In a post-pandemic world, Canadians will be looking for ways to reboot the economy and get people back to work. The oil and natural gas industry is poised to help lead that recovery.
Saskatchewan is an important part of Canada’s oil and natural gas industry, generating significant benefits for the province’s people and economy. The industry represents about 15 per cent of the province’s GDP and 25 per cent of provincial exports, which were valued at $7.4 billion in 2019. Royalties paid by the industry between 2012 and 2018 totalled $10.0 billion. More than 30,000 people in Saskatchewan work in the industry.
There is great potential for long-term growth of the industry, but Saskatchewan staying competitive is crucial to enabling that growth.
Competing for investment
Oil and natural gas producers in Saskatchewan currently compete with every other petroleum-producing jurisdiction for limited investment dollars, so attracting capital will be critical to growing the industry and stimulating a strong economic recovery.
Saskatchewan’s oil and natural gas industry has the ability to lead our recovery by creating high-paying, productive jobs. ,Productivity in this sector is very high, contributing 27 times more to GDP per hour of employment than that contributed by the business sector overall. In addition, increased oil and natural gas activity can support growth in local indirect jobs such as hotels, restaurants, retail and other services, largely in rural Saskatchewan.
Supporting Saskatchewan’s Plan for Growth
The Government of Saskatchewan’s 2020-2030 growth plan envisions 100,000 new jobs, private capital investment at $16 billion annually, and a 25-per-cent increase in oil production to about 600,000 barrels per day, all by 2030.
Industry’s vision – to make Saskatchewan among the most attractive jurisdictions for oil and natural gas investment – is consistent with the province’s objectives, but achieving this vision requires action in four key areas:
- Municipal tax policy – create an equitable, transparent and predictable municipal property tax system that positions the industry to compete for capital investment and growth.
- Fiscal and economic policy – maintain a fiscal framework, including a competitive royalty structure, that is globally competitive, market-driven, encourages innovation and positions Saskatchewan’s oil and natural gas as a global energy investment of choice.
- Electricity cost – power costs remain a substantial burden impacting industry competitiveness and investment decisions.
- Leading regulatory efficiency – an efficient, predictable regulatory system – that meets the highest safety, environmental and regulatory standards – And a continued focused on red-tape reduction will create a significant opportunity to attract increased investment.
- Recovery of Saskatchewan’s oil and natural gas sector will mean increasing the province’s resource income, job creation including indirect jobs from construction to hospitality, better investment attractiveness and overall growth in Saskatchewan’s oil and natural gas production. The industry is a willing partner in working with government to enable a bright future for Saskatchewan.