Canada’s Oil Economy Through the IMF Lens

The International Monetary Fund has weighed in on the economic benefits of oil sands development in Canada, in a background report written in January 2014 but only released in April. Using Input-Output analysis based on 2009 data, the IMF report notes that overall the unconventional oil and gas industry make a small, positive contribution to Canada’s economy: for every $1 invested in the oilsands, Canada’s GDP rises 90 cents – of which 82 cents goes to Alberta. The report states “employment in the energy sector increased by less than 13,000 over 2007-12, against a total 752,000 jobs created over the same period in Canada”. To measure broader spilloever effects across Canada and across industries, the report uses a General Equilibrium Model which takes into account the “infrastructure constraints” – i.e. pipeline and transportation capacity. The report concludes “that the potential output gain for Canada’s energy products would reach only about 2 percent of GDP” over a ten year horizon, and that is conditional on construction of infrastructure (pipelines) for export to non-U.S. markets and for interprovincial energy integration, and if inter-industry linkages are encouraged across Canada to more widely distribute economic benefit.


IMF Country Report 14/28: Canada: The Unconventional Energy Boom in North America; Macroeconomic Implications and Challenges for Canada is at:

Summary and commentary are at the DeSmog Blog at:, or in an article by Andrew Jackson at the Broadbent Institute at:

Industry Estimates of the Economic Impact of the Oil Sands

From the industry point of view, a study by consultants IHS CERA was published in January reporting focus group discussions by the oil sands multinationals in Calgary in summer 2013. The report projects that the oil sands’ contribution to Canadian GDP could reach $171 billion in 2025, with total contribution to employment in Canada reaching 753,000 jobs by 2025.

See Oil Sands Economic Benefits: Today and in the Future (Jan. 2014) at:

Oil Sands Economics: The Latest Facts and Some New Recommendations

A new report released by the Pembina Institute and Equiterre focuses on economic debate surrounding the oil sands, updating In the Shadow of the Boom, published by Pembina in May 2012.The new report,Booms, Busts, and Bitumen examines several economic risks associated with natural resource booms, including the decline of the manufacturing sector, known as Dutch disease, and GDP instability caused by Alberta’s overreliance on the oil sands. The report questions the benefits accrued outside of Alberta, stating that only 14% of the employment opportunities created by oil sands development will be outside Alberta, and citing a CERI analysis that indicates the U.S. may stand to gain more than the rest of Canada. It also points to increasing worldwide pressure to reduce greenhouse gas emissions and the uncertainty of future oil sands markets. Finally, the report calls for better government management to ensure long-term gain from the one-time exploitation of non-renewable resources, for example through capital investment that focuses on reducing fossil fuel dependency in Canada, elimination of preferential tax treatment for the fossil fuel industry, and a mandate for the House of Commons Standing Committee on Industry, Science and Technology to study the current restructuring of the Canadian economy, and the associated regional disparities, with an aim to identify a course of action to diversify economic growth and aid competitiveness across the whole country.


Booms, Busts, And Bitumen: The Economic Implications of Canadian Oilsands Development is available in French and English versions from:  

TD Bank Report on Canada’s Green Economy: Reconcile the Economy and Environment

On October 2nd, one of Canada’s Big Five banks, the TD Bank, released a report on “green economics” in Canada. TD found that environmental considerations have already become entrenched in corporate decision-making in Canada, and that reducing environmental impact often reduces costs, drives innovation, and stimulates growth. TD’s preliminary analysis indicates a recent “decoupling of economic growth from environmental degradation”, wherein the percentage of GHG emissions per 1% GDP increase has fallen, while improved air and water quality, recycling rates and protected lands have accompanied strong overall growth. The report suggests that in order to better understand and encourage these trends, Canada needs a holistic focus on the “greening of the economy” in all sectors, rather than dichotomizing “green” and “brown” economics. To this end, TD calls for the development of environmental, economic, and government policy, and corporate responsibility indicators to help measure gains across industries and at all levels.