Investment in the Canadian and U.S. Oil and Gas Sectors

As such, the economic health of the oil and gas sector is a direct contributor to employment and economic activity in Western Canada and an indirect contributor to the rest of the domestic economy through links to industries that supply inputs to the sector, as well as use the outputs of the sector. [...] Since activity in the mid and downstream sectors will ultimately reflect the production of crude oil and natural gas in the upstream sector, the willingness of companies to explore for and produce oil and gas in Western Canada dictates the pace of eco- nomic activity throughout the industry's total supply chain. [...] The data highlights the dramatic decline in the performance of this economically important sector in Canada, particularly relative to the US, and underscores the economic costs to the Canadian economy, particularly to the Alberta economy, of the ongoing politicization of the infrastructure investment process in Can- ada's oil and gas sector. [...] Section 2 discusses the importance of the oil and gas industry to the Canadian economy and particularly to the provincial economies of Alberta and Saskatchewan.5 It also highlights the importance of the upstream oil and gas segment of the industry. [...] Given the data reported in figure 1, the oil and gas sector therefore accounts for almost 30 percent of Alberta's GDP and slightly over 23 percent of Sas- katchewan's GDP.9 Hence, while the health of the oil and gas industry is important to the overall Canadian economy, it is crucial to the economic performance of the economies of Alberta and Saskatchewan.