Good morning, ladies and gentlemen.
Thank you for this invitation to appear before the Standing Committee on Natural Resources to address the important issue of the cross-Canada benefits of the development of the oil and gas industry on the Canadian economy.
We have circulated a presentation, which is available in both French and English. On page 2, we have summarized the exports of non-natural resources versus resource-related exports for Canada as well as the current account balance for Canada—just as a reference for the context of how important the development of our export capacity, both in resources and in non-resource-related areas, is.
On page 3, you'll notice that we've presented a framework that describes the different roles of players in this industry, from asset managers to technology integrators and solution providers. Today my presentation will be focused on solution providers, but there will be references to the obviously very important role that technology integrators and asset managers play in this industry.
I'd also suggest that there are some other important roles the committee may wish to consider over time in its deliberations. Those are found on page 4. You'll notice that in addition to these three main roles, there are also different funders that have important roles, including public sector funders like those you're very familiar with—Sustainable Development Technology Canada, and the Climate Change and Emissions Management Corporation of Alberta—but there are also export opportunities for infrastructure that are financed by private sector institutions, such as the World Bank. You'll notice that we've included the World Bank's logo.
I will not describe what's on page 5, but it is for your reference. You may recall past presentations on the broader clean technology industry. On page 5 we've included all of the subsectors we consider to be part of that industry. Three of those sectors are the focus of today's remarks: the extractive processes and products sector, the water and waste water sector, and the power generation sector. Within extractive processes, carbon sequestration, energy efficiency, soil remediation, tailings, and water treatment for extractive industries are all relevant.
There are other companies working in areas to do with desalination and water infrastructure that are now moving into the field of pipelines, for example. To the extent that, for example, in Alberta, large emitters are engaging in the development of renewable energy projects, power generation companies and those that provide technologies for that are also relevant to your work.
On page 7, I would like to draw your attention to the fact that within the clean technology industry, which is made up of about 700 companies, all of which have proprietary technology and three-quarters of which are exporting, there are some impressive economic credentials. These are impacted by the development of the oil and gas industry in Canada.
Current direct employment by these 700 firms is 41,100 employees. The rate of growth of employment in that industry is significantly higher than that of the economy, generally, at 6%. I think it's important to note that almost one-fifth of those employees are age 30 or younger. You will note, though, that the top skills gaps in this field are perhaps not what you're used to seeing. They include sales, capital raising, and international business development. These are companies that, while serving domestic interests and markets in the oil and gas industry, are very much focused on exporting in international markets.
I'll touch briefly on the credentials that are listed on pages 8 and 9. The oil and gas industry will benefit from the $1 billion annually that these relatively small companies invest in R and D. Three-quarters of the $1 billion is invested by companies that have less than $50 million a year in revenue. I think that's important to bear in mind. These relatively small companies are generating 52% of their revenues from exports. Twenty-two per cent of overall industry revenues are from non-U.S. markets, which is a very surprising finding.
I think one of the most important things for you to bear in mind for your committee's work is on page 10. These relatively small companies are not looking to be integrated in global value chains or to deal indirectly with very large companies via partners.
But if you look at the pie chart on page 10 to your left in the white box, you'll see that these companies that have modest revenues, in the $10 million to $25 million range, are very serious investors in R and D; 71% of them expect to do business directly with those asset managers that we mentioned earlier. That changes when the companies get a bit larger, when they reach from $25 million to $100 million in annual revenue. At that point they will more naturally do business with the systems integrators that were listed on the first page of the presentation.
These are important insights for your work because it is quite difficult for some of our Canadian companies to do business with the large oil and gas companies when they come from an R and D innovation-based perspective.
I'll touch very briefly on the export potential of these companies serving our domestic market. The smaller companies will have greater exports to the U.S. but still significant exports to Europe. But as the companies grow larger, you can expect them to have a very important focus on non-U.S. export markets, which is obviously of great significance because of the growth potential in those areas.
I'll conclude by suggesting that you take a moment to refer to pages 12, 13, and 14 of the presentation. These are the logos of some sample companies that are here to serve the Canadian oil and gas industry in various capacities. On page 12 you have companies that are publicly listed. On page 13 you have companies that are not publicly listed but are relatively mature and have large-scale demonstrations and credentials, some of them around the world.
As an example, I'll draw your attention to Eco-Tec as a company that has significant deployments in the Middle East, but has yet to have significant deployments in Alberta. Then on the final page, page 14, there are some newer companies. A number of these have been part of the Climate Change and Emissions Management Corporation investment portfolio. For example, there's Inventys, CO2 Solutions, and Carbon Engineering. These are emerging companies that will benefit particularly from the investments being made in reducing the carbon intensity of the Canadian oil and gas industry.
With that, I thank you very much for your attention and I'm very pleased to take any of your questions.