Energy and the economy

Our nation’s prosperity and competitiveness are tied to achieving sustainable economic growth and a successful transition to a low carbon future.

Canada is committed to creating a cleaner environment for future generations by investing in clean technologies and increasing energy efficiency.

Key facts

  • In 2018, Canada’s energy sector directly employed more than 269,000 people and indirectly supported over 550,500 jobs
  • Canada’s energy sector accounts for over 11% of nominal Gross Domestic Product (GDP)
  • Government revenues from energy were $14.1 billion in 2017
  • More than $799 million was spent on energy research, development, and deployment by governments in
    2017-18
  • Canada is the sixth largest energy producer, the fifth largest net exporter, and the eighth largest consumer

Find out what Canada is doing to advance the economy through energy

Canada: A global energy leader

The amount of primary energy produced by Canada in 2016 is almost 18% more than in 2005. The world, on average, has increased energy production by 19% in the same period.

Canada has a diverse abundance of energy resources including crude oil, coal, nuclear energy, renewable energy, natural gas and more. Find out how Canada’s energy ranks on an international scale:

Top Energy Producers
Top Energy Producers, 2014 (measured in PJs)
Rank Country Percentage
1 China 17%
2 United States 14%
3 Russia 10%
4 Saudi Arabia 5%
5 India 4%
6 Canada 3%
Global Energy Rankings for Canada
Global Energy Rankings for Canada
Energy Resource Proved Reserve/Capacity Production Exports
Crude Oil 3 4 4
Uranium 3 2 2
Hydroelectricity 4 2 -
Electricity 6 6 2
Coal 16 12 8
Natural Gas 17 4 5

Canadian energy production

Primary energy is energy that is found in nature before any processing or conversion. This type of energy production is calculated using two methods.

  1. Primary energy production, including uranium —treats the energy embodied in uranium as primary energy, thereby capturing the uranium Canada produces and then exports.
  2. Primary energy production, excluding uranium —also employed by the International Energy Agency (IEA) and the United States Energy Information Administration (U.S. EIA), —treats domestic electricity production from nuclear energy as primary energy. Uranium is energy dense and Canada exports most of its uranium production, which explains why the two methods produce such different results.

Primary energy production by source

Primary energy production by source
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Primary energy production, including uranium

According to this method, Canada produced 29,642 petajoules of primary energy in 2017. The breakdown by fuel was: crude oil 32%, uranium 29%, natural gas 24%, hydro 5%, coal 4%, other renewables 3%, natural gas liquids 3%.

Primary energy production, excluding uranium

According to this method, Canada produced 21,385 petajoules of primary energy in 2017. The breakdown by fuel was: crude oil 45%, natural gas 33%, hydro 7%, coal 6%, other renewables 4%, natural gas liquids 4%, nuclear 2%.

Primary energy production by region and source

Primary energy production by source
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Primary energy production, including uranium

According to this method, Alberta produced the most energy in 2016 at about 13,082 petajoules, the majority of which is crude oil and natural gas. Saskatchewan produced the second most with 9,241 petajoules, most of which is uranium. British Columbia produced the third most with about 3,050 petajoules, mostly natural gas and coal.

Primary energy production, excluding uranium

According to this method, Alberta produced the most energy in 2016 at 13,082 petajoules, the majority of which is crude oil and natural gas. British Columbia produced the second most with 3,050 petajoules, mostly natural gas and coal. Saskatchewan produced the third most with 1,448 petajoules, most of which is crude oil.

Trade

International trade of energy is a vital part of the Canadian economy. Canada traded energy with 165 countries in 2018.

Exports

  • $132.2 billion in 2018
  • 23% of total Canadian goods exports in 2018
  • Oil and gas domestic exports totalled over $119 billion, of which 95% were to the U.S.
  • Canada exported energy products to 148 countries in 2018. The U.S. accounts for 89% of energy exports by value ($117.8 billion)

Imports

  • $50.5 billion in 2018
  • 8% of total Canadian goods imports in 2018
  • Canada imported energy products from 120 countries in 2018. The U.S. accounts for 70% of energy imports by value ($35.5 billion)

Canada – U.S. Energy Trade in 2018

Primary energy production by source
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In 2018, Canada’s energy exports to the United States accounted for the following percentages of total production: crude oil 84%, natural gas 46%, uranium 41%, petroleum products 23%, electricity 9%, coal 1%.

Those same exports accounted for the following percentage of U.S. energy consumption: crude oil 21%, natural gas 9%, uranium 24%, petroleum products 3%, electricity 2%, coal 0.1%.

