On behalf of Unifor, I want to thank the standing committee for allowing me to speak to you today.
Unifor is Canada's largest private sector labour union. We have over 310,000 members in 36 or so industries. We have 13,000 in oil and gas, all the way upstream in the extractive process, midstream in refining and manufacturing, and downstream in natural gas distribution.
We're in the process right now of developing a comprehensive national energy policy, but it is not yet finalized so I can't give you specific policy recommendations. But I want to bring some pertinent facts to your attention, and also some principles and the policy orientation that we're using to think about energy development in Canada.
Hydrocarbons—that's crude oil, natural gas, and coal—together make up 87% of global energy consumption. It's almost all of it. It's all fossil fuels. Renewable energy is only 2% right now. The single largest and most important fuel source is oil, and that's 33% of the global total. When Stephen Harper said that Canada was an energy superpower, he meant it in the context of world energy demand. We have the third-largest global reserves of oil, we're the fourth-largest producer of crude oil, we're the fifth-largest producer of natural gas, and the fourth-largest exporter of natural gas, so he wasn't lying when he said that.
If you look at Canada's actual production mix, nearly half of it is crude oil, 45%, and natural gas makes up a further third, at 34%. That's what we produce domestically. Again, overwhelmingly, it's hydrocarbon-based.
Our energy consumption is a little different. Again, the single largest fuel source is oil at 31%, and then natural gas at 28%. Those two, those industries we're describing here, constitute 60% of our consumption. Only 1.5% is renewable energy.
Now, Canada is actually uniquely blessed in our energy mix in that we have such a high degree of hydroelectric potential. When you look at hydroelectric, nuclear, and renewable energy, those three areas together are 35% of our consumption. Those are non-emitting fuel sources, and that proportion, 35%, is much higher than the global average. Globally, only 13% of consumption is non-emitting. In the EU, which is the champion for renewable energy and non-emitting, they're only at 24%. So even though we consume more than the EU, our consumption mix is much more tilted towards non-emitting sources.
I just want to bring the population of each jurisdiction in Canada, the proportional primary energy production, and the proportional consumption to your attention because 65%, two-thirds, of our energy is produced in Alberta. A further 22% is produced in Saskatchewan and British Columbia.
What do these facts mean? They mean three things at least. The world currently has an enormous appetite for hydrocarbons. Second, Canada has an abundance of these resources. Third, any talk of decarbonization is going to have a differential effect on people who live in western Canada, because decarbonization, effectively, means their economy, as most of it is produced up there. These are just the facts we're dealing with right here. I'm just trying to lay out some factual context.
Those three things are significant. When we look at the energy sector's contribution to Canadian prosperity, it's enormous. Ten per cent of our GDP is energy-related, so that puts it on par with manufacturing. When you restrict the focus to oil and gas, it's 7%. That may sound small small, but that's the whole finance and insurance industry, roughly 7%. That's the whole health care and social assistance sector—health, 7%. That's roughly the size of education.
Oil and gas is a major contributor to Canadian prosperity. It's outsized in terms of business investment. It constitutes roughly one-quarter of all business investment in Canada, and it is also outsized in terms of well-paying jobs. From a labour perspective, the average industrial wage in Canada is $23 an hour, so annualized you're looking at $46,000 a year. That's the Canadian average. In natural gas distribution, it's more like $36 an hour, so you're looking at more than a 50% premium on those jobs. In oil and gas extraction, in the extractive activities, it's fully double. You're looking at more like $45 an hour.
I say this because the energy industry is an important source of good-paying jobs.
Canada is a major exporter of oil and gas, of energy, but we're also dependent on foreign sources for our imports. We export 3.6 million barrels of oil per day, almost all of it going to the United States. Most of it goes unrefined. It's either bitumen or unrefined petroleum products. Only 15% of our exports are actually refined petroleum products.
We also import 1.2 million barrels of oil per day and that reflects the fact that our energy grid is positioned on a north-south axis. Western Canada ships most of its energy resources south to the United States, and central and eastern Canada import a lot of their energy. The United States is the single largest supplier, but also Saudi Arabia, Nigeria, Norway, and so on.
Canada's energy resources are of world historical significance. They're a source of geostrategic influence. This is part of the starting point of any conversation about decarbonization. Our civilization is built on this energy source, and there's no getting around that. Nearly 90% of our energy is fossil-fuel based. Unifor does recognize the severity of the challenge we face in terms of carbon emissions, pollution, and other forms of ecological devastation.
At the lowest level of resolution, Unifor believes that we can responsibility develop these energy resources, while respecting aboriginal treaty rights, and that would include, of course, consultation and full socio-economic participation, and we can meet our emissions targets as set out in Paris at the COP21.
The current development model for energy will not get us there. During the upswing of the commodities super cycle, during the energy boom, we dug this stuff out of the ground as fast we could, we shipped it off to whomever would buy it, mostly unprocessed, mostly unrefined, often purchasing it back in finished form.
To Unifor's way of thinking, every time we build a pipeline or expand pipeline capacity of unrefined, unprocessed energy resources, we are exporting good jobs. I'm going to circle back to that in just a moment. This gold rush mentality that we've had, you see the negative consequences of this in Alberta and you see it in Newfoundland. When prices are rising, everyone thinks this model looks good, when prices crash, as they inevitably do, everyone gets their second thoughts going.
I'm going to speed up a little bit here.
The key point I want to make is this. If the world is going to decarbonize, and if Canada is going to decarbonize along with it, we need to extract as much economic activity from these resources as possible. We should be trying to spin out as much as possible in the way of job creation and GDP growth if we're going to shrink our resource economic base.
If you look at Canada's refining capacity, just a few more facts, we have 10% of global reserves, 5% of global production, and 2% of refining capacity. We have been shutting down refineries. Between the early 1980s, at the end of the last boom, and the late 1990s, we shut down, on average, one refinery per year.
Even during the energy boom, we shut down four refineries. Our production has tripled since 1978 and our refining capacity today is lower than it was in 1978. We are shutting down all the good-paying jobs associated with refining these resources and just shipping them out as fast as possible. This represents a lost opportunity.
Unifor believes we should develop a national strategy to develop our resources responsibly. We should be drawing on the best practices of other energy jurisdictions in terms of conservation and efficiency, in terms of public ownership and regulatory oversight, consultation, security of supply, and maximal economic community benefit. I'll leave it at that.
Thank you for your attention.