The University of Toronto. Canada s Natural Resources and Energy Sector Analysis

Transcription

1 The University of Toronto Canada s Natural Resources and Energy Sector Analysis 1

2 Presentation Overview 1. Industry Overview Introduction Performance 2. Forest Sector Profile Performance Employment Trade Paper Manufacturing Sub Sector - Introduction - Employment - Performance Wood Products Manufacturing Sub Sector - Introduction - Employment - Performance 2

3 Presentation Overview 3. Minerals and Mines Sector Profile Performance Employment Trade Mining and Quarrying Sub Sector - Introduction - Performance 4. Energy Sector Profile Performance Employment Trade Crude Oil Sub Sector Natural Gas Sub Sector Petroleum Sub Sector Electricity Sub Sector Renewable Energy Sub Sector 5. Emerging Trends 3

4 Canada Natural Resources and Energy Industry Overview 4

5 Canada Natural Resources and Energy Introduction The natural resources sectors and earth sciences industries have been an engine of economic growth and job creation for generations In 2009 alone, the sectors generated 11 percent, or $133 billion, of Canada s gross domestic product (GDP) and directly employed close to 759,000 people Natural Resources Canada (NRCan), a department of the Government of Canada, has a mandate to ensure the sustainable development and responsible use of the country s natural resources Natural resources sector is classified as forests, minerals and metals, energy, and geomatics and geoscience fundamental to the daily lives of Canadians As a leading exporter of natural resources and resource-based technology and knowledge, Canada contributes to the wellbeing of people in many countries and promotes the sustainable development of natural resources in today s investment climate Source: Canada Natural Resources:

6 Canada Natural Resources and Energy Industry Performance 6

7 In 2009, the sector generated 11 percent, or $133 billion, of Canada s gross domestic product (GDP) Source: Canada Natural Resources:

8 The natural resources sector was a major contributor to the Canadian economy with a GDP of $133 billion Source: Canada Natural Resources:

9 In 2009, the natural resources sectors (energy, forest and mining) had a trade balance of $69.5 billion (33%) Source: Canada Natural Resources:

10 In 2009, the natural resources sectors played a important role in GDP Employment, Trade and New Capital Investments Source: Canada Natural Resources:

11 Forest sector Introduction 11

12 Industry classification Forest Sector Source: Datamonitor 12

13 Canada s Forest Sector is one of the leading sectors in the world ƒcanada has 10 percent of the world s forests Canada s forest, other wooded land and other land with tree cover are made up of million ha (87.5 percent) of forest, 41.8 million ha (10.5 percent) of other wooded land and 7.8 million ha (2 percent) of other land with tree cover Annually, less that 1 percent of Canada s forests are harvested; 0.7 million ha were harvested in 2008 Revenues from the sale of timber from provincial and territorial crown lands were estimated to be $0.7 billion in 2008 Source: Canada Natural Resources:

14 Forest sector has three main subsectors, Solid wood product manufacturing, Pulp and paper product manufacturing and Forestry and logging There are three main subsectors: Solid wood product manufacturing Pulp and paper product manufacturing Forestry and logging Source: NRCAN- Natural Resource Canada 14

15 The contribution of forest biomass to Canada s secondary energy use has increased from about 3.5% in the 1970s to about 6.5% today Source: NRCAN- Natural Resource Canada 15

16 Forest sector Industry Performance 16

17 Forest Sector contributes to 1.8% of the Canadian GDP The forest sector s contribution to the Canadian economy (GDP) in 2002 constant dollars was $20.9 billion, or 1.8 percent, in 2009 In 2009, shipments of pulp, paper and paperboard reached a level of 21.1 million tonnes (t), a decrease of 16.1 percent from the previous year Production of softwood lumber was 44.4 million cubic meters in 2009 New capital investments totaled $1.6 billion in 2009: pulp and paper product manufacturing industry, $0.9 billion (56.2 percent); wood product manufacturing industry, $0.5 billion (31.3 percent); and forestry and logging industry, $0.2 billion (12.5 percent) Revenue from goods manufactured was $60.8 billion in 2008 Source: Canada Natural Resources:

