Energy and the economy

Our nation’s prosperity and competitiveness are tied to achieving sustainable economic growth and a successful transition to a lower 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 2017, Canada’s energy sector directly employed more than 276,000 people and indirectly supported over 624,000 jobs
  • Canada’s energy sector accounts for almost 11% of nominal Gross Domestic Product (GDP)
  • Government revenues from energy were $10.3 billion in 2016
  • More than $650 million was spent on energy research, development, and deployment by governments in
    2016-17
  • 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 2015 is almost 17% 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 18%
2 United States 15%
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 29,331 petajoules of primary energy in 2016. The breakdown by fuel was : crude oil 31%, uranium 32%, natural gas 24%, hydro 5%, coal 5%, other renewables 3%, natural gas liquids 2%.

Primary energy production, excluding uranium

According to this method, Canada produced 20,436 petajoules of primary energy in 2016. The breakdown by fuel was : crude oil 44%, natural gas 34%, hydro 7%, coal 7%, other renewables 4%, natural gas liquids 3%, 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 156 countries in 2017.

Exports

  • $112.6 billion in 2017
  • 22% of total Canadian goods exports in 2017
  • Oil and gas domestic exports totaled over $97 billion, of which 97% were to the U.S.
  • Canada exported energy products to 145 countries in 2017. The U.S. accounts for 91% of energy exports by value ($102.2 billion)

Imports

  • $41.2 billion in 2017
  • 7% of total Canadian goods imports in 2017
  • Canada imported energy products from 114 countries in 2017. The U.S. accounts for 65% of energy imports by value ($26.8 billion)

Canada – U.S. Energy Trade in 2017

Primary energy production by source
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In 2017, Canada’s energy exports to the United States accounted for the following percentages of total production: crude oil 79%, natural gas 51%, uranium 41%, petroleum products 22%, electricity 11%, coal 1%.

Those same exports accounted for the following percentage of U.S. energy consumption: crude oil 21%, natural gas 11%, uranium 33%, petroleum products 3%, electricity 2%, coal 0.1%.

Those exports accounted for the following percentage of U.S. energy imports: crude oil 43%, natural gas 97%, uranium 25%, petroleum products 28%, electricity 99%, coal 11%.

Canadian imports from the U.S. account for the following percentage of Canadian energy consumption: crude oil 20%, natural gas 20%, petroleum products 11%, electricity 2%, coal 14%.

Energy’s nominal GDP contribution for Canada

Primary energy production by source
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The energy sector contributed 213 billion dollars to the nominal gross domestic product in 2017, or 10.6% of total nominal gross domestic product. The energy sector directly contributed 146 billion dollars and indirect contributed 67 billion dollars to nominal gross domestic product.

Including indirect activities, Canada’s energy sector accounts for 10.6% 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 2017 was Alberta, with over 79.6 billion dollars. Followed by Ontario with over 15.8 billion dollars, Quebec with almost 15 billion, Saskatchewan with over 13 billion, and British Columbia with almost 13 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 2012 and 2016 amounts to 17.8 billion dollars. Royalties accounted for 51%, income taxes for 26%, indirect taxes for 15%, and land sales for 8%.

An important share of government revenues is collected from the oil and gas industry, which averaged $15.7 billion over the last five years, including $12.8 billion from upstream oil and gas extraction and its support activities.

Between 2012 and 2016, the energy sector’s share of total taxes paid by all industries was 8.4% and brought in over 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 stabilizing to about 7 billion dollars from 2010 to 2016.

The amount of taxes paid by oil and gas companies fell by 38% from 2006 to 2016, largely as a result of declines in oil and gas prices.

Employment in Canada’s energy sector

Energy sector employment by province/territory, 2017
Industry Employment(jobs) % of total employment
Energy (Direct) 276,432 1.5%
Oil & Gas 67,133 0.4%
Electricity 78,351 0.4%
Energy (Indirect) 624,354 3.4%
Construction 250,330 1.4%
Total 900,785 4.9%

Energy sector employment by province/territory (2017)

Primary energy production by source
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Employment in the energy sector totalled 900,000 jobs in 2017: 276,000 were direct jobs and 624,000 were indirect jobs. This represents 4.9% of total employment in 2017. Energy employment was largest in Alberta with 146,776 jobs, Ontario followed with 42,618, then Quebec with 28,176.

