A new Conference Board of Canada report assessing the impact of $364 billion CAD worth of investments on Canada’s regions and industry sectors says that a full one-third of the economic benefits of oil sands investment between 2012 and 2035 will be outside Alberta.
The report, titled “Fuel for Thought: The Economic Benefit of Oil Sands Investment for Canada’s Regions,” was presented at the National Buyer Seller Forum in Edmonton.
Oil sands investment is expected to be in the hundreds of billions of dollars over the next 25 years.
Aside from the employment impact, oil sands-related investment is expected to generate government revenues of $79.4 billion ($45.3 billion in federal revenues and $34.1 for provinces) between 2012 and 2035, on an inflation-adjusted basis. This includes the effects of personal income taxes, corporate profit taxes, and indirect taxes (such as sales taxes and taxes on fuel).
“The development of Canada’s oil sands deposits constitutes one of the largest development projects in the country’s history,” said Michael Burt, director of Industrial Economic Trends. “It is so large that it will rival massive public works projects in scale, such as the building of the Interstate Highway System in the United States.”
As for the employment impact, the study details the supply chain effects of 1.45 million person-years of employment in a variety of industries, but predominately in oilfield services, professional services, manufacturing, wholesale trade, financial services, and transportation.
The majority of the supply chain employment effects (70 per cent) will occur in Alberta, geared toward industries where oil and gas in general, and oil sands in particular, are a major source of revenues.
The share of supply chain effects outside Alberta is broken down by percentage and industry type as follows:-
Ontario (14.8 per cent): Above-average employment effects will occur in services, but also in manufacturing inputs for the oil sands.
British Columbia (6.7 per cent): Plastic products, paper products, and wood products all experience above-average effects. So do scientific services, legal and accounting services, computer services and transportation and travel-related industries.
Quebec (3.9 per cent): Supply chain effects are tied to the large businesses that are headquartered in Quebec, such as CGI for computer services and CN for rail transportation.
Prairies (3.7 per cent): Rail and truck transportation, steel mills, metal tanks, steel pipes and tubes, printing, and medical equipment and supplies gain from supply chain effects related to oil sands investment.
Atlantic Canada (0.8 per cent): Ornamental and architectural metal products; construction machinery; navigational, measuring, medical, and control instruments; and tire manufacturing.
This study was funded by the Government of Alberta and Industry Canada. Read the full Conference Board of Canada report – Download (free registration required)