The proof is in the numbers: oil & gas is critical to B.C.’s economy
For the last 70 years, British Columbia has produced oil and natural gas for Canada – and as of 2018, it produced 32% of Canada’s natural gas and 2% of our conventional oil. All that production adds up to significant royalties collected by the provincial government, directly supporting economic prosperity in B.C.
But just how important is oil and natural gas to the B.C. economy? According to data from Statistics Canada, very.
In 2017, B.C.’s oil and natural gas industry generated about $18 billion in goods and services, and contributed $9.5 billion to the province’s GDP. How does that translate to prosperity for the average resident of British Columbia? In 2017, the B.C. oil and gas industry was responsible for nearly 26,500 direct jobs and over 36,100 indirect jobs (62,602 total). Look at it another way – over $3.1 billion in wages were paid to B.C workers that year.
Considering the oil and gas industry purchased more than $5.6 billion in goods and services within B.C. – from the finance and insurance sector, professional services like accountants and IT workers, and the manufacturing industry – it’s fair to say oil and gas is a major contributor to local economies across the province.
Seeing beyond B.C.’s O&G spending
In 2017, B.C. did a total of $39.4 billion in trade with other provinces. Alberta was B.C.’s largest trade partner, accounting for $15.4 billion (about 38%). With only 11% of Canada’s population, Alberta (consumers, businesses, and governments) buys a larger-than-average amount of goods and services from B.C. One reason that may be the case is the number of high-paying oil and gas sector jobs.
With the billions spent in B.C. by Alberta being outdone only by the U.S. (with about $22 billion in goods and services purchased), the relationship between the two provinces is clearly mutually beneficial.
Greater access. Greater demand. Greater prosperity.
B.C. has a natural advantage for global market access thanks to its coastline being closer to many Asian-Pacific markets than U.S. Gulf Coast facilities. The U.S. Gulf Coast is more than 9,000 nautical miles from the Japanese ports of Himeji and Sodegaura, compared to less than 4,200 nautical miles between those two Japanese ports and the coast of B.C.
With rising demand for natural gas in Asia, especially in Japan (the largest importer of LNG), these are exciting (and lucrative) times for the B.C. oil and gas industry. Driven by growth in Asia, world LNG demand is expected to nearly double in the next two decades, crossing 700 million tonnes in 2040, according to Shell’s most recent outlook.
Whether you’re looking at employment, salaries, GDP, or the purchase of goods and services, it’s clear: the impact of oil and natural gas on B.C.’s economic prosperity is significant.