Investing in Canadian energy

Capital expenditures

Capital expenditures in Canada’s energy sector total $71 billion in 2017, a decrease of 39% from its peak in 2014.

A reversal in 2017 after two years of capital expenditure declines in the energy sector was driven by a $1 billion increase from 2016 in electric power generation, transmission and distribution spending, and an additional $0.7 billion in pipeline transportation.

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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 $71 billion in 2017, a decrease of 39% 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 $126 billion in 2017.

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

  • The stock of foreign direct investment (FDI) in the energy sector declined 12% in 2017 from the previous year, driven primarily by a $17 billion decrease in oil and gas extraction assets.
  • The energy industry’s share of overall FDI in Canada was 22% in 2017, down 3% from 2016.
  • The stock of Canadian direct investment abroad (CDIA) was valued at $126 billion in 2017.
  • Investment in oil and gas extraction accounted for $59 billion of the CDIA stock in 2017.

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 2016 to $569.3 billion, an increase of almost 6% from $539.2 billion in 2015. In 2016, domestic CEAs totalled $388.5 billion, down 1% from 2015, while Canadian energy assets abroad totalled $180.8 billion, up from $146.3 billion. Assets abroad accounted for 32% 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 2016, Canadian energy assets abroad totalled 180.8 billion dollars and were distributed as follows: 388.5 billion in Canada, 147.0 billion to U.S. and Mexico, 13.5 billion in Europe, 9.2 billion in Central and South America as well as the Caribbean, 4.1 billion in Asia, 3.7 billion in Africa and 3.2 billion in Oceania.

Research, development and demonstration

In 2016/17, federal energy RD&D expenditures were $466 million and provincial/territorial* (P/T) government energy RD&D expenditures were $195 million for a combined total of $661 million, down from $894 million in 2015/16.

In 2016/17, federal spending was more than double P/T spending. The reduction in total spending relative to 2015-16 was largely driven by a decrease in P/T spending, particularly in the area of CCUS.

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Canadian public expenditures on energy research, development, and deployment increased from 1.02 billion dollars in the 2011-2012 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 increased from 87 million dollars in 2011-2012 to 409 million in 2013-2014, but decreased to 184 million in 2015-2016 then again to 34 in 2016-2017.

A subset of this data is used to report Canada’s progress under Mission Innovation, an international initiative of 24 governments aimed at accelerating global clean energy innovation. Canadian federal departments, agencies and organizations increased their Mission Innovation related expenditures to $479 million in 2015/16, or 24% higher than the baseline level in 2014/15**.

Mission Innovation is an international initiative of 24 governments aimed at accelerating global clean energy innovation. Canadian federal departments, agencies and organizations increased their Mission Innovation related expenditures to $438 million in 2016-17, or 13% higher than the baseline level in 2014-15.

The Canadian industry spent about $1.6 billion on energy R&D in 2015, a notable decrease from $2.1 billion in 2014.

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In the 2016-2017 fiscal year, federal expenditure on energy research, development, and deployment was 91 million on fossil fuels (including carbon capture, utilization, and sequestration), 227 million on renewable and clean energy, and 148 million on energy end use, totalling 466 million dollars. Provincial and territorial governments invested 82 million on fossil fuels, 85 million on renewable and clean energy and 29 million on energy end use, totalling 195 million. Industry, in 2015, invested 983 million on fossil fuels, 361 million on renewable and clean energy and 219 million on energy end use, totalling 1,563 million. Renewable and clean energy supply includes renewables and nuclear energy. Energy end use includes energy efficiency related to transport, industry and buildings and communities.

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

** Canada’s Mission Innovation baseline of $387 million is a subset of Canada’s federal energy RD&D spending of $416 million in 2014-15 that excludes nuclear activities not directly related to clean energy RD&D.

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 2016, activities in environmental and clean technology accounted for $59.3 billion of GDP, which represents 3.1% of total GDP.

A total of 274,000 jobs were created in 2016 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 $11.5 billion in 2016.

Of this, clean energy alone accounted for 1.3% of Canada’s GDP and employed 56,000 people.

The TSX and TSX-Venture exchanges list 90 companies in the cleantech sector, with a total market capitalization of $40.8 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-seven (77) of those companies are headquartered in Canada, with a total market cap of $37.1 billion (as of May 31, 2018).

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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 $4,086 on average on energy in 2016
  • Residential energy expenditures averaged $2,136
  • Transportation energy expenditures averaged $1,950
  • Energy accounted for 6.6% 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