The impact of oil and gas on Ontario’s economy
The first commercial oil production in North America started in Ontario in 1858. And 165 years later, the oil and gas sector continues to play a significant role in the provincial economy. There are some 3,000 oil and gas wells active in the province.
Providing a reliable supply of energy is just one of the ways in which the oil and gas sector benefits the Ontario economy. Thousands of kilometres of pipelines in Ontario move oil and gas to the U.S., creating many jobs in that province. The refining industry also creates employment and contributes to the provincial economy. And many value chain sectors in Ontario supply goods and services to oil and gas companies.
A Major Contributor Across Sectors
Looking at the most recent (2017) comprehensive data available from Statistics Canada, the oil and natural gas industry was responsible for adding $7.7 billion in nominal GDP to Ontario’s economy, and over 71,000 direct and indirect jobs.
Think of oil and natural gas employment in Ontario as the engineers and manufacturers hired to design and build oil and gas operating equipment and facilities, a building in Edmonton or in downtown Toronto, or an investment firm tasked with raising capital for a natural gas company operating in northern Alberta or B.C. Or think of an oil sands company in Fort McMurray whose local spending on plant construction materials or office furniture results in jobs created in Ontario for the companies supplying these goods and services.
Billions Spent in Ontario
In 2017, the oil and gas industry purchased $7.3 billion worth of goods and services in Ontario, including $4.3 billion from Ontario’s manufacturing sector alone. Other “big ticket” purchases include $700 million from the Ontario finance and insurance sector, $600 million from the professional, scientific and technical services sector, and $300 million from transportation and warehousing. Overall, $2.1 billion in salaries and wages for Ontarians were generated as the result of oil and gas industry spending in Ontario.
Economies may be locally based, but local businesses and jobs are impacted by investment and trade flows from other places. From Bay Street to Yonge Street to Main Street, people living across Ontario benefit from a strong Canadian oil and gas sector.