Economic & Fiscal Impacts

GDP by Sector

Canada’s abundant natural resources underpin a wide range of economic opportunities and play a central role in the national economy. Resource industries such as mining, quarrying, oil and gas extraction, agriculture, forestry, fishing, and hunting are all significant contributors to GDP. Among these, the oil and natural gas sector stands out as the largest, accounting for more than half of the total economic output generated by Canada’s resource industries, with approximately 53% of resource-sector GDP.

Oil & Gas GDP by Province

Oil and gas activity extends coast to coast, with Alberta accounting for the majority of GDP contribution, followed by British Columbia, Saskatchewan, and Newfoundland and Labrador. In 2024, Alberta contributed close to $88 billion in GDP. Other producing regions rely heavily on oil and gas activity relative to the size of their provincial economies, highlighting the sector’s regional economic importance.

GDP by Goods Producing Subsector

The oil and gas extraction subsector generated approximately $88 billion in GDP in 2025, making it the largest goods-producing subsector in Canada. This dominance reflects the capital-intensive nature of oil and gas production and the high value of energy products, reinforcing the sector’s outsized contribution to economic output relative to employment. In addition, a significant portion of Engineering and Other Construction Activities are related to developing incremental oil and gas infrastructure that will serve to increase the relative importance of this sector in future years.

Oil & Gas Direct Jobs by Province

Oil and gas activity extends coast to coast, with Alberta accounting for the majority of direct employment , followed by British Columbia, Saskatchewan, and Newfoundland and Labrador. In 2024, Alberta supported approximately 200,000 direct oil and gas jobs. Other producing regions rely heavily on oil and gas activity relative to the size of their provincial economies, highlighting the sector’s regional economic importance.

Canadian Direct Jobs by Goods – Producing Subsector

Oil and gas extraction accounted for approximately 145,000 direct jobs in 2024, placing it in the middle of Canada’s goods-producing industries by employment. While the sector employs fewer workers than construction or manufacturing, its economic contribution per worker is substantially higher. Statistics Canada estimates that each direct oil and gas job supports multiple indirect and induced jobs across the broader economy (including in construction), implying that the total employment footprint of the sector is significantly larger than direct employment figures alone suggest.

Average Total Compensation per Job

Jobs in the oil and gas extraction subsector are among the highest-paid in Canada’s goods-producing industries, with average total compensation of approximately $167,500 per worker in 2024. This is well above the Canadian average for all industries and roughly 1.7× higher than the goods-producing average. The highest-paying subsector – petroleum & coal manufacturing sector – also includes petroleum refineries. Elevated compensation in these sectors reflects the sector’s high productivity, specialized skill requirements, and capital-intensive operations, and it contributes to strong household incomes and tax revenues for Canada’s economy.

Conventional Operating & Capital Expenditures

Total spending in Canada’s conventional oil and gas sector peaked prior to the late 2014–2015 downturn, declined sharply during the subsequent period of low prices and capital retrenchment, and has partially recovered in recent years. In the period after 2014-15, operating expenditures account for a larger share of total spending, reflecting the industry’s shift toward maintaining production and returning capital to shareholders rather than pursuing aggressive growth. In particular, capital discipline remains a defining feature of the post-COVID-19 investment environment.

Oil Sands Operating & Capital Expenditures

Oil sands spending peaked during the pre-2014 construction boom, when annual capital expenditures exceeded $30 billion. Since then, investment has shifted away from greenfield developments toward sustaining and optimization capital. Recent spending levels reflect a more mature asset base focused on reliability and efficiency rather than expansion, while operating expenditures have remained relatively stable.

Total Canada Oil & Gas Taxes – 2024

In 2024, Canada’s oil and gas industry paid approximately $7.7 billion in combined federal and provincial income taxes. The majority of tax revenues accrued to the federal government through corporate income taxes, including the Large Corporations Tax (LCT), with provinces receiving a smaller but still significant share. These payments underscore the industry’s role as a major contributor to government revenues, particularly during periods of strong commodity prices and profitability.

Canadian Oil & Gas Industry Revenues

Industry revenues rose sharply between 2021 and 2022, driven by strong global oil prices and improved market access, peaking at over $230 billion in 2022. While revenues moderated thereafter, they remain well above pre-COVID-19 levels. Oil sands and conventional oil account for the majority of total revenues, while natural gas contributes a smaller share due to lower relative prices despite record production volumes. Elevated revenues have translated into higher cash flows, royalties, and taxes.

Canadian Oil & Gas Taxes

Oil and gas tax revenues rebounded strongly following the COVID-19 downturn, with 2022 representing a peak year driven by exceptionally high commodity prices. While tax payments declined modestly in 2023 and 2024 due to lower prices, they remain materially higher than pre-2021 levels. This pattern reflects the sector’s sensitivity to price cycles and highlights its importance as a source of government revenue during periods of strong global energy demand.

Canadian Oil & Gas Royalties by Province

Provincial royalty revenues from oil and gas production are highly sensitive to commodity prices and production levels, resulting in pronounced volatility over time. Between 2012 and 2014, elevated oil prices supported strong royalty collections, peaking at approximately $16 billion in 2014. The subsequent commodity price downturn sharply reduced revenues, with total royalties falling to roughly $4–5 billion per year between 2015 and 2016.

Royalty revenues rebounded beginning in 2017 and accelerated significantly after 2020 as global oil prices recovered, and market access improved. In 2022, Canadian oil and gas royalties reached a record high of approximately $34 billion, driven primarily by exceptionally strong oil prices. Alberta accounted for the vast majority of this total, reflecting its dominant role in oil sands and conventional oil production.

While royalties declined from peak levels in 2023 and 2024, they remained materially higher than the pre-pandemic period. Estimated royalties for 2025 are approximately $25 billion, underscoring the continued importance of the oil and gas sector as a key source of provincial government revenue. Alberta consistently represents the largest share of royalties, with smaller but meaningful contributions from Saskatchewan, British Columbia, and offshore Newfoundland and Labrador.