Over several years, I’ve mentioned the fact the world needs more Canadian oil and gas. Through bull and bear markets, it continues to be a crucial point. Oil and gas touches virtually every aspect of modern life, and in the face of rising demand it’s clear those products ought to come from Canada – for everyone’s benefit.
There are more than a few reasons I continue to make the point.
Regular readers know when you line up the largest 10 oil exporters in the world alongside environmental, social and governance (ESG) investor criteria, Canada wins on every key metric.
Those metrics show Canada’s energy leadership in our stringent environmental regulations, high standards for transparency, equality and worker safety and our huge investments in R&D where we develop technologies to reduce greenhouse gas emissions per barrel.
We’re home to about 40 per cent of the world’s oil production that’s subject to carbon pricing. And the Canadian oil and gas sector has been among the largest investors in renewable energy projects including wind and solar installations across the country. Those are strong stories.
But there’s an equally strong story to be told on the economic side of the equation.
Canadian oil and natural gas contributes $105 billion to Canada’s gross domestic product (GDP) and in 2020 supported almost 400,000 Indigenous and non-Indigenous jobs across the country.
Between 2000 and 2019, oil and gas contributed more than half a trillion dollars to government revenues. More recently, unanticipated higher revenue from energy royalties and taxes are flowing into government treasuries at a rapid pace.
One recent RBC Capital Markets analyst report suggests the recent rising energy prices have fuelled taxes and royalties paid by public Canadian energy companies to around $48 billion this year.
The RBC Capital Markets report further projects some $64 billion in royalties and taxes can be expected by governments in 2023, based on assumptions that North American benchmark West Texas Intermediate (WTI) crude could average US$114 per barrel next year.
That’s roughly a doubling of government revenues year-over-year.
It’s vital we focus as a country on maintaining and enhancing our competitiveness, while at the same time we continue to reduce our energy emissions. That’s how we ensure a strong energy future and a healthy tax base to support various Canadian public programming including roads and bridges, health and education.
Both in good times and bad, Canadian energy suppliers have a vital role to play, here and elsewhere. Perhaps we should play a stronger role in providing crucial energy to countries impacted by geopolitics that block access to the energy they need to keep their people fed, housed, clothed and secure.
After all, we have the human and natural resources to get the job done.
Cody Battershill is a Calgary realtor and founder / spokesperson for CanadaAction.ca, a volunteer-initiated group that supports the Canadian natural resources sector and the environmental, social and economic benefits that come with it.