One claim I often see from people online is that the NDP destroyed the oil and gas sector in Alberta while they were in power. It’s a lot of rhetoric, and I figured that I would take a look at several metrics to measure the accuracy of this claim.’
First, let’s look at the number of oil and gas businesses operating under the NDP.
Statistics Canada has a monthly dataset of active businesses; unfortunately, it goes back to only July 2015, which means we can’t compare the NDP data to the PCs.
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That being said, here we go:
While we can’t see what the numbers were like for the mining, quarrying, and oil and gas extraction sector prior to the NDP gaining power, what we can see is that the province went from 4,290 active businesses in July 2015—just 2 months after the provincial election—to 3,524 active businesses in April 2019, their last month in power.
That’s a loss of 766 active businesses.
To be fair, that number continued to fall after the 2019 provincial election, when the NDP lost the reins, and even the UCP Job Creation Tax Cut wasn’t enough to stem the bleed before low oil prices and the pandemic further decimated the number of active businesses in the sector.
Next, let’s look at capital investments.
Earlier this year, Statistics Canada published business investment data, spanning a 15-year period between January 2006 and January 2021. The investment data covers capital and repair expenditures on non-residential tangible assets, such as inventory, vehicles, equipment, and buildings.
This graph clearly shows that capital investments in Alberta’s oil and gas sector plummeted during the time that the NDP were in power.
Granted, even at their lowest level, capital investments in the fossil fuel sector never bottomed out like they did in 2009 under the PCs or in 2020 under the UCP.
It’s probably no coincidence that each time capital investment fell dramatically, Alberta was in a recession, regardless of whether it was under the PCs, NDP, or UCP.
So if the number of oil and gas businesses, as well as capital investment in the oil and gas sector, fell under the NDP, then surely oil and gas production also declined under the NDP, right?
Alberta has been tracking oil production since January 2007. Here’s what oil production looks like in Alberta every January since 2007.
What we see is not that oil and gas production paralleled business numbers and capital investment; rather we see that oil production didn’t suffer at all under the Alberta NDP. During their administration, oil production increased 15%. In fact, oil production increased every year the NDP were in power, ranging from a low of 1.46% in 2017 to a high of 7.7% in 2016.
Actually, the only time there was a drop in oil production was back in January 2010, under the Progressive Conservatives, when production fell by 4.3%.
Okay, so Alberta was producing more oil, but was it getting it to market? Well, according to the Canada Energy Regulator, here are Alberta’s exports since 2016.
The first 3 lines were entirely during the NDP administration. The first 4 months of 2019 were under the NDP, as well.
Not only were the NDP exporting oil but they were exporting it in increasing amounts. In fact, exports increased by more than 11% in 2018, despite production increasing by only 2.5% that year.
In the NDP’s last two years, exports increased by 80,000 m3 a day. That works out to be 29.2 million m3 more oil being exported from Alberta as the NDP’s term drew to a close.
Unfortunately, CER’s data doesn’t go any earlier than 2016, so it’s difficult to compare exports under the PC government or even the NDP’s first year.
Next, let’s look at GDP in the oil and gas sector.
According to Statistics Canada data, GDP at basic prices (in 2012 dollars) for the oil and gas extraction sector actually increased under the NDP, just as production and exports had.
Under the NDP, GDP for oil and gas extraction went from $63.81 billion at the end of 2014 to $80.14 billion at the end of 2018. That’s a 25.6% increase.
During their 4 years in office, the NDP saw GDP for oil and gas extraction increase by $16.3 billion. In the 4 years prior to their being elected, it had increased by $12.8 billion.
By comparison, GDP for this sector grew 1.3% during the UCP’s first year and fell by 6.4% in their second, for a total net loss of $4.9 billion.
On a related note, oil and gas extraction GDP as a proportion of total GDP skyrocketed during the NDP administration.
Under the PCs, oil and gas extraction made up 20% or more of the province’s total GDP only once, at least since 2006. Under the NDP, it was above 20% every single year, and even increased each year, jumping from 18.86% at the end of 2014 to 23.95% four years later.
That proportion has continued to increase under the UCP, but just barely, increasing just 0.1 points their first year and 0.42 points their second.
By comparison, the smallest increase under the NDP was 0.66 points, and 2.18 points was the largest.
Finally, let’s look at jobs, specially jobs in the “forestry, fishing, mining, quarrying, oil and gas” sector.
No matter how you look at it, oil and gas jobs tanked under the NDP, reaching their lowest level ever during this 15-year period.
Oil and gas jobs under the NDP fell to a low of 124,000 in July 2016. They had reached a high of 181,200 in May 2012, and even in May 2014, a year before the NDP took office, oil and gas jobs were at 173,100.
Now in all fairness to the NDP, that 50,000 drop wasn’t all on them. By the time they took office at the beginning of May 2015, jobs were already in freefall. They had gone from 177,400 in April 2014 to 158,500 in April 2015.
Before the NDP had even won the 2015 provincial election, nearly 20,000 oil and gas jobs had already disappeared, triggered by low oil prices and a recession, and there was no way the new government could turn the tides immediately.
In fact, it was a little over a year after the NDP were elected when the job losses finally came to a halt. Over the next two years, jobs in the sector kept rising, finally reaching a high of 153,300. By the summer of 2018, about 85% of the oil and gas jobs lost in the first 14 months of the NDP’s administration had come back.
After that, there was a slight drop in jobs between then and April 2019, when the party lost to the UCP. And that drop kept going, fuelled by low oil prices once again, right up until the pandemic. By February 2020, the month before the government implemented pandemic restrictions, oil and gas jobs sat at 131,300, its lowest level in 3 years.
So, did the NDP actually destroy Alberta’s oil and gas sector?
Well, despite seeing less in capital investments and fewer oil and gas companies during the NDP’s administration, Alberta’s oil and gas sector pulled more oil out of the ground than it did under the PCs. They also exported more under the NDP. And their GDP increased, particularly as a share of total GDP. And while oil and gas jobs dropped under the NDP, they’d been dropping for months prior to the NDP coming in, and they managed to bring back about 85% of them over the next two years.
And that’s not even counting flip flopping on royalty rates, or advocating for Line 3 and Trans Mountain pipeline expansions, or opposing the federal oil tanker ban.
So, it might be a bit misleading to say that they destroyed the industry. If anything, they were quite friendly to the industry.