Those exports accounted for the following percentage of U.S. energy imports: crude oil 48%, natural gas 97%, uranium 24%, petroleum products 27%, electricity 100%, coal 13%.

Canadian imports from the U.S. account for the following percentage of Canadian energy consumption: crude oil 23%, natural gas 20%, petroleum products 15%, electricity 2%, coal 20%.

Energy’s nominal GDP contribution for Canada

Primary energy production by source
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The energy sector contributed 230 billion dollars to the nominal gross domestic product in 2018, or 11.1% of total nominal gross domestic product. The energy sector directly contributed 167 billion dollars and indirect contributed 63 billion dollars to nominal gross domestic product.

Including indirect activities, Canada’s energy sector accounts for 11.1% of GDP.

Primary energy production by source
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The province with the highest energy sector contribution to the nominal gross domestic product in 2018 was Alberta, with over 71.5 billion dollars. Followed by Ontario with over 20.4 billion dollars, Quebec with over 16.9 billion, Saskatchewan with almost 12.4 billion, and British Columbia with over 14.6 billion.

Government revenues

Federal and provincial/territorial governments in Canada receive direct revenues from energy industries through:

  • corporate income taxes;
  • indirect taxes (such as sales and payroll taxes);
  • crown royalties – the share of the value of oil and gas extracted that is paid to the Crown as the resource owner; and
  • crown land sales - paid to the Crown in order to acquire the resource use for specific properties.
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Annual average revenue to governments from the energy sector between 2013 and 2017 amounts to 16.8 billion dollars. Royalties accounted for 51%, income taxes for 25%, indirect taxes for 17%, and land sales for 7%.

An important share of government revenues is collected from the oil and gas industry, which averaged $14.8 billion over the last five years, including $11.8 billion from upstream oil and gas extraction and its support activities.

Between 2013 and 2017, the energy sector’s share of total taxes paid by all industries was 7.7% and brought in nearly 11% of all operating revenues earned by governments in Canada.

Primary energy production by source
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The amount of taxes paid by energy industries averaged around 11 billion dollars annually between 2006 and 2009, decreasing significantly in 2010, and then recovering slightly to 7.1 billion dollars in 2018.

Taxes from oil and gas extraction and support activities made up the largest proportion of government tax revenue, averaging nearly 50% and 5.5 billion from 2005 to 2009. Oil and gas extraction’s contribution diminished to 30% in 2018 with utilities increasing their share, representing 29% of energy tax revenue and $2.1 billion.

Employment in Canada’s energy sector

Energy sector employment by province/territory, 2018
Industry Employment(jobs) % of total employment
Energy (Direct) 269,019 1.4%
Oil & Gas 62,042 0.3%
Electricity 84,844 0.5%
Energy (Indirect) 550,588 3.0%
Construction 245,825 1.3%
Total 819,607 4.4%

Energy sector employment by province/territory (2018)

Primary energy production by source
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Employment in the energy sector totalled 819,607 jobs in 2018: 269,019 were direct jobs and 550,588 were indirect jobs. This represents 4.4% of total employment in 2018. Energy employment was largest in Alberta with 143,019, Ontario followed with 41,527, then Quebec with 27,455.

Investing in Canadian energy

Capital expenditures

Capital expenditures in Canada’s energy sector total $75 billion in 2018, 36% lower from a peak in 2014.

Investment has been stable over the last three years, with oil and gas extraction being the largest contributor at $36.7 billion in 2018, followed by electric power generation and transmission at $24.3 billion.

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Capital expenditures in the energy industry rose from 54 billion dollars in 2009 to 117 billion dollars in 2014, decreasing to 75 billion in 2016 before totaling $75 billion in 2018, a decrease of 36% from their peak in 2014. Annual variations are mostly attributed to oil and gas extraction expenditures.

International Investments and Investors

Canada’s energy industries operate in free markets, where investments by both Canadian and foreign companies ensure an efficient, competitive and innovative energy system.

Direct investment in Canada and abroad

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The stock of foreign direct investment (FDI) in the energy sector declined in 2017 from the previous year reaching $180 billion. The stock of Canadian direct investment abroad (CDIA) was valued at 160 billion in 2018.

Stock of foreign direct investment in Canada and Canadian direct investment abroad

  • The stock of foreign direct investment (FDI) in the energy sector rebounded 11% in 2018 following a decrease in the previous year, led by oil FDI in oil and gas extraction assets by the United States, as well as Asia and Oceania.
  • The energy industry’s share of overall FDI in Canada was 23% in 2018, up 1% from 2017.
  • The stock of Canadian direct investment abroad (CDIA) was valued a record high $160 billion in 2018.
  • Investment in oil and gas extraction accounted for $85 billion of the CDIA stock in 2018.