18 Canada s forest industry varies across the country Eastern Canada is dominated by pulp and paper product manufacturing Western Canada is dominated by wood product manufacturing Quebec, Ontario and British Columbia have the greatest numbers of forest workers The Atlantic Provinces, Quebec and British Columbia are the most forest-dependent regions, with a large share of their economy based on the sector Source: Canada Natural Resources:

19 Forest sector Employment 19

20 The Forest sector provides direct employment to 1.3 % of Canadian work force In 2009, the sector provided direct employment for people, representing 1.3 percent of total employment in Canada: wood industries, for people; pulp and paper product manufacturing industry, for people; forestry and logging industry, for people; and support activities for forestry industry, for people Employment is spread across Canada but is primarily in Quebec ( people), British Columbia ( people) and Ontario ( people) Wages and salaries for direct employment were $10.3 billion in 2008 Source: Canada Natural Resources:

21 Forest sector Trade 21

22 Canada is the world s largest forest product exporter ƒin 2009, Canada was the world s third-largest forest-product exporter (8.3 percent) Forest products were a major contributor to Canada s surplus balance of trade in 2009 ($14.4 billion) The total value of Canadian forest-product domestic exports decreased by 21.7 percent in 2009 to $23.6 billion British Columbia accounted for $7.5 billion (31.8 percent); Quebec, $7.4 billion (31.4 percent); Ontario, $4.0 billion (17.0 percent); and other provinces and territories, $4.7 billion (19.8 percent) Source: Canada Natural Resources:

23 Paper Manufacturing subsector Introduction 23

24 Ontario has the highest number of Paper Manufacturing establishments Source: Canadian Industry Statistics 24

25 There is an average annual increase of 0.8% in the number of establishments in the Paper Manufacturing subsector but a decrease of 2.2% for last year Source: Canadian Industry Statistics 25

26 The percentage of small and medium-sized businesses that were profitable in the Paper Manufacturing subsector in 2008 was 65.9%, with 34.1% of firms failing to turn a profit Source: Canadian Industry Statistics 26

27 Paper Manufacturing subsector Employment 27

28 The total number of employees in the Paper Manufacturing subsector decreased on an average by 4.8% between There was a decrease of 9.0% in employment between 2008 and 2009 Source: Canadian Industry Statistics 28

29 The number of production employees saw a decrease of 5.1% per year on average and a decrease of 9.9% in the last year. Administrative employees saw a decrease of 3.9% per year and a decrease of 5.9%in the last year Source: Canadian Industry Statistics 29

30 In the Paper Manufacturing subsector, total salaries and wages paid to employees have decreased from $5.2 billion in 2000 to $3.7 billion in 2009, an average annual decrease of 3.4% Source: Canadian Industry Statistics 30

31 Between 2008 and 2009 production worker wages decreased by 10.5%. The salaries and wages of administrative workers, on the other hand, declined from $1.3 billion to $1.0 billion. Salaries and wages decreased by 6.5% Source: Canadian Industry Statistics 31

32 Paper Manufacturing subsector Performance 32

33 Net revenues in the Paper Manufacturing subsector have decreased from $12.8 billion in 2000 to $833.9 million in 2009 or by 0.2% per year on average. In the latest year net revenues decreased by 30.6% Source: Canadian Industry Statistics: 33

34 The decrease in GDP reported between 2001 and 2010 represented a compound annual rate of 2.7%. Between 2009 and 2010, the total value-added of the Paper Manufacturing subsector increased by 1.5% Source: Canadian Industry Statistics 34

35 Exports from Canada to US is way higher compared to exports to other countries MINES Source: Canadian Industry Statistics 35

