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Canadian oilsands and the job market

Hydrocarbon Engineering,

Currently, Canadian oilsands production is generating significant economic benefits for Canada in terms of jobs, economic growth and government revenue, reports IHS Cera. The economic contributions from these resources is also expected to grow substantially in the coming years as oilsands production is expected to double by 2025.

The new report, ‘Oilsands Economic Benefits: Today and in the Future’ seeks to quantify the economic impact of the resources. It finds that oilsands production supported more than 478 000 direct and indirect and induced jobs in Canada last year and contributed CAN$ 91 billion in GDP.


In 2012, government revenues in the form of tax receipts and royalties totalled a combined CAN$ 28 billion. The federal share was more than half of the revenue and represented 6% of total federal income, equal to half of federal spending on healthcare transfers in that year also. Revenues would have been even higher had Western Canada crude oils not been subject to price discounts due to export bottlenecks, the study says.

Jackie Forrest, IHS senior director, head of Oilsands Dialogue said, ‘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. Those contributions, in terms of jobs, economic growth and government revenues will continue to grow along with oilsands development.’


IHS expects oilsands production to double from current levels of 1.9 million bpd to 3.8 million bpd in 2025.

Among key findings in the report, IHS expects the following economic contributions from the oilsands in 2025:

  • Jobs from oilsands are expected to grow 58% from today, representing a total 753 000 jobs, equivalent to 5% of total Canadian employment in 2012.
  • The contribution of oilsands to Canadian GDP is expected to nearly double to CAN$ 1171 billion in 2025, comparable to adding an economy the size of Saskatchewan today in Canada.
  • A more than 100$ increase in government revenues from the total effect of oilsands investment in Canada, from CAN$ 28 billion in 2012 to CAN$ 61 billion in 2025. The federal share of revenue would be roughly equivalent to what the federal government spend on healthcare transfers to provinces in 2012.
  • Kevin Birn, IHS associate director said, ‘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. 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 report

The report is based on the combined know how of IHS CERA, IHS Global Insight and IHS Herold. IHS estimated oilsands future capital and operating expenditures using its proprietary oilsands supply, capital cost and operating cost models. The capital spending outlook considered the specific type of investment including labour, process equipment, steel, engineering and other inputs required to grow and maintain oilsands supply. Because comprehensive data on the geographic distribution of direct oilsands investment does not exist, IHS estimates assume all direct spending occurs in Alberta. Since some direct spending occurs beyond the province, this understates the economic impact to other regions of Canada and the US. The economic effects of the oilsands investment was calculated using the latest version of Statistics Canada’s interprovincial input/output model, updated last year. 

Adapted from a press release by Claira Lloyd.

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