Potential Lost Benefits
Over the next 10 years, the estimated loss to the province due to deferment and loss of oil and gas exploration and development projects could be substantial:
- $11 billion in provincial revenues impacting programs, infrastructure, education and health care throughout communities in Newfoundland and Labrador
- $59 billion of total provincial GDP
- 90,000 person-years of employment, resulting in significantly lower consumer spending in retail, restaurants, real estate, and other services
Benefits Received
Newfoundland (2017)
- 23 percent of provincial gross domestic product (GDP) in 2017
- supporting 23,509 jobs (direct, indirect and induced)
- $2 billion worth of labour income
- $1.4 billion worth of consumer spending
- $1.4 billion worth of tax and royalty revenue to provincial and local government
Canada
- 1,637 jobs in Atlantic Canada
- 4,994 in Ontario
- 1,962 in Quebec
- 1,437 in Alberta
- 667 in the rest of Canada
In total, the spending of the offshore oil and gas sector in Newfoundland and Labrador generated an estimated $755 million worth of labour income in the rest of Canada. Overall, the sector boosted GDP in the rest of Canada by more than $1.4 billion and generates some $680 million worth of tax revenue in the other provinces and territories.
Potential Future Benefits
Noia commissioned an economist to model the potential of our offshore. Using the objectives of the provincial Advance 2030 framework for the offshore, and bringing our output to just 650,000 barrels per day:
- Increase total employment supported by the industry across the province to 56,000 jobs (direct, indirect and induced)
- boost labour income across the province to $4.6 billion per year
- increase consumer spending to $3.5 billion per year and
- increase provincial and local government tax and royalty payments to $6.7 billion in 2033
- In 2033, the industry would support 22,737 jobs in other provinces
- $1.6 billion worth of labour income
- $1.2 billion worth of consumer spending
- $3.3 billion worth of tax revenue to the federal government and other provincial governments
- In 2033, for every direct job in Newfoundland and Labrador’s offshore oil and gas industry, there will be an estimated 2.3 jobs created in the rest of Canada.
If the Advance 2030 targets are reached, the economic impact model estimates that between 2018 and 2045, the total royalty and tax revenue will be in excess of $100 billion (in 2018 dollars).
