The proof is in the numbers: oil & gas is critical to B.C.’s economy

The sector produces billions in revenue for the province each year – and tens of thousands of jobs
By Ven Venkatachalam

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.