Thank you for having me, and good morning, committee members, fellow witnesses, and guests.
My name is Bryan McCrea. I'm the co-founder and CEO of 3twenty Modular. I'm pleased to have the opportunity to share my insights and experiences as they relate to the cross-Canada benefits of developing the oil and gas industry of the energy sector.
For some background, 3twenty Modular is a designer and manufacturer of modular structures. We build workforce housing, offices, complexes, lavatories, and custom enclosures for the mining, oil and gas, and construction industries. We are headquartered in Saskatoon, Saskatchewan.
The perspective I am sharing is that of a young entrepreneur who has had the opportunity to start a business, grow a business, create jobs, and support tens of millions of dollars of economic development largely because of the opportunities provided by the oil and gas industry.
I have summarized my insights of the benefits of developing the oil and gas industry in three key points.
Number one is enabling entrepreneurship. Oil and gas companies do not develop their projects and resources alone. They rely on thousands of vendors in their supply chain who have developed specialized expertise, products, and services to support a project's life cycle. As such, the oil and gas industry provides vast opportunities for enterprising individuals to be a part of the supply chain. It is undeniable that the oil and gas industry has enabled thousands of entrepreneurs to take an idea or an opportunity and turn it into a business—much like our story.
As the world's population continues to grow, so do the pressures on the oil and gas industry to provide. As such, the industry seeks innovation that helps improve productivity, reduce cost, and minimize the environmental impact of the activities. Entrepreneurs tend to be a major source of this innovation. Entrepreneurs are usually the ones developing a better widget, improving reclamation technology and processes, and improving safer methods of transporting oil to export markets.
My second point is growth and reduced risk. Initially 3twenty Modular's close proximity to uranium, gold, and potash developments in Saskatchewan made Saskatoon an attractive location to build our business. However, with unfavourable commodity prices resulting in changing economics for many of our customers, we have been forced to expand, diversify, and ultimately focus on the oil and gas industry. Calgary, Edmonton, and Fort McMurray and area are now considered our primary markets for growth. In fact, in a year when major capital expansions were concluding in Saskatchewan's mining industry, we were incredibly fortunate to be able to refocus our business quickly to supply the Alberta market. As a result, in 2013, 75% of our revenue came from the Alberta market. Oil sands production is expected to double by 2025, and as such, we do not see this market focus changing. The Alberta oil sands market has become a primary growth target for our organization.
The oil and gas industry's continued growth has provided us with certainty to plan our business's growth and invest capital into additional infrastructure, human resources, and R and D. Without the oil and gas industry, expansion and investment would seem risky and unattractive. Financial institutions and private equity capital have been more willing to fund start-ups in Saskatchewan given our proximity and accessibility to Alberta's oil and gas industry.
Additionally, Canadian manufacturers are constantly competing against the economics of offshore procurement strategies. In the oil and gas industry, proximity to projects, customer service, and timelines are as important as, if not more important than, price. As such, offshore manufacturers may be able to provide a more cost-effective nut, bolt, or small widget, but when it comes to large material, buildings and equipment, local manufacturers like ours have an obvious advantage. The oil and gas industry helps sustain and grow a healthy Canadian manufacturing industry.
That brings me to the third and perhaps most obvious benefit: economic development. The oil and gas industry without doubt has a profound impact on the economy. We see this through business start-ups, employment creation, training and development, supply chain spinoff, and community investment. An industry that represents 25% of the value of the Toronto Stock Exchange, employs well over half a million Canadians directly and indirectly, and has attracted $55 billion in investment in 2012 is undeniably one of Canada's major economic engines.
The oil and gas industry is particularly important to the economic development of rural and semi-urban areas. In Saskatchewan, for example, oil and gas development has had significant impact on towns and cities, including but not limited to Kerrobert, Kindersley, Swift Current, Estevan, and Weyburn, and could eventually extend further north into such communities as Île-à-la-Crosse should the Saskatchewan oil sands be developed.
This industry has helped keep many of Saskatchewan's rural areas healthy and vibrant. No longer do young families need to move to the city to prosper. Now, thanks to the oil and gas industry, they can be employed, start a business, and raise a family in a town where they were born and raised.
To conclude, it is imperative that Canada continue to support the development of its oil and gas resources in a responsible and aggressive way. Continued growth will stimulate training and development, employment, entrepreneurship, and economic development for decades to come.
Thank you for the opportunity to share my insights as an entrepreneur building a business in the oil and gas industry.