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:
- Export Development Canada’s (EDC) “business facilitated” for the oil and gas sector disaggregated by each type of transaction (e.g. loans, guarantees, insurance);
- Total federal tax revenue for the oil and gas sector; and,
- 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)