Tuesday September 30, 2014

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Energy sector carries big value

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A new report from The School of Public Policy offers an in-depth study of the economic benefits of the energy sector.

Author Trevor Tombe shows that over the last decade, growth in Canada's energy exports is equivalent to nearly $9,000 for every Canadian household in 2012. And this number is not expected to drop, as Tombe reveals that forecasts for the next two decades suggest that exports may double.

While western Canada is setting the pace for energy sector growth, every region plays a key role.

"Today, nearly every province is a net energy exporter," according to the report.

Concerns over the negative implications of the energy sector often do not take into account the benefits of the sector to workers and the economy, according to Tombe's report.

"The energy sector adds much to Canada's economy, with value-added (goods) and productivity higher than any other sector," the report states. "And, when it comes to labour compensation, oil and gas extraction is the highest-paying sector in the country."

Oil and gas employees make more than triple the average hourly earnings of other sectors, and they're nearly double those seen in manufacturing.

"It is vital that policy debates rely on accurate information; unfortunately, this is not always the case. The often heated rhetoric neglects important aspects of Canada's energy trade."

Ten years ago, natural gas was the largest energy export, but today, it accounts for less than one-tenth of total exports. Meanwhile, crude oil exports have more than quadrupled.

Even more surprising to many Canadians, and perhaps even policy-makers, is how much energy Canada imports. Alberta's energy imports have grown faster than any other province, and will soon exceed Ontario, a province more than three the size of Alberta, with a minimal amount of oil production.

As Canada's energy trade grows, so too will the need for intelligent debate, the School for Public Policy states, which will require high-quality and objective information.

They believe that promoting Canada's energy trade requires lowering investment arriers and creating a predictable and stable investment climate for foreign direct investment.


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