Foreign control of Canadian assets

Foreign control is a measure of the extent to which foreign entities operate in Canada. Generally, a corporation is deemed to be foreign-controlled if more than 50% of its shares are owned by one or more foreign companies.

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The percentage of Canadian utilities under foreign ownership remained between 7% and 10% between 2004 and 2016. It has been on a downward trajectory since 2011, reaching a low of 7% in 2016. The same trend exists for all non-financial industries with foreign ownership between 25% and 28%, reaching 25% in 2016. Foreign control of oil and gas extraction and support activities sees more variation: from 43% in 2004, it decreased to a low of 34% in 2010, rising again subsequently, reaching 43% in 2016.

Canadian energy assets

The total value of Canadian* energy assets (CEA) went up in 2017 to $650 billion, an increase of 12% from 579 million in 2016. In  2017, domestic CEAs totalled $451 billion, up 14% from 2016, while Canadian energy assets abroad totalled $199 billion, up from $183 billion. Assets abroad accounted for 31% of total assets.

*A Canadian company is here defined as a publicly traded company headquartered in Canada and not foreign controlled.

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In 2017, Canadian energy assets abroad totalled 199 billion dollars and were distributed as follows: 450.9 billion in Canada, 162.5 billion to U.S. and Mexico, 13.6 billion in Europe, 9.2 billion in Central and South America as well as the Caribbean, 4.5 billion in Asia, 3.3 billion in Africa and 3.2 billion in Oceania.

Research, development and demonstration

In 2017-18, federal energy RD&D expenditures were $533 million and provincial/territorial (P/T) government energy RD&D expenditures were $266 million for a combined total of $799 million, an increase from $661 million in 2016-17.

In 2017-18, federal spending increased by 14% ($67M) mostly driven by energy efficiency and hydrocarbon spending including increases in carbon capture, utilization and storage (CCUS).

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Canadian public expenditures on energy research, development, and deployment increased from 1.25 billion dollars in the 2012-2013 fiscal year, to 1.35 billion dollars in 2013-2014, decreasing to 894 million in fiscal year 2015-2016 and to 661 billion dollars in 2016-2017 fiscal year. Public expenditures on carbon capture, utilization, and sequestration (CCUS) amounted to 409 million in 2013-2014, more recently in 2017-18 CCUS spending was $57 million. Total Canadian public expenditures in energy RD&D in 2017-18 amounted to $799 million.

Mission Innovation is an international initiative of 25 governments aimed at accelerating global clean energy innovation with the objective to make clean energy widely affordable. In 2015, all Mission Innovation members – including Canada – committed to double public clean energy research, development and demonstration (RD&D) investments over five years. Canadian federal departments, agencies and organizations are well on their way to successfully doubling Canada’s annual clean energy RD&D investment from $387 million in 2014-15 to $775 million in 2019-20.

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In 2017-18, federal spending increased by 14% ($67M) mostly driven by energy efficiency and hydrocarbon spending (incl. CCUS) increases. In 2017-18, P/T spending increased by 36% ($70M) mostly driven by energy efficiency, CCUS and renewable spending increases. Energy efficiency saw a significant increase in both federal and P/T spending – federal spending increase by $43M while P/T spending increase by $30M.

* Provincial and territorial includes utilities and other publicly owned entities.

Clean technology and the economy

What is clean technology?

Clean technology is broadly defined as any process, product or service that reduces environmental impacts: through environmental protection activities, through the sustainable use of natural resources, or through the use of goods that have been specifically modified or adapted to be significantly less energy or resource intensive than the industry standard.

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Clean technology and the energy sector overlap with certain technologies, including renewable / non-emitting energy technologies like solar, wind, hydro, wave, tidal, geothermal, biofuels, biomass, nuclear, carbon capture and storage, transmission technologies like smart grids and energy storage, and energy efficiency technologies like green buildings and cogeneration.

In 2017, the federal government invested in a Clean Technology Data Strategy to provide the foundation for measuring the economic, environmental and social impacts of clean technology in Canada through data development.

As part of this strategy, Statistics Canada has developed the Environmental and Clean Technology Products Economic Account (ECTPEA), which provides a comprehensive picture of the state of Canada’s clean technology economy for years 2007 to 2016.

