A Toronto-based environmental group is challenging the aggressive messaging from the federal government and industry on the economic benefits of the oil sands with the release of a poll that suggests Canadians are ill-informed about the impact of the sector.
In a survey released Friday, Environmental Defence said 57 per cent of respondents overestimated the contribution of the oil sands to the national economy. According to Statistics Canada, oil sands production accounts for 2 per cent of the country’s gross domestic product, but more than 40 per cent of respondents pegged the figure at 12 per cent of GDP or higher.
The environmental group focused on the value of production from existing oil sands projects, but it did not account for current growth and new jobs that result from the construction of new projects or the pipelines and other infrastructure needed to get higher volumes of crude to market.
Prime Minister Stephen Harper and his ministers have routinely characterized the oil sands specifically – the the resource sector generally – as the engine of economic growth for Canada, and warn against any action that would slow down development.
“We are routinely told our economy will sputter, governments won’t be able to balance budgets and social services will have to be sacrificed if we don’t triple the size of the tar sands as fast as possible,” said Tim Gray, executive director of Environmental Defence.
“But this simply isn’t true. The tar sands are not the primary driver of our economy; their contribution is relatively small and certainly not sufficient to justify the risks of planned massive expansion.”
Mr. Gray said the Harper government and the oil industry have persuaded Canadians into believing that the oil sands represents the economic engine of the country in order to justify new pipeline construction across British Columbia and to Eastern Canada, and new extraction projects in Alberta. And they have painted opponents of those projects as radicals who are determined to undermine the Canadian economy.
Some 75 per cent of respondents to the survey – an online poll of 1,011 adults conducted by Environics – agreed with the statement that, given concerns about climate change, Canada should shift its energy strategy away from reliance on fossil fuels and toward cleaner fuel.
“Governments and industry have succeeded in articulating an importance for the tar sands that greatly exceeds its place in the economy. But despite that, the public still would like to see a transition away from dependence on fossil fuels,” Mr. Gray said.
Officials at the Canadian Association of Petroleum Producers were not available for comment, as the office was closed for the opening of the Calgary Stampede.
University of Alberta economist Andrew Leach said he also has found that Canadians tend to overestimate the relative size of the oil sands as a percentage of the economy – especially staunch proponents and opponents of the industry. But he added that the impact of production on GDP is only one gauge of the sector’s relative importance. The construction side of the industry is large and important.
“The big issue for Canada now is that a lot of what we classify as oil sands activity is actually construction of oil sands facilities – that’s where a lot of the employment growth is, and a lot of the investment is going,” he said. It is that new activity that is more vulnerable to a slump in prices or high-cost environmental regulations.
Royal Bank of Canada economist Paul Ferley said that, even at 2 per cent of the economy, oil sands extraction is twice as large as the auto sector, and that it is growing quickly. He noted that figure does not include indirect impacts, such as spending by workers or capital investment.