The oil industry in Newfoundland and Labrador seems to be at a tipping point.
For many years we have been a leader in the oil and gas industry in Canada. At some point lately, though, our federal government has seemed to lost faith or simply stopped caring for an industry so vital to our province. The industry has helped create jobs, add significant amounts of money to provincial revenue, help prevent out-migration, and many other sectors benefit indirectly from the industry.
Many provincial programs such as education, transportation and health care are supported by oil and gas. Oil and gas companies make major investments in education and training in places they operate to ensure a more capable workforce and healthy environment. Many companies in the province have turned into international companies due to the success of the oil industry in the province. Oil production accounts for almost 30 per cent of overall provincial gross domestic product (GDP) and over $30 billion of capital has been invested in Canada’s oil and gas industry in Newfoundland and Labrador in the last 25 years, with over 500 local supply and service companies supporting the industry from the province.
More than ever, we need our federal government to help promote our hydrocarbon resources.
During the pandemic, the world has still been using upwards of 70 million barrels of oil per day. Like it or not, petrochemicals are used in mostly everything we touch, and in the common services we rely on, and are used in the manufacture of the personal protective equipment used in hospitals and workplaces every day. More than ever, we need our federal government to help promote our hydrocarbon resources. Without the support how do we survive?
Newfoundlanders have a lower per capita income than the national average, making us a “have-not” province, yet despite our situation we still do not receive equalization. Our average annual GDP growth has been 0.5 per cent over the last five years, making us the only province with negative growth. Would it be in the federal government’s best interest to support the oil industry in times like these or have to bail us out in the near future if help doesn’t come? The cost of inaction in just a 10-year period would see a loss of up to $11 billion in revenue, $59 billion in overall provincial GDP, directly affecting consumer spending, government and community programs, infrastructure and health care.
Canada’s projected 2020 deficit is estimated to exceed $340 billion. Oil and gas production will play a critical role in helping service our country’s debt. The most disappointing part of all this is knowing the potential the province has in oil and gas, being an international leader in the industry. I keep hearing this saying “nobody cares.” I’m starting to believe it.
Jason Kean
St. John’s