The ECTPEA includes processes, products, or services that reduce environmental impacts through environmental protection and resource management activities and the use of goods that have been adapted to be significantly less energy or resource intensive than the industry standard.

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In 2017, activities in environmental and clean technology accounted for $62 billion of GDP, which represents 3% of total GDP.

A total of 282,000 jobs were created in 2017 for the activities in environmental and clean technology, representing 1.5% of jobs in the Canadian economy.

Exports of clean technologies, clean energy and environmental goods and services were valued at $12.4 billion in 2017.

Of this, clean energy alone accounted for 1.3% of Canada’s GDP and employed 59,500 people.

The TSX and TSX-Venture exchanges list 83 companies in the cleantech sector, with a total market capitalization of $42.8 billion. This includes companies whose operations fall under:

  • Energy Efficiency
  • Low Impact Material and Products
  • Renewable Energy Equipment Manufacturing and Technology
  • Renewable Energy Production and Distribution
  • Waste Reduction and Water Management

Seventy-two (72) of those companies are headquartered in Canada, with a total market cap of $37.8 billion (as of April 30, 2019).

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In Canada, between 2013 and 2017, 13.7 billion dollars were spent on wind energy technology, 6.0 billion on solar energy technology, 1.0 billion on small hydro energy technology, 0.6 billion on biomass and waste energy technology and 0.9 billion on biofuels technology.

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Clean energy investments in Canada increased from 5 billion U.S. dollars in 2012 to 6.1 billion in 2014, decreasing to 3.4 billion in 2017. Over half of annual investments go to onshore wind energy, with the majority of the rest going to solar photovoltaic projects.

Household expenditures on residential and transportation

  • Canadian households spent $4,281 on average on energy in 2017
  • Residential energy expenditures averaged $2,139
  • Transportation energy expenditures averaged $2,142
  • Energy accounted for 6.7% of current household consumption
  • Lower-income households spend a larger share of their disposable income on energy

Energy retail prices

The “energy” component of the consumer price index (CPI) has been volatile in recent years. This volatility reflects mostly the variations of upstream oil and gas prices and their impact on consumer products such as gasoline.

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The annual consumer price index has risen by 32% between 2002 and 2018. The energy portion of the consumer price index is more volatile but has also been on an upward trend increasing by approximately 60% since 2002.

Sources

Global Primary Energy Production: International Energy Agency Annual Database

Global Energy Rankings: International Energy Agency Annual Database

Canadian Energy Production: Statistics Canada tables 25-10-0020-01, 25-10-0029-01 and 25-10-0007-01 and NRCan estimates

Global Trade: Statistics Canada International Merchandise Trade Database and International Energy Agency Annual Database

Canada – United States Trade: Statistics Canada International Merchandise Trade Database and United States Energy Information Administration (U.S. Imports by Country of Origin)

GDP: Statistics Canada tables 38-10-0285-01, 36-10-0221-01, 36-10-0103-01 and 36-10-0400-01 and NRCan estimates

Government Revenue: Statistics Canada table 33-10-0006-01, Statistics Canada special tabulation (royalties) and Canadian Association of Petroleum Producers Statistical Handbook, table 01-01C (Crown land sales Western Canada and Canada lands)

Employment: Statistics Canada tables 38-10-0285-01, 36-10-0214-01, 36-10-0489-01, 36-10-0480-01, 36-10-0221-01, 36-10-0400-01, 14‑10‑0023‑01, Provincial NRSA special tabulation and NRCan estimates

Capital expenditures: Statistics Canada tables 34-10-0035-01, 34-10-0036-01 and 34‑10-0040-01

Foreign Direct Investment and Canadian Direct Investment Abroad: Statistics Canada table 36-10-0009-01

Foreign control: Statistics Canada tables 33-10-0033-01, 33-10-0005-01 and 33-10-0006-01

Canadian Energy Assets: compiled by NRCan from S&P’s Capital IQ

Canadian Expenditures on Energy RD&D: International Energy Agency Data Services (Data analysis performed by NRCan using the International Energy Agency Energy RD&D survey results for public expenditures) and Statistics Canada (Annual Survey of R&D in Canadian Industry, Energy-related R&D by area of technology for industry expenditures, data analysis performed by NRCan using internal data provided by Statistics Canada)

Clean Energy and Tech Investment: Bloomberg New Energy Finance, TSX and TYSX-V, Statistics Canada, Environmental and Clean Technology Products Economic Account and The Market Intelligence Group report

Household expenditures: Statistics Canada table 11-10-0222-01

Consumer prices: Statistics Canada tables 18-10-0004-01 and 18-10-0001-01