36 Most of the exports happen out of the province of Quebec Source: Canadian Industry Statistics 36

37 Wood manufacturing subsector Introduction 37

38 Ontario has the highest number of Wood Product Manufacturing establishments Source: Canadian Industry Statistics 38

39 The number of establishments increased by an average of 4.5%. Over the most recent year, the number of establishments decreased by 3.7% Source: Canadian Industry Statistics 39

40 The percentage of small and medium-sized businesses that were profitable in the Wood Product Manufacturing subsector in 2008 was 73.2%, with 26.8% of firms failing to turn a profit Source: Canadian Industry Statistics 40

41 Wood manufacturing subsector Employment 41

42 The total number of employees in the Wood Product Manufacturing subsector decreased by 4.3% over time span. There was a decrease of 14.3% in employment between 2008 and 2009 Source: Canadian Industry Statistics 42

43 The percentage of employees that are production workers decreased from 88.0% in 2000 to 82.0% in As a result, there was a relative increase in the proportion of administrative workers Source: Canadian Industry Statistics 43

44 The average annual salaries for employees of the Wood Product Manufacturing subsector rose at an average rate of 1.2% per year. There was a decrease of 0.6% over the period Source: Canadian Industry Statistics 44

45 The salaries and wages of administrative workers, on the other hand, grew at an average annual rate of 0.3%. Between 2008 and 2009, these salaries and wages decreased by 13.1% Source: Canadian Industry Statistics 45

46 Wood manufacturing subsector Performance 46

47 Net revenues in the Wood Product Manufacturing subsector have not changed significantly Source: Canadian Industry Statistics 47

48 The decrease in GDP reported between 2001 and 2010 represented a compound annual rate of 0.8% Source: Canadian Industry Statistics 48

49 Canada Exports mostly to US, but exports to China are growing at a fast rate Source: Canadian Industry Statistics 49

50 Most of the exports happen out of the province of British Columbia Source: Canadian Industry Statistics 50

51 Minerals and Metals Sector Introduction 51

52 Canada is one of the leading mining nations in the world Canada is one of the leading mining nations in the world, producing more than 60 minerals and metals In 2009, more than 220 principal producing mines (metal, non-metals and coal mines), more than 3000 stone quarries and sand and gravel pits, and about 50 non-ferrous smelters and refineries and steel mills were operating in Canada Canada s estimated mineral production in 2009 was $32.2 billion Nearly 80 percent of the total was accounted for by Ontario (19.7 percent), Quebec (19.3 percent), British Columbia (17.8 percent), Saskatchewan (15.6 percent) and Newfoundland and Labrador (7.1 percent Source: Canada Natural Resources:

53 Minerals and Metals Sector Industry Performance 53

54 Mining and mineral-processing industries generated 2.7 %of the Canadian GDP Mining and mineral-processing industries generated 2.7 percent of the national GDP and contributed $31.9 billion to the Canadian economy Exploration and deposit appraisal expenditures were $1.9 billion, and spending intentions for 2010 indicate an increase to $2.8 billion Capital investment spending in the mining and mineral processing industries were $9.8 billion in Spending intentions for 2010 are expected to reach $11.9 billion Gold was the top metallic mineral produced in Canada, with shipments valued at $3.7 billion, followed by iron ore at $3.2 billion and aluminum at $3.0 billion The leading non-metallic minerals were potash, which had a value of $3.4 billion; diamonds, at $1.7 billion; and sand and gravel, at $1.5 billion. Coal was the top mineral produced in Canada, with shipments valued at $4.5 billion Source: Canada Natural Resources:

55 In 2009, Canada exported minerals and metals worth over $66 billion ($49 billion in metals, $12 billion in nonmetals, and $5 billion in coal), accounting for 18% of Canada s total exports Source: NRCAN, Natural Resources Canada 55

