Resources have been the foundation of the Canadian economy. We have all the ingredients, the talent, and capacity to flourish in the new economy. But to continue to prosper and attract capital, we must create an innovative ecosystem that improves our economic and environmental competitiveness.
Resources of the future
Resources of the Future refers to transitioning from the old resource economy into a new resource economy. It’s where innovation drives economic and environmental competitiveness in the energy, mining and forest sectors, and which leverages Canada’s natural resources advantage to transition to a low-carbon economy.
At A Glance
Resources are a major component of Canada’s export mix
Canada has many strengths
- 3rd largest resource endowment per capita in the worldFootnote8
- 3rd largest proven oil reserves in the worldFootnote9
- 5th largest oil producer in the worldFootnote10
- 3rd largest forest area in the world.Footnote11
- Top destination for non-ferrous miningFootnote12
- 2nd lowest household electricity prices of OECD countriesFootnote13
- Forest industry outgrew overall economy in 2015
- Potential supplier of minerals for clean technology and energy applications
- Canada is a global leader in sustainable forest management.Footnote14
- Canada is the only oil and gas producing nation in the world that has a cap on greenhouse gas emissions that was collaboratively established by industry and governmentFootnote15 Footnote16
- Canada is the first oil and gas producing jurisdiction in the world has established an organization consisting of the largest oil producers in the country with the sole purpose to collaborate on environmental technologies and drive environmental innovation.Footnote17
Canada faces some challenges
- Volatile commodity markets and prices
- Lack of markets and access to markets
- Declining spend on mineral exploration and active projects. In 2016 active projects were 50% lower than the peak at 2011. Even with any expected recovery in the next year, total spend will continue to trend lower than past years.
- Relatively high development costs, especially for projects in remote areas with little infrastructure
- Foreign-based oil companies de-investing in Canada due to high costs and high price differential due to constrained market
- Shifting global supply and demand
- Trade renegotiation and disputes creating uncertainty
- Declining demand for some traditional products (e.g., paper based)
- Regulatory layers and delays create cost burden
- Evolving and uncertain Indigenous legal landscape
Canada has strong potential to capture and retain a leadership share of the evolving global resource market. Realizing that potential demands a collaborative effort between government and industry to position energy, mining and forestry to be competitive in the economy of the future. Doing so will help attract the investment and capital flows that Canada’s resource industries need to continue to advance and adapt. The Resources of the Future Economic Strategy Table has identified the following priority themes. Competitiveness, environmental performance, inclusiveness and safety are the underlying principles behind each theme:
- Regulatory certainty
Regulations need to maintain public confidence in Canada’s resource industries and provide longer-term predictability and certainty for investors. At the same time, they must support Canada’s participation in the global innovation race and must maintain Canadian industrial competitiveness as the world transitions to low carbon products. Achieving these goals requires, among other things, close coordination between the various levels of government, science-based decision-making and approaches that are outcomes-based rather than prescriptive.
- Innovation for competitiveness
Given the changing competitive, environmental and global economic realities of the resource sector, companies need to be “future-fit” with value propositions that will apply to tomorrow’s realities. Creating an agile, entrepreneurial culture of innovation and creating the right policy conditions for capital flow will enable the resources sector to be competitive. Innovation for competitiveness refers to innovation that delivers the highest return on investment at the highest efficiency with the lowest environmental and social risks. Creating the right policy conditions that give companies the space and resources to innovate with this mindset will unlock financial returns and environmental performance.
- Access to markets
The market for Canadian resources is global, and yet there exists limitations on our ability to reach these markets. Access to opportunity depends on a variety of factors — from strong trade agreements that leverage Canada’s global brand to east-west infrastructure that gives us access to tidewater in order to capture global market opportunities. As well, Canada’s resource industries need forward visibility into emerging markets so they can establish the right conditions for accessing those opportunities early on.
- Indigenous people and communities
Many Indigenous communities across Canada depend economically on natural resources. Canadian resource companies today are collectively the country’s largest employer of Indigenous people. A truly sustainable resources sector is one in which indigenous communities are engaged participants that benefit actively from resource development from jobs and business support services to active equity partners.
- Attracting and re-skilling talent
Talent is the foundation for cultural change enabling Canada to be a global competitive force in natural resource development, making Canadians proud of the success we create today and in the future. For the resources sector, in-demand skills going forward will include data analytics, engineering, technology-related skills and entrepreneurial thinking, where ‘skills’ refers to entry-level, trades, professionals and all levels of leadership, and must include the involvement of more women, youth, Indigenous people and other under-utilized segments of the population.
Members of the Resources of the Future Economic Strategy Table