Mr. Chairman, we appreciate the opportunity to speak with the standing committee today and to provide the perspective of the Alberta Chamber of Resources.
The Alberta Chamber of Resources is 75 years old. We had a great birthday party last Friday night in Edmonton, with 700 of our closest friends at our annual banquet and awards evening. We have about 200 member companies from all sectors of resource development. We think that cross-sector membership gives us a unique, broad, strategic, and balanced perspective.
Our mission is orderly and responsible development. We think we've had an impact over the years on both corporate strategy and public policy. That impact has come through reports such as the few examples I have to show you today, including, the National Task Force on Oil Sands Strategies; the Oil Sands Technology Roadmap; “Learning From Experience: Aboriginal Programs in the Resource Industries”, which is a best practices guide for relationships between resource companies and aboriginal communities; and “Caring for the Land”, which is a summary of rehabilitation for surface mining operations and some success stories in terms of renewal and rehabilitation of surface mining.
The latest report of the task force on resource development and the economy will be issued in a few weeks. That task force was commissioned by the board of directors of the Alberta Chamber of Resources to look at the historical impact and the potential future impact of resource development on the economy and to formulate some recommendations that would invite governments and industry to work together to optimize that in the future.
The report was developed with very broad input from nine sector committees and with economic modelling by Dr. Robert Mansell and his team at the School of Public Policy at the University of Calgary. They used the Statistics Canada provincial input-output model to assess both the direct impact of economic activity within the resource sectors and the forward and backward linkages that give rise to the indirect effects in supply sectors and service sectors such as engineering and accounting. We think this more thorough understanding of the total effect, both indirect and direct, will be one of the major contributions of our report.
The report is in the process of being printed. We'll be pleased to send you a copy in early March as soon as it is available.
I'd like to highlight four of the broad conclusions from the task force report.
First, the resource sectors are key drivers that propel the whole economy. Nationally, one-quarter of all business profits and one-third of business investments arise in the resource sectors. Over half of the value of shares traded on the Toronto Stock Exchange are resource shares. The resource sectors are the largest net contributors to Canada's positive balance of trade. When we add up all these direct and indirect factors, we see that 20% of Canada's gross national product and over 60% of Alberta's gross domestic product arise from resource development activity.
Second, we have two wonderful competitive advantages in Canada: the resources in and on the ground, and the thriving knowledge economy, driven by resource development, that exists above the ground.
Some of that knowledge economy is resident within the resource development companies, some within the regulators and government departments and research laboratories that are connected with resources. To a large extent, that knowledge economy is in the supply and service sectors.
I'd like to point out that this knowledge is globally competitive, and there is a large export component to that knowledge economy.
Third, we should remind ourselves that in Canada we have a good track record in terms of responsible development. We have knowledgeable regulators, who set high standards and enforce them. We have resource development companies that take their safety, environmental, and community responsibilities seriously. They walk the talk.
Finally, as we look at the future of resource development, we see that we have ample resources. In the energy sector we have coal and bitumen. The production horizon of those resources is measured in centuries. Even for conventional oil and gas, as we've been hearing about, production horizons have been rising in the last few years. Beyond the energy resources, we have a big basket of other mineral resources. We have renewable forests. When we put all that together, we see that we have a large and diversified portfolio.
As we talked with our sector leads, we asked them to describe low scenarios and high scenarios for future development in their sectors. Dr. Mansell and his economic modelling team put all this together so that we could determine the size of the prize if we can come up with smart corporate strategies and wise government policies that steer us away from the risks of the low scenario and toward the rewards of the high scenario.
That prize, that difference between the low and the high curve, we've estimated in Alberta as $700 billion worth of incremental GDP over the next 10 years, as well as four million person-years of incremental employment over the next 10 years, so industry, governments, and society generally have high motivation to pursue orderly and responsible development.
In conclusion, I would encourage the committee, when the report arrives in the next few weeks, to please read it and please understand the economic importance of these sectors and the tremendous effect the direct and the indirect effects have on the overall Canadian economy. Please look at the recommendations to determine how the federal government could work with the provincial governments and industry to pursue a common vision of orderly and responsible development.
Thank you.