56 Value of Metallic mineral production is higher in Canada Source: NRCAN, Natural Resources Canada 56

57 Production of Canada s Leading Minerals Source: NRCAN, Natural Resources Canada 57

58 Production of Canada s Leading Minerals Source: NRCAN, Natural Resources Canada 58

59 Minerals and Metals Sector Employment 59

60 The Mining and Mineral processing sector provides direct employment to 2.1 % of Canadian work force In 2009, total direct employment in the mining and mineral processing industries people accounted for 2.1 percent of Canada s total employment. Approximately people were employed in mining, people were employed in smelting and refining, and people were employed in the mineral-processing and manufacturing industries Wages and salaries remained competitive in mining and mineralprocessing industries, with 2009 average weekly earnings at $1,056 Source: Canada Natural Resources:

61 The mining and mineral processing sector provides direct employment to 2.1 % of Canadian work force Source: NRCAN, Natural Resources Canada 61

62 Minerals and Metals Sector Trade 62

63 Canada is one of the world s leading exporters of minerals and mineral products ƒcanada is one of the world s leading exporters of minerals and mineral products. These products make a significant contribution to Canada s international trade, accounting for 19.2 percent of Canada s domestic exports in 2009 Canada continues to be the world s leader in the production (by volume) of potash, and it ranks in the top five countries for the production of primary aluminum, cobalt, molybdenum, nickel, platinum group metals, salt, titanium concentrate, uranium and zinc Canada ranks second in the world in value of diamond production Canada continues to be the third-largest producer of primary aluminum in the world Mineral and metals products (including coal) accounted for almost 35 percent of coastwise shipping and more than 52 percent of international shipping in 2007 Source: Canada Natural Resources:

64 Canada is one of the world s leading exporters of minerals and mineral products Source: Canada Natural Resources:

65 Mining and Quarrying subsector Introduction 65

66 Ontario has the highest number of Mining, Quarrying and Extraction establishments Source: Canadian Industry Statistics 66

67 The percentage of small and medium-sized businesses that were profitable in the Mining and Quarrying (except Oil and Gas) subsector in 2008 was 78.0%, with 22.0% of firms failing to turn a profit Source: Canadian Industry Statistics 67

68 Mining and Quarrying subsector Industry Performance 68

69 Products are predominantly exported to US from the year 2009 prior to that it was the UK Source: Canadian Industry Statistics 69

70 Most of the exports happen out of the province of Ontario Source: Canadian Industry Statistics 70

71 Energy sector Introduction 71

72 Canada produces large quantities of energy for both domestic consumption and export Canada has a vast and diversified portfolio of energy resources Taking advantage of this endowment, Canada produces large quantities of energy for both domestic consumption and export In 2009, Canada s production of primary energy i.e. energy found in nature before conversion or transformation totaled 16,543 petajoules (PJ). Fossil fuels accounted for the greatest share of this production, with crude oil representing 36.8 percent; natural gas, 37.7 percent; and coal, 8.2 percent Renewable energy sources were also important, with hydroelectricity representing 7.9 percent; wood, 3.4 percent; and emerging forms (e.g. wind, tidal and solar), 0.1 percent. Nuclear energy (generated from the primary source of uranium) accounted for 5.9 percent Source: Canada Natural Resources:

73 Canada has the second largest oil resource base second only to Saudi Arabia Crude oil reserves at the beginning of 2009 were estimated at 27.8 billion cubic metres (bcm) providing Canada with a resource base second only to Saudi Arabia Oil sands represented the majority of these reserves with 27.0 bcm, while conventional sources amounted to 0.8 bcm. The ultimate recoverable potential from the Alberta oil sands is estimated to be more than 50.0 bcm Production of crude oil in Canada totalled 158 million cubic meter, or thousand cubic meter per day, in 2009 Conventional sources provided 51.0 percent of total production, while oil sands production, which has been growing in recent years, accounted for the remainder About two thirds of crude oil production is exported, while the balance is processed by Canadian refineries into refined petroleum products, such as gasoline, diesel and heating oil Source: Canada Natural Resources:

