ARCHIVED - Economic Impact of Canada’s Natural Resources Sector

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Canada has excelled in transforming its vast endowment of natural resources into world-leading resource industries. Today, Canada’s natural resources sector is a significant component of the national, provincial and territorial economies, contributing to high living standards for Canadians. In 2011, this sector directly accounted for 15 per cent of nominal gross domestic product (GDP) and 790,896 jobs.

In addition, through the purchase of goods and services from other sectors such as construction, machinery, professional services, transportation, the natural resources sector makes considerable indirect contributions to the Canadian economy. Using Statistics Canada’s input-output model, this indirect contribution to nominal GDP is estimated at about $70 billion in 2011, or about 4 per cent of Canadian nominal GDP. Correspondingly, over 800,000 jobs in other sectors were supported by the purchase of goods and services by the resources sector.

The potential for continued growth in the natural resources sector remains strong. There are currently over 600 major Canadian resource projects planned over the next 10 years or underway representing approximately $650 billion in investments, a significant increase from the $500 billion in investments that had been identified a year ago. Investment in these projects is at varying stages. Of this total, roughly $150 billion is being invested in major projects currently under construction. The remaining projects are proposed investments over the next 10 years, including approximately $200 billion in major projects that have received approvals and secured financing, and $300 billion in projects which are in earlier stages of planning (i.e. undergoing environmental review, feasibility studies or in the process of securing financing). Investment in these projects will have a significant economic impact by contributing to jobs and growth across all regions.


Nominal GDP

To measure economic activity, the indicator most often used is GDP, which is published in constant dollar terms (real GDP), and current dollar terms (nominal GDP). The chief difference between real and nominal GDP is how they account for price variations. Real GDP uses 2002 market prices as a base and focuses on production volume. The rate of change in real GDP is the most commonly used measure of economic growth. Nominal GDP is based on current prices and captures effects of both production volumes (quantity produced) and prices (rising or falling commodity / product prices). It is generally recognized that nominal GDP is a more accurate indicator to measure a sector’s share of the economy as it captures the total income generated by a sector.

Nominal GDP is available through to 2008 from Statistics Canada. Natural Resources Canada has developed a methodology to project nominal GDP in the natural resources sector to 2011. The approach reconciles available Statistics Canada data, while making certain assumptions, in order to produce authoritative estimates of the role the natural resources sector played in the Canadian economy in 2011.

Indirect contribution

Statistics Canada’s Input-Output model provides detailed information on the structure of over 300 industries. The most recent year for which it is available is 2008. It outlines what type of products, services and commodities these industries purchased, as well as which industries they were purchased from. For example, natural resource development translates into increased activity in the construction industry. Using this methodology, as well as growth rates in GDP between 2008 and 2011, Natural Resources Canada estimated employment and GDP occurring in other sectors of the economy as a result of activity in the natural resource industries.

Potential investment in major natural resources projects

The estimated value of investment in major Canadian natural resource projects currently under construction or planned over the next 10 years was compiled by Natural Resources Canada and is current to August 2012. This year’s inventory includes a more comprehensive list of resource projects compared to the previous year and reflects a significant net increase in new capital investment across the sectors. The main sources used were project inventories from provincial and territorial governments, industry associations, private organizations, media releases, and company websites. Provincial and territorial government officials were consulted in order to validate project information and values.

Media may contact: 

Carly Wolff
Press Secretary
Office of the Minister
Natural Resources Canada


Media Relations
Natural Resources Canada