Quebecers Have More To Gain From Alberta Oil Than They Think

According to some commentators and politicians, the only thing Quebecers get from Albertan oil production is potential problems, in particular related to the transport of hydrocarbons, while the benefits are concentrated out West. Montreal mayor Denis Coderre, for instance, has been outspoken in his opposition to the Energy East pipeline, downplaying its economic benefits.

Those benefits, however, are both substantial and widespread, as shown by a new study that has just been published by AppEco on behalf of the oil industry. In it are found some figures that shed new light on this heated debate.

For the 12-month period examined in the study, between 2014 and 2015, a total of 371 Quebec suppliers received $1.2 billion in contracts related to oil activity in Alberta. This led to the creation and maintenance of 16,000 job years, with the Greater Montreal area enjoying the lion’s share of these benefits. Moreover, this economic activity generated $288 million in government revenues, including $215 million for the Quebec government — nothing to sneeze at.

Among the examples cited in the report, there is GHGSat, a company based in Montreal that offers remote sensing services for greenhouse gases (GHGs) using satellite technology. Its satellites in orbit measure GHGs emitted in all sorts of environments all over the world, including Albertan oil development. In connection with Albertan projects, GHGSat anticipates contracts of over $1 million and some ten well-paid jobs in Quebec. And this is just one among many such examples of contracts related to oil production.

In April 2017, Valero Energy announced investments of $500 million in its refinery in Lévis, Quebec. These new funds are in addition to the $2 billion invested over the past decade. Here again, this investment leads to jobs and revenues generated in the province of Quebec. The other refineries located in Montreal and in Saint John, New Brunswick also need access to a supply of oil on the Canadian market in order to maintain jobs. Indeed, there is an entire industrial ecosystem that is dependent on local oil refining.

In addition to this, the simple fact is that the demand for oil remains strong. Oil currently accounts for 40 per cent of the primary energy used in Quebec. Gasoline consumption, for its part, keeps increasing.

Despite impressive technological advances in the field of renewable energy, we still need oil and gas, and we will continue to need oil and gas for some time to come. Moreover, we know that Quebecers prefer that the oil they consume come from Western Canada rather than from abroad. In fact, it is now 65 per cent of Quebecers — two out of three — who prefer that Quebec import oil from Western Canada, versus 59 per cent who favoured this option a year ago.

It therefore bears repeating, for the sake of public decision-makers who may not have gotten the message: Albertan oil sands development is profitable for Quebec, and Quebecers want Albertan oil. Those who think that such activity generates only negative externalities for them need to take note of these realities. The not-in-my-backyard syndrome is a position that is becoming harder and harder to defend in this day and age.

Germain Belzile est chercheur associé senior, département des actualités, à l’IEDM. Il signe ce texte à titre personnel.