74 95% of the Natural gas is from Conventional sources ƒnatural gas reserves at the beginning of 2009 totaled 1,754 bcm. Of this amount, about 95 percent is from conventional sources, and the remainder is from unconventional sources (such as coal bed methane and shale gas) The total potential from conventional resources is estimated to be 10.1 trillion cubic metres (tcm), while recent estimates suggest that the potential from unconventional resources is in the range of 10.7 to 26.8 tcm Marketable production of natural gas in Canada amounted to bcm in Close to two thirds of this production was exported to the United States (U.S.), and the balance was sold to Canadian consumers Source: Canada Natural Resources:

75 Hydroelectricity represented 60.4 percent of total generation in Canada Electricity generation in Canada amounted to 585 terawatt hours in 2009 Canada s abundant water resources provided a significant contribution in this regard, as hydroelectricity represented 60.4 percent of total generation. Other sources of electricity supply included coal (16.9 percent); nuclear (14.6 percent); petroleum products, natural gas and waste (7.5 percent); and emerging renewable sources (0.6 percent), i.e. solar, wind and tidal Quebec accounted for 33 percent of that amount (97 percent from hydro), and Ontario accounted for 25 percent (56 percent from nuclear sources) On a regional basis, Alberta accounted for 64 percent of Canada s energy production. Other leading energy provinces were British Columbia (13 percent), Saskatchewan (7 percent), Quebec (5 percent) and Ontario (3 percent) Alberta is the leading producer of fossil fuels, Quebec is the largest producer of hydroelectricity, and Ontario is the largest producer of nuclear energy Source: Canada Natural Resources:

76 Energy sector Industry Performance 76

77 Energy sector accounts for 6.7 percent of Canadian GDP In 2009, the GDP of Canada s energy sector i.e. industries involved in the production, transformation and transportation of energy reached $80.2 billion (in 2002 constant dollars), accounting for 6.7 percent of Canadian GDP In 2009, new capital investments in energy-related industries represented 20.1 percent of Canadian investments The oil and gas extraction industry accounted for about half of this amount, while the electric power industry accounted for about one third The energy sector, excluding service stations and wholesale trade in petroleum products, provided direct employment for people in 2009, or 1.8 percent of employment in Canada. In addition, service stations and wholesale trade in petroleum products provided direct employment for people (0.7 percent) In 2009, energy accounted for 21.6 percent of merchandise exports. The energy trade balance ranked first as a contributor to Canada's positive overall trade balance Source: Canada Natural Resources:

78 US is Canada s biggest market for energy products ƒcanada is an open economy, and taking advantage of its sizeable energy resources, it has become an important and reliable energy provider to the world. In 2009, Canada exported $77.9 billion of energy products, of which 97 percent was to the United States Exports of crude oil amounted to million m3 in 2009, representing a value of $42.9 billion. Canadian crude oil accounted for 21 percent of U.S. crude imports and held a 15 percent share of the overall U.S. market. Exports of refined petroleum products in 2009 totaled 24.4 million cubic meter, or $14.2 billion Canada exported 93.8 bcm of natural gas, all of it to the United States. The value of these exports was $16.0 billion. Canadian natural gas accounted for more than 87 percent of U.S. gas imports and held a 13 percent share of the overall U.S. market Canada also imported $34.0 billion of energy products, mostly crude oil, refined petroleum products and natural gas Source: Canada Natural Resources:

79 US is Canada s biggest market for energy products Source: Canada Natural Resources:

80 Crude Oil, Natural Gas and Petroleum 80

81 Production and Demand for Crude Oil and Natural Gas depends upon how well the economy is doing Source: NRCAN, Natural Resources Canada 81

