Ottawa highlights weight of natural resources in economy

Canada’s natural resource sector is responsible for 20 per cent the country’s economic activity, much higher than previously estimated, the federal government announced Tuesday.

In 2010, the government said natural resources accounted for just 11.5 per cent of GDP.

Natural Resources Minister Joe Oliver told reporters in Toronto Tuesday that the new calculation uses just-released numbers that take into account both quantity and prices. The government calculated the nominal GDP of the industry, which it says is a “more accurate indicator” of the sector’s economic contributions than real GDP.

Mr. Oliver said the numbers also reveal that natural resources industries – namely energy, forestry, metals and minerals – account for one in 10 Canadian jobs.

He said that recent numbers – in this case, from 2011 – were not available until now.

Three-quarters of activity comes directly from the sector, while about one quarter comes from indirect activity, such as goods and services bought from other sectors for natural resources projects.

Mr. Oliver said the figures show that natural resources can be “the catalyst for a new era of jobs, growth and prosperity for Canadians.” The government estimates that up to $650-billion could be invested in major projects in the sector over the next 10 years. This is up from last year’s estimate of $500-billion.

The Minister called the growing appetite for Canadian exports in the Asia-Pacific region an “unprecedented opportunity” for the resources sector, but avoided discussion of state-owned companies taking over Canadian companies and projects. Last Wednesday, China’s CNOOC Ltd. formally applied for government approval of its $15.1-billion bid to take over Calgary’s Nexen Inc. Kuwait Petroleum Corp. revealed last week that it is pushing to develop oil sands properties in a joint venture with Athabasca Oil Corp.

Before granting approval, the federal government needs to assess such deals to ensure they’re of “net benefit” to Canada. Mr. Oliver said Tuesday that reciprocity would be taken into account in assessing the net benefit of the CNOOC bid, but did not provide further details or provide general comment on the importance of reciprocity in deals with state-owned foreign companies.

Original Article
Source: the globe and mail
Author: Josh O'Kane