OTTAWA — The federal Conservatives have re-calculated the national economic impact of energy and mining to help defend their strong support of the natural-resource sector against environmentalists and others.
Natural
Resources Minister Joe Oliver says his officials have calculated how much
income the sector brings to the economy — instead of just counting barrels of
oil and tones of metal.
In
2011, the figures show, energy, forestry, metals and minerals directly
accounted for 15% of the country’s income.
When
indirect effects are taken into account, Oliver said, natural resources drive
20% of the economy — and about 10 % of all the jobs in Canada.
“It’s
not all oil sands and it’s not all Alberta,” Oliver said in the text of a
speech Tuesday to the business community in Toronto.
“It
is forestry in British Columbia, potash and uranium in Saskatchewan, mining in
Ontario’s Sudbury basin, hydro power in Quebec and all the related supply
chains.”
Normally,
anyone interested in the heft of the natural-resource sector has had to rely on
less-than-optimal data.
It’s
not all oil sands and it’s not all Alberta
The
real gross domestic product figures that come out every three months don’t
capture the huge impact of global prices on the economy. And nominal GDP
figures by industry, which include the price effect, have only been available
for up to 2008 — ancient history when it comes to calculating the impact of a
major, evolving part of the economy.
Now,
government officials have developed a way to update the nominal GDP numbers for
the natural-resource sector so that they can see how much money is flowing into
the economy from energy and mining on a more timely basis.
Oliver
said the exercise shows that in both Alberta and Saskatchewan, energy and
resources directly accounted for one third of nominal GDP. In Newfoundland and
Labrador, it’s 40%.
However,
officials did not immediately explain their methodology, nor did they make a
full year-by-year and province-by-province analysis available.
Oliver
said the calculations can be used to determine that natural resources support
800,000 direct jobs and another 800,000 indirect jobs in other sectors.
The
impact will continue to grow, the minister added.
The
department’s most recent calculations project $650-billion in investment in
about 600 major resource projects over the next 10 years. That’s up from
previous estimates of $500-billion.
“That
$650-billion figure represents hundreds of thousands of high-quality,
well-paying jobs for Canadian middle-class families in every sector of our
economy, in every region of the country,” Oliver said.
The
Harper government has been at pains to make that point since it overhauled the
country’s environmental assessment process in its spring budget.
Federal
ministers have argued repeatedly that streamlining environmental assessment is
an efficiency exercise that will protect the environment but also make it
easier for every region of the country to benefit from natural resources.
But
their arguments have been drowned in an outcry from environmentalists and other
critics who say Ottawa is sacrificing the environment to the interests of the oil
patch.
Regardless,
the new numbers from Natural Resources are well worth having, said Avery
Shenfeld, chief economist at CIBC World Markets Inc.
“I
think it’s important for Canadians to realize how big the resource sector has
become,” he said in an interview.
He
agreed that looking at nominal GDP by industry would give a more precise
picture of the impact of natural resources, mainly because the global
marketplace values commodities far more than traditional calculations of GDP
would suggest.
“If
you just focus on how many barrels of oil and tones of nickel and aluminum that
Canada produces, you would understate the rising importance of those raw
materials,” Shenfeld explained.
“Because
what’s really been happening is that what we can exchange them for in trade
with other countries has grown much more markedly than volume.”
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