82 Crude Oil 82

83 Canada is a leading oil producer in the world Canada is the 6th largest oil producer in the world, and a price taker in a global oil market Canadian crude oil is sold both domestically and in the US market at the world price Despite the fact that Canada is a major net exporter of crude oil, refineries in Atlantic Canada and central Canada continue to import crude from producers overseas This occurs because of the low cost of moving crude oil by ship, and the relatively high cost of pipelining crude oil across Canada Some of the crude imported is re-exported to the US in the form of refined petroleum products Canada consumes far less crude oil than it produces, and this situation is likely to continue into the foreseeable future. In 2009, Canada recorded a huge net surplus of more than 840 thousand barrels per day (kb/d). Nearly all crude oil exported from Canada was to the US market Source: NRCAN, Natural Resources Canada 83

84 Between 2000 and 2009, Canadian demand for crude oil ranged from 1.7 to 1.85 million barrels per day (mb/d). Canadian demand for crude oil peaked in 2007, at 1.85 mb/d Source: NRCAN, Natural Resources Canada 84

85 Canadian crude oil production for the 1995 to 2009 period is growing quickly Source: NRCAN, Natural Resources Canada 85

86 The August 2009 merger between Suncor Energy and Petro-Canada created Canada s largest energy company Source: NRCAN, Natural Resources Canada 86

87 Canada accounts for about 12% of the world s proved oil reserves, and 97% of Canadian reserves are in the form of oil sands Source: NRCAN, Natural Resources Canada 87

88 The East Coast offshore areas represent about 31% of conventional oil reserves. Canada s remaining proved conventional oil reserves are located in Ontario, the Mackenzie/Beaufort Area and the Mainland Territories Source: NRCAN, Natural Resources Canada 88

89 Canadian oil imports by source for 2008 and 2009 Source: NRCAN, Natural Resources Canada 89

90 The lower revenue figures are not a reflection of less product being exported, but of the lower price of Canadian crude oil in 2009 compared with 2008 Source: NRCAN, Natural Resources Canada 90

91 Natural Gas 91

92 The Canadian natural gas market is affected by market conditions in both Canada and the US The Canadian natural gas market is part of a continental market, and is affected by market conditions in both Canada and the US In this market, natural gas flows seamlessly across borders via extensive pipeline networks connecting supply basins to demand centers Regional prices, reflecting natural gas pipeline transportation costs, are established within this market Unlike crude oil, there is no global price for natural gas Source: NRCAN, Natural Resources Canada 92

93 Total North American demand for natural gas in 2009 was about 25.5 Tcf (trillion cubic feet) or about 70 Bcf/d (billion cubic feet per day) Source: NRCAN, Natural Resources Canada 93

94 US production increased 5% largely on account of surging shale gas production. Meanwhile, Canadian production declined 4% owing to the maturing Western Canada Sedimentary Basin (WCSB) Source: NRCAN, Natural Resources Canada 94

95 While there are hundreds of natural gas producers in Canada, the top ten control 52% of production Source: NRCAN, Natural Resources Canada 95

96 US reserves are higher than Canadian Natural Gas reserves. In 2008, Canada posted the largest net reserve addition in over 25 years Source: NRCAN, Natural Resources Canada 96

97 The decline in export volume was the direct result of falling Canadian natural gas production Source: NRCAN, Natural Resources Canada 97

98 Petroleum Products 98

99 Petroleum Products market Canadian petroleum product prices are essentially set in a global market For example, Canadian wholesale gasoline prices are driven by US benchmark prices, such as the New York Harbour price. These US benchmark prices reflect the international crude oil price and such factors as seasonal demand and inventory levels Canadian wholesale prices must remain competitive with these US benchmark prices This is because if Canadian refiners prices (for products) are lower, products will flow out of the country. If refiners prices are higher, marketers will import lower priced products The price of crude generally drives the prices of refined petroleum products. Despite this, crude oil and petroleum product prices can, at times, move in opposite directions Source: NRCAN, Natural Resources Canada 99

100 The demand for refined petroleum products in Canada fluctuates along with seasonal demand (e.g. increased demand for gasoline during the summer, more heating oil used in winter) Source: NRCAN, Natural Resources Canada 100

101 Canada has four distinct supply/demand regions for petroleum products: Atlantic Canada, Quebec, Ontario and Western Canada. At times, product imports, exports and interregional transfers play a significant role in balancing supply and demand Source: NRCAN, Natural Resources Canada 101

