Canada has the world’s third-largest oil reserves of any country on the entire planet – trailing only Venezuela and Saudi Arabia.
Not surprisingly, the energy sector has come to play not just an important role in Canada’s economy, but a dominant one, experts say.
There’s a reason that Alberta’s economy is once again booming while the rest of the country is simply plodding along.
READ MORE: Migration to Alberta is exploding
On a purely economic basis, experts say projects like Enbridge’s proposed pipeline to Kitimat, B.C. are critical to guarding future economic prosperity.
“Canada’s economy is now very oil dominated,” economists at Scotiabank said in a note just ahead of Tuesday’s decision by Ottawa on whether to permit or reject Calgary-based Enbridge’s proposed pipeline linking Alberta’s oil patch to the coast of British Columbia.
Their take? “Growing this industry is vitally important for the Canadian economy,” Rory Johnston and Patricia Mohr, two of the bank’s economists, said.
Below are two charts illustrating their point.
The first shows the leading role energy products like oil and gas products play in exports – a section of the economy policy makers and experts are pinning the fate of the country’s economy to for the next few years at least (while consumers curb spending to address big time debt loads).
The second is the breakdown of investment dollars businesses plow into new projects. Again, the oil and gas sector is a pillar, sowing the seeds for future growth.
The Scotiabank economists also said that without new pipelines to and from Alberta, the current surge in oil by rail will simply go on.
Here’s the growth they envisage for rail car deliveries through 2016.
“In lieu of pipeline construction, rail has stepped in to alleviate the strained energy transportation sector,” Scotia’s report said.