​McMillan: Energy sector helping Canada weather COVID-19 storm

For the Canadian Association of Petroleum Producers (CAPP) and our member companies, health and safety is a top priority. We support governments’ measures to protect the health of citizens and flatten the curve in the spread of COVID-19.

We know how essential oil and natural gas are to our daily lives. Crude oil, natural gas and other petroleum products are essential for transportation fuels, heating and electricity for all Canadians.

Canada’s energy sector is facing unprecedented challenges as a result of the collapse in energy demand stemming from the pandemic. The impacts are being exacerbated by Saudi Arabia and Russia, which are exploiting this human health crisis in an attempt to expand their share of the global oil market.

As a result, Canadian upstream companies have been forced to cut capital expenditures by more than $6 billion in the last few weeks alone.

This historical drop in investment significantly weakens the economy and threatens the jobs of nearly 500,000 Canadians. In every corner of the country, these Canadians are part of the energy industry and its nationwide supply chain.

Despite the hardships, Canadian producers have committed to keeping energy flowing. And many of us find ourselves self-isolated and dependent on that energy in our homes to keep us working and living.

This includes fuelling the trucks delivering groceries and critical care supplies across the country and in the planes bringing Canadians safely home. Oil is also a core ingredient in lifesaving medicines, hand sanitizers, and in the plastic required to build critical medical and personal protective equipment such as goggles and face shields.

This is a responsibility the oil and natural gas sector takes seriously, and we value the trust Canadians place in the industry.

A government designation for the oil and natural gas sector as an essential service will help to ensure energy production isn’t disrupted through this crisis, while maintaining a significant measure of economic activity due to the industry’s far-reaching supply chain.

For example, Ontario’s participation in the oil sands supply chain was valued at $1.89 billion 2016 and 2017, supporting more than 63,000 jobs and 1,162 businesses. The supply chain of producers is associated with close to 10,000 businesses across the country.

In the long term, the industry is resilient. Oil and natural gas producers have weathered previous low prices and economic challenges, and came out fighting on the other side of the storm to build an economic revival.

However, the more immediate reality is that companies are in survival mode, deeply cutting costs and capital expenditures to remain operational.

Natural gas and oil are our country’s largest export commodities. According to Statistics Canada, the industry generated about $110 billion in direct real gross domestic product in 2019. The sector contributed an average of $8 billion in annual revenue to governments in recent years.

All Canadians deserve the opportunity for prosperity and security. So it’s so important that we start looking ahead to economic recovery. It will take work and commitment, leadership and resolve. And it’s essential that we begin now.

What we choose to do today, in terms of support for the energy industry, will determine Canada’s role as a global energy supplier in the future.

A strong industry creates jobs across Canada and much-need revenue for governments in every part of the country. The oil and natural gas industry is key to Canada’s economic well-being and it’s determined to help lead the country’s recovery.

We won’t let Canada down. We’ll be there on the other side of this storm, to work with governments and support Canadians.

Together we will build a foundation for long-term resilience in this country we call home.

Tim McMillan is president and CEO of the Canadian Association of Petroleum Producers.

Tim McMillan is president and CEO of the Canadian Association of Petroleum Producers.