There are many critics of oil sands who want Canada to shut down its oil sands production.
Leaving aside the uncertainties about whether practicably, petroleum can be replaced even in the medium term, what would be the effect of ending oil sands on Canada’s economy at a time of chronic unemployment, Government bailouts and possible double dip recession? It’s difficult to determine impacts in any absolute sense, but here we look at the current numbers and third-party projections to see what potential impacts could be.
- Loss of GDP: A recent Canadian Energy Research Institute study estimated that oil sands will add $1.7 trillion to Canada’s GDP over the next 25 years.
- Loss of tax revenues: CERI estimates oil sands will boost tax revenues by $19.6 billion a year. This is equivalent to 8% of the federal government’s current annual expenditure, or to put it another way, a lot of new schools, hospitals and roads.
- Loss of jobs: CERI forecasts that the oil sands will create more than 450,000 jobs across Canada over the next 25 years.
- Loss of orders to Canada’s non-oil sands businesses: Suncor and Petro-Canada alone spend $10.4 billion annually with over 17,000 vendors. Most is spent in Alberta, but Ontario’s businesses get $1.3 billion and Quebec’s get $400 million.
- Increasing exposure to unfriendly regimes: without oil sands, North America will be importing much more oil from Africa, the Middle East, South America and Russia, many of whose countries do not share the environmental, political, and human rights principles of Canada, and many of whom have little environmental regulation or transparency.
Pierre Duhaime, President and CEO of SNC-Lavalin in Quebec (full disclosure: SNC-Lavalin is a Suncor contractor) put this argument cogently in a recent Op-Ed in the Globe & Mail. His concluding point: unless we dramatically change our way of life, the world will continue to need a reliable source of oil.
Most countries can only dream of the oil reserves we have in Canada. It’s a credit to us as a responsible people that we reflect so deeply on their development. We must continue to do so and to look for ways to reduce impacts while advancing alternative and renewable energies. In the meantime, oil sands are a vital economic engine, employing our people and paying for social programs that sustain our high quality of life. Taking full advantage of them while managing social and environmental impacts will be our challenge going forward.
OSQAR takes a break
We’ll be ceasing publication during the first two weeks of August as we expect many of our readers will be away.
