Additional information - Energy sector and agriculture: federal revenue forgone from tax provisions

Senator Rosa Galvez requested that the PBO estimate the cost of tax provisions specific to fossil fuel development including the deduction of resource related expenses and incentives for liquid natural gas (LNG) capital investment. She also requested an estimate of the lost revenue from exemptions to the carbon levy for agriculture. On December 8, 2021, PBO published the report “Energy sector and agriculture: federal revenue forgone from tax provisions” which provides estimated revenue impacts for the items requested.

Following the report’s publication, Senator Galvez requested the following additional information:

  1. Export Development Canada’s (EDC) “business facilitated” for the oil and gas sector disaggregated by each type of transaction (e.g. loans, guarantees, insurance);
  2. Total federal tax revenue for the oil and gas sector; and,
  3. The GDP contribution of the oil and gas sector (excluding mining and quarrying).

This blog post contains the additional requested information. The first table below provides the total business facilitated in the oil and gas sector by EDC from 2015 to 2020 (the last full year that data is available).  Business facilitated is defined as the total EDC transaction volume in millions of dollars.

Export Development Canada: Business facilitated in the oil and gas sector by transaction type

Millions of dollars

2015

2016

2017

2018

2019

2020

Financing

 315

 6,933

 5,595

 6,078

 4,684

 2,051

Guarantees

 1,021

 827

 869

 1,374

 1,098

 2,140

Insurance

 3,561

 4,192

 3,960

 4,998

 4,812

 3,907

Total

 8,397

 11,952

 10,425

 12,450

 10,594

 8,098

Source:    Export Development Canada

 

The second table contains the total federal tax paid by enterprises engaging in oil and gas extraction as well as support activities.  These data correspond with industry NAICS codes 211 and parts of 213.

Federal tax paid by enterprises engaging in oil and gas extraction and support activities

Millions of dollars

2015

2016

2017

2018

2019

Total federal tax

720

552

544

525

807

Sources:  Statistics Canada. Table 33-10-0006-01  Financial and taxation statistics for enterprises, by industry type

The third table provides the GDP at basic prices of the oil and gas extraction industry and support activities as defined by NAICS codes 211 and 21311.  The table also provides the GDP at basic prices for all industries and the oil and gas share. It does not include the indirect economic impacts of this sector on other areas of the economy.

 

Gross domestic product at basic prices

Millions of dollars

2015

2016

2017

2018

Oil and gas extraction industry and support activities

61,381

50,158

73,263

84,050

All industries

1,856,809

1,886,103

1,991,534

2,083,379

Oil and gas share of total (per cent)

3.3

2.7

3.7

4.0

Source:    Statistics Canada. Table 36-10-0401-01  Gross domestic product (GDP) at basic prices, by industry (x 1,000,000)