Significant Trade Deficit, If Not for Energy

If it weren't for Canada's energy sector, the country would have a 1 trillion dollar trade deficit over the past 10 years

Natural Resource Projects Create Prosperity

The National Bank of Canada (NBF) released a report earlier this year highlighting Canada’s decreasing labour productivity and struggle to attract business investment. The NBF concluded that new private investment could help Canada come back from the economic hole it is in.

It’s no secret that natural resource projects are some of the largest private capital investments in the country.

natural resources account for more than 50 per cent of Canada's goods and services exports annually

Some examples of planned/underway major natural resource projects and their potential economic impacts on local workers and businesses [7] :

  • LNG Canada Phase 1 (BC) - $47.9 billion
  • LNG Canada Phase 2 (BC) - $25 billion
  • Kitimat Clean Oil Refinery (BC) - $22 billion
  • Coastal GasLink (BC) - $14.5 billion
  • Bruce Nuclear Refurbishment (ON) - $13 billion
  • Darlington Nuclear Refurbishment (ON) - $12.8 billion
  • Athabasca Oil Sands Project at Jackpine (AB) - $12 billion
  • Keeyask Hydro Project (MB) - $8.2 billion
  • Bear Head Energy (NS) - $8 billion
  • Jansen Potash Project (SK) - $7.5 billion
  • La Romainse Hydroelectric Complex (QC) - $6.5 billion
  • West Rose Oil Expansion Project (NL) - $3.8 billion
  • Casino Mine (YK) - $3.3 billion
  • Mactaquac Dam Upgrades (NB) - $3.3 billion
  • Champlain Hudson Power Express Transmission Line (QC) - $2.2 billion
  • NextGen Energy Rook I Uranium Project (SK) - $1.3 billion

According to Natural Resources Canada, there are 493 major projects under construction or planned for over the next ten years in the country, with a total combined potential capital value of $572 billion. However, with an overburdening regulatory process and poor business climate, it has yet to be seen how many of these projects are completed.

natural resources account for 45 per cent of Canada's manufacturing output

Some examples of cancelled or suspended natural resource projects in Canada over the past several years, along with their price tag - or projected direct economic impact from construction:

  • Pacific NorthWest LNG (BC) - $36 billion
  • Prince Rupert LNG Aurora (BC) - $28 billion
  • WCC LNG (BC) - $25 billion
  • Teck Frontier Mine (AB) - $20.6 billion
  • Steelhead LNG (BC) - $18 billion
  • Mackenzie Valley Pipeline Project (NT) - $16.1 billion
  • Energy East (CA) - $15.7 billion
  • Joslyn Oil Sands (AB) - $11 billion
  • Grassy Point LNG (BC) - $10 billion
  • Keystone XL (AB, SK) - $8 billion
  • Northern Gateway (AB, BC) - $7.9 billion
  • Black Thor Project (ON) - $4.4 billion
  • Carmon Creek Oilsands (AB) - $3 billion
  • Aspen Oil Sands (AB) - $2.6 billion
  • New Prosperity Mine (BC) - $1.5 billion
  • Ajax Copper mine (BC) - $1.5 billion
  • Star Diamond Mine (SK) - $1.4 billion

The list of potential projects that would have attracted massive private capital investments into our country goes on, and on.

Let’s not forget the significant indirect and induced economic benefits that would have stemmed from these now-defunct natural resource projects in terms of jobs, exports, and the sourcing of goods and services to continue operations.

Natural Resources are the Bedrock of Canada's Economy

more than 900 communities across canada are economically reliant on at least one natural resource sector

Canadian and Indigenous families can no longer afford to miss natural resource development and the massive economic opportunities these projects create for our communities.

Whether it be long-term and well-paying jobs, spending billions of dollars in acquiring goods and services from local businesses, or generating billions more for our governments to pay for social programs and public infrastructure, Canadians must take advantage of these opportunities if they want a strong and prosperous economic future.

Join us today to learn more about the oversized contributions our energy, forestry, mining, and agriculture sectors make to our economy, and how they underpin our standard of living and quality of life at large.

Join Us Today!

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SOURCES:

1 – https://www.fraserinstitute.org/sites/default/files/were-getting-poorer-gdp-per-capita-in-canada-and-oecd-2002-2060.pdf

2 - https://x.com/MikePMoffatt/status/1815032025847333362

3 - https://www.fraserinstitute.org/article/canadas-lost-lng-opportunities-due-to-dearth-of-export-facilities#:~:text=A%25202020%2520study%2520by%2520the,approximately%252019%2520more%2520months%2520to

4 - https://thehub.ca/2024/05/27/michael-gullo-and-heather-exner-pirot-we-all-agree-canada-must-get-more-projects-built/

5 - https://www.fraserinstitute.org/sites/default/files/ottawas-regulatory-assault-on-extraction-sector-and-impact-on-investment.pdf

6 - https://thehub.ca/2024/05/13/deepdive-canadas-natural-resources-are-a-long-neglected-golden-goose/

7 - https://natural-resources.canada.ca/sites/nrcan/files/emmc/pdf/2023/2023-Major-Projects-Inventory-Report_EN_14Nov2023_OP.pdf

8 - https://macdonaldlaurier.ca/canadas-resource-sector-protecting-the-golden-goose-philip-cross-jack-mintz-paper/