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Market Snapshot: Crude oil price downturn has varied economic impact across Canada
Release date: 2016-09-15
Canadian gross domestic product (GDP) grew 1.2% in 2015, significantly slower than the 2.6% growth experienced in 2014. Provinces highly reliant on the energy sectorFootnote 1 – namely Alberta, Newfoundland and Labrador, and Saskatchewan – experienced contractions in GDP between 2014 and 2015, while the majority of the other provinces and territories saw some level of growth.
Crude oil prices declined roughly 50% between 2014 and 2015,Footnote 2 and while the energy sector’s share of GDP is not limited to upstream crude oil activity, there is a correlation between provinces with significant crude oil production and negative GDP growth. Between 2014 and 2015, GDP in Alberta, Newfoundland and Labrador, and Saskatchewan contracted 4.0%, 2.2%, and 1.4%, respectively.
Source and Description
Description: The bar charttrates, for Canada and its provinces and territories, the per cent change in total GDP from 2014 to 2015 and the per cent share of GDP in each jurisdiction attributable to the energy illus sector in 2014. The graph shows that for Alberta, Saskatchewan, and Newfoundland and Labrador, where this sector accounts for more than 20% of total provincial GDP, total GDP growth was negative between 2014 and 2015.
The remaining eight provinces and territories listed have 10% or less of GDP attributable to the energy sector. All experienced positive GDP growth between 2014 and 2015 with the exception of Yukon.
Note: GDP share figures for Prince Edward Island and Nunavut were not available due to energy sector data being supressed by Statistics Canada for confidentiality reasons.
For provinces and territories less exposed to the energy sector, or specifically, more insulated from the drop in oil prices, GDP growth was generally positive between 2014 and 2015. British Columbia, Manitoba, and Ontario, for example, experienced GDP growth above 2% based on their more robust real estate, manufacturing, and service sectors. A notable exception was Yukon, which experienced GDP contraction of 3.8% due primarily to a downturn in mineral prices and production.
For Canada as a whole, 9.7% of GDP was attributable to the energy sector in 2014. This number declined to 9.3% in 2015.
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