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Oilsands work to rise to 3.5% of total Canadian employment

Calgary, AB – Oilsands operations (as opposed to capital construction) generated $49.3 billion in revenues in 2011, which directly supported 30,700 jobs in Alberta, according to Michael Burt , director, industrial economic trends,...


Calgary, AB – Oilsands operations (as opposed to capital construction) generated $49.3 billion in revenues in 2011, which directly supported 30,700 jobs in Alberta, according to Michael Burt , director, industrial economic trends, Conference Board of Canada.

The Conference Board of Canada has just completed a study on the economic impact over the next 20 years of oilsands operations – i.e. the production, maintenance, repair, and operation requirements of the oilsands industry. Burt will discuss the study on Nov. 13, 2013, at the National Supply Chain Forum, taking place Nov. 12-14 at the BMO Centre in Calgary.

In addition to its own operations, the industry generates supply chain effects associated with businesses that supply oilsands operators, and induced effects that result from people spending the wages they earn in jobs supported by direct and supply chain effects.

The end result, says Burt, is that 226,400 jobs were supported by oilsands operations across Canada in 2011, equivalent to 1.3% of total Canadian employment. It accounts for an even larger share of national GDP, at 2.7%, when all three effects are included.

Looking forward, the economic footprint of the industry is expected to grow with the increase in oilsands production. In fact, with oilsands production expected to rise from 1.7 million barrels per day in 2011 to 5.1 million barrels per day by 2035, total employment associated with oilsands operations is expected to rise to 664,500, Burt reports.

In addition, there will be employment supported by oilsands investment (construction) over this period. When the two are added together, oilsands related employment across Canada is expected to reach 731,400 by 2035.

As a result, total oilsands related employment (including operational and investment effects) is expected to rise from 2.4% to 3.5%of total Canadian employment, as growth in oilsands activity will outpace the economy as a whole.

Given the outlook for continued strong growth, Burt says it is a worthwhile exercise to identify areas where the supply chain linkages within Canada can be strengthened. “Oil sands operations and investment result in billions of dollars worth of imports, with most of them consisting of manufactured goods. These international imports represent considerable opportunities for further development of interprovincial supply chains related to the oilsands. Potential opportunities are apparent in industries like motor vehicle parts, equipment, primary metals, and chemicals industries, as well as measuring and control instruments.”

Since changes in technology can be disruptive to established supply chains, they too can potentially provide opportunities to further develop domestic supply chains, Burt says. Key technological developments include changes in the extraction process, ways to improve the environmental footprint of the industry, and techniques to reduce the development costs of oilsands projects.

These objectives can often overlap, Burt says. “For example, efforts to reduce the steam-to-oil ratio in steam-assisted gravity drainage projects can simultaneously reduce operating costs, decrease the use of water and natural gas, and shrink the amount of equipment needed at the well head.”

For information on the National Supply Chain Forum, visit http://www.supplychainforum.ca/