OTTAWA, ON (May 1, 2024): Canada is facing nothing short of an economic crisis. And the irony is that it literally has the “energy” to overcome it. And so, it is long overdue that the key players across all sectors get together to chart a serious, viable path forward.
Since before Confederation, natural resources have been key to Canada’s prosperity. Yet in 2023, the government of Canada failed to mention Canada’s abundant resources while listing supposedly key facts about Canada’s attractiveness for foreign direct investment.
In a new paper, Canada’s resource sector: protecting the golden goose, Senior Fellow Philip Cross and Distinguished Fellow Jack Mintz take on the task of reminding Canadians of the primordial role that the energy and resource sector have played in raising the standard of living in Canada today.
Cross and Mintz note that where critics of Canada’s resource industry have long cultivated a negative image, natural resources contribute 14.9% of Canada’s GDP, account for over 45% of manufacturing output, employ over a million Canadians, and drive Canada’s comparative advantage in trade.
“Natural resources are the only sector in which Canada has a trade surplus,” write Cross and Mintz. “Despite a prolonged investment slump in an increasingly hostile regulatory environment, natural resource industries still account for nearly half of all business investment in Canada.”
Furthermore, noting that energy of all sources represents half of Canada’s resource sector, Cross and Mintz warn that a transition to green energy represents a major challenge to Canada.
“The universal dependence of economic activity on energy reflects the critical role the latter plays in economic growth,” add Cross and Mintz, warning that if the transition to new energy sources continues to be mismanaged, Canadians will experience a steep decline in their incomes, eroding our standing in an increasingly dangerous and volatile world.
In the interim, the authors recommend that Canada take full advantage of its resource and energy wealth by exporting the materials that the world will need in the coming years. This strategy requires a completely different approach than the one underway in Canada, which is choosing the high-cost rather than least-cost approach to the energy transition.
Only by embracing our natural advantage can Canada contribute to the well-being of people at home and around the world, marking a legacy of the land gifted to us, a true north strong and free.
This paper was published in support of an important event, Unleashing Canada’s potential: a collaborative energy policy dialogue, which MLI, in partnership with the C.D. Howe Institute, hosts on May 1- 2, 2024 in Toronto.
To learn more, read the full paper here:
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Philip Cross is a Munk Senior Fellow at the Macdonald-Laurier Institute.
Jack Mintz is a Distinguished Fellow at the Macdonald-Laurier Institute.
For further information, media are invited to contact:
Skander Belouizdad
Communications Officer
613-482-8327 x111
skander.belouizdad@macdonaldlaurier.ca
