Income grew fastest in provinces with large oil and gas deposits

StatsCan study over 66 years provides insight into which provinces experienced the most growth over three generations

Data released Thursday by Statistics Canada may be a couple of years old but it illustrates the importance of the oil and gas sector to the economies of several provinces.

crude oil
Alberta, Saskatchewan and Newfoundland and Labrador had the highest levels of GDP per capita

“According to a new study, from 1950 to 2016, real gross domestic income (GDI) per capita grew fastest in provinces with large oil and gas deposits, such as Alberta (+2.7 per cent per annum based on a compound annual growth rate), Saskatchewan (+3.0 per cent per annum) and Newfoundland and Labrador (+3.6 per cent per annum) – and in provinces that had the lowest current dollar gross domestic product (GDP) per capita values in 1950, such as Prince Edward Island (+3.1 per cent per annum), New Brunswick (+2.7 per cent per annum) and Nova Scotia (+2.6 per cent per annum),” said the federal agency.

The study examined GDP per capita and real GDI per capita over a 66-year period to provide insight on which provinces experienced the most growth over the course of three generations, and how this affected per capita income levels across provinces.

“In 2016, the major oil and gas producing provinces of Alberta, Saskatchewan and Newfoundland and Labrador had the highest levels of GDP per capita relative to that of Canada, followed by Ontario and British Columbia,” it said.


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“This ranking was considerably different in 1950, when Saskatchewan and Newfoundland and Labrador had GDP per capita below that of Canada, and the highest GDP per capita values relative to Canada’s were in Ontario and British Columbia. Although the Atlantic provinces had lower GDP per capita relative to that of Canada in both 1950 and 2016, their relative position has improved. For example, GDP per capita in Prince Edward Island relative to Canada’s rose from 44.8 per cent in 1950 to 75.3 per cent in 2016.”

StatsCan said analysis of data covering long periods is important because it allows current events to be viewed from an historical perspective.

“Canada has been subject to long commodity cycles, and real income growth over these cycles can be compared using the long-run data,” it said.

“For example, the commodity boom over the 2000s was marked by record high oil prices and strong real income growth in Alberta. But relative to the oil shocks of the 1970s, the increase in Alberta’s real income was less than half as large. Moreover, it was less permanent, with a cumulative increase of a little over 11 per cent in real GDI per capita from 2002 to 2015, compared with a cumulative increase of over 60 per cent in the 1970s.”

– Mario Toneguzzi


INCOME, oil and gas

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