102 As both imports and exports have increased over the last decade, net exports remain relatively unchanged when compared to 2000 Source: NRCAN, Natural Resources Canada 102

103 Electric Power Generation, Transmission and Distribution 103

104 Quebec is the largest producer of electric power in Canada In 2007, coal accounted for 76% of all the fuels consumed to generate electricity in Canada and 35% of the cost of these fuels Conversely, natural gas accounted for 14% of all fuels consumed in 2007 but 48% of the cost of fuels used Alberta (45.2%), Ontario (26.1%), and Saskatchewan (14.3%) were the three largest users of fuels for the production of electricity in Canada in 2007 Overall, Alberta used 52% of all coal and 36% of all the natural gas consumed in Canada for the production of electricity, while Ontario consumed 24% and 34% respectively and Saskatchewan consumed 17% and 9% respectively In 2007, Quebec was again the largest producer of electric power in Canada generating 31.1% of all of Canada s electric power and 49.7% of all hydroelectric power. Quebec used only 2.0% of total fuels consumed for other forms of electricity production Electricity generated by wind increased again in 2007, up 19.5% 2,925 GW.h from 2,448 GW.h in This represents 0.5% of the total electricity generated in Canada in 2007, up from 0.4% in 2006 Source: NRCAN, Natural Resources Canada 104

105 Renewable Energy 105

106 Canada is a world leader in the production and use of energy from renewable resources Canada, with its large landmass and diversified geography, has substantial renewable resources that can be used to produce energy; these resources include moving water, biomass, and wind, solar, geothermal and ocean energy Canada is a world leader in the production and use of energy from renewable resources. Renewable energy sources currently provide about 16% of Canada's total primary energy supply Moving water is the most important renewable energy source in Canada, providing about 59 percent of Canada's electricity. In fact, Canada is the second largest producer of hydroelectricity in the world Biomass is the second most important renewable energy source in Canada. The primary types of bioenergy include electricity and industrial heat from wood waste, space heating from firewood, and biofuels from agricultural crops While they are emerging sources, wind and solar energy are experiencing high growth rates Source: NRCAN, Natural Resources Canada 106

107 Geomatics and Geoscience sector Introduction 107

108 Geomatics and Geoscience provide a detailed picture of the physical world ƒgeomatics and geoscience are complementary earth sciences that provide a detailed picture of the physical world and our place in it Geomatics consists of products, services and tools involved in the collection, integration and management of geographic data Geographic information can be retrieved from various sources, including earth-orbiting satellites, ground-based instruments and airborne and seaborne sensors. These data are transformed into digital maps and other usable forms with state-of-the-art information technology Geoscience includes geology, geophysics, geochemistry and geodesy. It deals with all aspects of the physical earth, including mineral and energy resources; hazards such as earthquakes, tsunamis, landslides and space weather phenomena; and geological controls on groundwater and climate Source: Canada Natural Resources:

109 It is used in forest management and energy and mineral exploration to environmental stewardship, emergency management and monitoring of Canada s territory Geographic information systems (GISs), global positioning systems (GPSs), remote sensing, location-based services and technologies, and Web-based services are growing rapidly, bringing modern geomatics tools to the computers and cell phones of the average citizen and small business Industry, governments and the public rely on geomatics and geoscience information and technologies for many purposes, ranging from forest management and energy and mineral exploration to environmental stewardship, emergency management and the monitoring of Canada s territory and borders Canada s resource-based economy depends on innovations in geoscience for the life cycle of resource exploration, development and rehabilitation. Modern geoscience has helped Canada become a leading producer of diamonds Source: Canada Natural Resources:

