Oilsands the behemoth of Canada’s economy, study finds

The oilsands, Canada’s biggest industry, make an economic contribution to the country that in 2012 was far greater than Saskatchewan’s, a new study has determined.

And with oilsands production expected to double by 2025, the benefits to Alberta and every province, as well as the U.S., are expected to double. That’s according to Oilsands Economic Benefits: Today and in the Future, a report prepared by U.S.-based IHS in co-operation with three Canadian university business departments and various petroleum associations and companies.

The study found that oilsands production supported more than 478,000 direct, indirect and induced Canadian jobs in 2012 — three per cent of all jobs in the country — and contributed $91 billion of Canada’s gross domestic product. Saskatchewan’s contribution to GDP in 2012 was $78 billion.

By 2025, 753,000 jobs — equivalent to five per cent of total Canadian employment in 2012 — will be linked to the oilsands.

“Oilsands production already represents a significant economic contribution to the Canadian economy, with annual expenditures already greater than the gross domestic product of half of the Canadian provinces,” said Jackie Forrest, IHS senior director, who heads the IHS CERA Oil Sands Dialogue.

IHS expects oilsands production to double from the current 1.9 million barrels per day to 3.8 million by 2025.

The oilsands are a capitalintensive industry, with continuing investment needed to sustain production. In fact, 80 cents of every dollar made by oilsands operations was reinvested to maintain and move production to market in 2012, said Kevin Birn, IHS associate director.

“The economic benefit of oilsands is considerably greater than the amount of money oilsands companies invest, or the number of people who work directly in the industry,” Birn said. “Each dollar invested in oilsands spurs additional spending across other sectors of the economy. Oilsands development depends on a multitude of other industries — such as construction, engineering, geology, finance, manufacturing, environmental analysis and hospitality.”

The study expects government revenues from the total effect of oilsands investment in Canada to jump from $28 billion in 2012 to $61 billion in 2025.