Thank you, Chair. It's Jay Khosla here. Just building on that last comment, we do sincerely appreciate the opportunity to be here, and we completely understand the importance of this study. We also look forward to receiving the final report, so we can improve our practices within the Energy Sector of Natural Resources Canada.
Having said that, we've distributed a deck, so I'll be following the deck. You may want to follow along with the presentation as well.
I too am happy to be here today to talk about the economic benefits of the energy industry for Canada and the work accomplished by the energy sector at NRCan.
We are grateful to the committee for studying this issue, which we think is very important for Canada's long-term prosperity.
Since the committee is undertaking a study, my team is with me. We are here to answer any questions you may have.
As I said, we sincerely appreciate the opportunity to appear here and look forward to the results of the study.
To start off, the natural resources sector contributes significantly to Canada's economy and future. The sector accounts for 18% of Canada's GDP and about 1.8 million jobs in Canada. Resource development projects are also sources of capital and attract tremendous amounts of investment to the Canadian economy.
Finally, it's really important to note that our forecasts indicate there's currently approximately $650 billion in major resource projects planned or under way over the coming decade, and of that total, energy accounts for nearly 75%. This clearly has major implications for our country.
The next slide is a bit of a “shovels in the ground” kind of concept, but as the slide depicts, Canada's vast energy resources benefit every region of the country. In some ways this represents how active energy development is across our country. Moreover, it shows the diversity of Canada's energy resources, including hydro and other renewables. Also, while oil and natural gas development is concentrated in western Canada, you can see that there is significant oil and gas production in the Atlantic offshore and elsewhere.
The smaller inset map shows that unconventional gas resources can be found across the country.
In a nutshell, energy development no matter the form, shape, or size touches all parts of the country from coast to coast to coast.
In terms of further setting the context in a global sense, Canada's energy resources are amongst the world's largest.
As we can see, Canada is the fifth largest crude oil and natural gas producer in the world, as well as a major hydroelectricity and uranium producer.
Canada is also a global energy efficiency leader. For instance, the International Energy Agency ranked Canada second for energy efficiency improvements between 1990 and 2010.
Canada truly is a global energy leader.
Very quickly, I want to point out that this next slide depicts the vastness of Canada's oil reserves. What's more, with innovations in technology and improved production methods, estimates are now indicating that up to 315 billion barrels may ultimately be recoverable in Canada. Canada's energy endowment is truly the envy of the world.
I'm going to spend a little bit of time on this next slide. There are some considerable statistics here. It is clear that this endowment has direct impacts on the economy.
As the slide says, the energy sector provides $155 billion in GDP. That's over 9% of the Canadian total. It provides 300,000 jobs, equivalent to almost 2% of total employment; almost one quarter of all capital investments or $96 billion; $153 billion in foreign direct investments, which is again roughly a quarter of the total; and about 28% of total exports or $119 billion.
The final point is that all governments, federal, provincial and territorial, benefit greatly from energy development in terms of overall revenues.
Beyond this, the energy sector is an important contributor to many of Canada's other sectors, which helps ensure benefits for Canadians across the country. Also, governments and industry in Canada are investing significantly in energy R and D, which is strengthening the economic and environmental performance of the energy sector.
I'd be remiss were I not to mention the demand side of the equation of course, and that Canadians achieve significant savings through more efficient use of our energy resources. Based on efficiency gains alone since 1990, Canadians have saved $32 billion in energy costs in 2010.
At the same time we know the energy landscape is shifting. The past decade has seen extraordinary growth in energy demand, largely driven by the fast-growing Asia-Pacific markets. Combine this trend with the fact that the U.S. is nearing energy self-sufficiency thanks to its unconventional oil and gas revolution—and don't forget that the U.S. is essentially Canada's only export market for energy—and taken together this means that Canada has both an opportunity and an imperative to diversify energy markets in order to continue reaping the key economic benefits that we enjoy today.
Chair, I won't spend a whole lot of time on this slide. I think this trend has been recognized at this committee in previous studies, but suffice it to say that Canada is well positioned to help meet this growing global demand for energy.
According to the National Energy Board, Canada's production of unconventional resources, including oil sands, shale gas and gas reservoirs, is projected to grow significantly until 2035 and beyond.
In other words, our stocks are not decreasing. The outlook for the Canadian energy sector is focused on continued growth.
In fact, Canada's sector is reacting to these dynamic changes. The new proposed pipeline projects could increase our export capacity to 3 million barrels a day.
Industry is also pursuing a variety of proposals to export Canadian natural gas resources to international markets via liquefied natural gas. As you know, 10 LNG export terminals are proposed on the B.C. coast alone, and one on the east coast. Canada's LNG value proposition is based on an abundant resource, clear regulatory structures, close proximity to markets, and an openness to foreign investment. The global community is showing active interest in our resources.
Summing it all up, what does it all mean? Canada has a huge economic opportunity, but needs to act quickly. Many argue that this is a time-limited window. As this slide indicates, economic experts agree on the tremendous importance and potential of Canada's energy sector.
A prominent stat comes from the IMF study, which indicates the potential to increase our GDP by 2% by 2020 if we're truly able to diversify our markets. Furthermore, the work by these experts highlights—you can see it on the slide—the importance of energy development for all regions of the country.
With that in mind, the Government of Canada is and has taken action to ensure success. In fact, much has already been done to support a vibrant and responsible energy sector. The government has modernized its regulatory system, is putting in place world-class safety and security regimes, and has invested in innovation and efficiency. The government is engaging domestically and internationally, and building partnerships with stakeholders to maximize Canadian benefits from resource development. In sum, the objective is to put all the building blocks in place to support the effective and efficient development of projects.
To sum up, the exploration and the diversity of Canada's energy resources provide significant economic benefits across the country. The government is actively implementing a program that supports the responsible development, transportation and use of our energy resources. In fact, energy fuels Canada's economic prosperity.
Thank you. We are now ready to take your questions.