110 Geomatics and Geoscience sector Industry Performance 110

111 Canada continues to be a world leader in geoscience and geomatics applications and technology Canada is a world leader in the niche markets of remote sensing data and applications, including mapping from space, sea-floor mapping and hydrography Canada is recognized internationally for developing customized GIS applications for urban planning, agriculture, geo-marketing and natural resources management Major international markets for Canadian geomatics firms include North America, the Middle East and Latin America International demand for geomatics products and services will continue to increase, stimulating the growth of the industry in the coming years Canada continues to be a world leader in geoscience and geomatics applications and technology, principally in minerals and energy exploration and development Canada provides much of the information, expertise and technology used around the world for the responsible development of natural resources Source: Canada Natural Resources:

112 Emerging Trends 112

113 Emerging Trends in the Forest Industry Sector Industry transformation and a focus on innovation are leading to improvements that will strengthen the competitiveness of Canada s forest sector in all areas Market challenges have been faced head on, and new market opportunities are being targeted. Work is underway to identify both new products from fibre and new markets for Canada s traditional products Non-traditional products and services are the focus of intensive research and development. Of particular note are those products and services derived from forest biomass (for example, bioenergy, bioproducts and biochemicals). Increased production of bioproducts is expected to give the industry a significant boost in the highly competitive global marketplace The importance of environmental sustainability has been recognized across the forest sector by government, industry and other players. Sustainable forest management practices at every stage of production demonstrate responsible resource stewardship and respond to the expectations of the new green movement reality of today s global marketplace Source: NRCAN Natural Resources Canada 113

114 Emerging Trends in the Metals and Minerals Sector Looking ahead, the mining and mineral processing industries should be an important source of economic growth in Canada As a result of expected relatively stronger prices, mines are projected to open, re-open or expand production in Canada in 2010 Export Development Canada forecasted that Canada s exports of ores and metals should rise by 10% in 2010 According to a study by Informetrica, the mining and mineral processing industries are forecast to grow by 6.4% y/y over the period , which is double the expected growth rate of the total economy Source: NRCAN Natural Resources Canada 114

115 Canada s conventional crude oil production will decline over time, and oil sands production will progressively make up a larger share of production Source: Trendwatch Series,

116 All forecasts point to declining production of Natural Gas in the coming years but recovering over the long term Source: Trendwatch Series,

117 China has drawn on its large foreign currency reserves and cash to acquire stakes in Canadian-traded natural resource companies In April 2010, the state-owned enterprise China Petroleum & Chemical Corporation (more commonly known as Sinopec), one of the largest integrated energy and chemical companies in China, offered to acquire from ConocoPhillips Company its 9 per cent stake in Alberta oil sands producer, Syncrude Canada Ltd. for US$4.65 billion This followed PetroChina s August 2009 agreement to buy a 60 per cent stake in two oil sands properties held by Athabasca Oil Sands Corp. for $1.9 billion, and preceded the $817-million acquisition by China Investment Corp. (CIC) of a 45 per cent stake in an oil sands project held by Penn West Energy Trust, and a concurrent $435-million investment for a 5 per cent stake of Penn West CIC had already made its mark in the Canadian mining sector earlier this year when it acquired a 17 per cent interest in B-class shares of Teck Resources Limited for $1.74 billion Source: Trendwatch Series,

118 China has drawn on its large foreign currency reserves and cash to acquire stakes in Canadian-traded natural resource companies Other significant transactions include: The signing of a memorandum of understanding between TSX-listed Quadra Mining Ltd. and a subsidiary of State Grid Corporation of China, the largest Chinese utility company and a major end user of copper, to form a joint venture with respect to two of Quadra s properties which represent $900 million in assets The offer by Jinchuan Group Ltd., China s largest producer of nickel, cobalt and platinum, to acquire all common shares of Crowflight Minerals Inc., a Canadian junior nickel producer, for $150 million The successful joint takeover bid by China s Jilin Jien Nickel Industry Co., Ltd. and Goldbrook Ventures Inc. of the junior nickel explorer Canadian Royalties Inc. This was the first hostile takeover bid by a Chinese company in Canada Source: Trendwatch Series,