Income and Expenditure Accounts Technical Series
Provincial and territorial natural resource indicators, 2009 to 2016

Acknowledgements

This paper outlines the Provincial and Territorial Natural Resource Indicators (PTNRI) developed by Statistics Canada. The PTNRI provide measures of the economic importance of the natural resources sector across Canada in terms of output, nominal and real gross domestic product, imports, exports and employment, for the years 2009 to 2016.

The PTNRI along with the Natural Resources Satellite Account (NRSA) and the Natural Resources Indicators (NRI) were developed as part of a cost recovery project funded by Natural Resources Canada (NRCan).

We wish to acknowledge technical support from The National Economic Accounts Division’s (NEAD) Production and Information Management section as well as ongoing support from Natural Resources Canada (NRCan). Thanks also goes out to Mingyu Yu (NEAD) and Mladen Ostojic (NEAD) for their assistance in developing the PTNRI dataset and reviewing the final product.

Introduction

The Provincial and Territorial Natural Resources Indicators (PTNRI) provide an extension to the previously published Natural Resources Satellite Account (NRSA) and Natural Resources Indicators (NRI) by adding a provincial and territorial dimension to the account.

This account defines natural resource activities as products and services originating from naturally occurring assets used in economic activity. These assets comprise mineral and energy resources, water, as well as natural timber, aquatic, and other natural biological resources. They do not include intensively cultivated biological resources, such as agriculture. To provide a more complete measure of the economic importance of this sector, natural resource products and the services required in the initial extraction as well as the initial processing of the natural resource inputs are included.

Given the importance of various downstream natural resource activities to the Canadian economy, secondary and tertiary processing are also identified in the NRSA. The downstream activity is separable from the core natural resources sector for analytical purposes allowing the core activity to remain consistent with international definitions.

As an organizing framework, the satellite account presents information on natural resource activities by sub-sector (forest, mineral and mining, energy as well as hunting, fishing and water). The provincial and territorial accounts do not take into account the production of bioproducts that were introduced into the NRSA and NRI with the first quarter of 2018 release.

This publication presents annual provincial data on production, nominal and real gross domestic product (GDP), exports, imports and employment for 2009 to 2016. Production and GDP are shown at basic prices, imports and exports are shown at market prices and employment is shown as the number of jobs. Totals may not equal due to rounding.

The NRSA is built by product / activity rather than by industry. As such, non-natural resource activities that occur in a natural resource industry (for example: saws manufactured by a logging company or housing provided by an oil drilling company) are excluded. Conversely, natural resource activity that takes place outside of conventional natural resource industries (for example, the production of electricity by an automotive or textile manufacturer as part of their normal production process) are included.

Tables 1 and 2 show key indicators for the PTNRI and downstream activity for 2009 to 2016 while table 3 shows the natural resource / non-natural resource activity by industry for 2014.

Highlights

Natural resource production in the provinces and territories

The natural resources sector is an important part of the Canadian economic landscape, accounting for 10.1% of national GDP in 2016. In addition to playing a significant role in Canada’s economic growth, it also contributes to employment and investment. However, economic importance varies significantly between provinces and territories. In 2016, the natural resource sector represented over 25% of the economies of Newfoundland and Labrador and the Northwest Territories and over 20% of the economies of Nunavut, Saskatchewan and Alberta. It accounted for less than 10% in Prince Edward Island, Ontario, Nova Scotia, Manitoba, Quebec, New Brunswick and British Colombia.

Natural resource production by sub-sector

The composition of the natural resources sector also varies substantially by jurisdiction. The majority of the sector in Newfoundland and Labrador, Saskatchewan and Alberta was comprised of the energy sub-sector. This sub-sector^{Note 1} accounted for 20.0% of the Alberta economy, while accounting for 19.0% of the economy of Newfoundland and Labrador and 15.3% of the Saskatchewan economy. In Newfoundland, 5.8% of the economy was attributable to the mineral and mining sub-sector (mainly from metallic mineral extraction) while in Saskatchewan, this sub-sector made up 8.1% of the economy (mainly from the production of non-metallic minerals, such as potash).

Conversely, the territories were predominately focused on the mineral and mining sub-sector. In Yukon and Nunavut, metallic minerals extraction made up the bulk of the sub-sector while in the Northwest Territories the majority of the contribution came from non-metallic mineral mining (mostly diamonds).

The provinces of British Columbia, New Brunswick, Manitoba and Quebec were all less dependent on natural resource production, coming in slightly lower than the Canadian average of 10.1% of GDP. This ranged from a high of 10.0% in British Columbia to a low of 7.9% in Manitoba.

As a share of these four provinces’ gross domestic products, the energy sub-sector ranged from a high of 4.9% in Manitoba to a low of 3.7% in Quebec. The main contributor for these jurisdictions was the production of electricity. The GDP of the forest sub-sector was as large as 2.9% and 2.7% in New Brunswick and British Columbia, respectively, and as small as 0.2% in Manitoba. The mineral and mining sub-sector ranged from a high of 2.8% in Quebec where the extraction of metallic minerals (1.0%) and the production of metallic mineral products (1.0%) made up the bulk of the sub-sector, to a low of 0.5% in Nova Scotia.

Prince Edward Island, Ontario, and Nova Scotia were the jurisdictions least reliant on natural resources in 2016. For Prince Edward Island, natural resource production originated mostly from the production of electricity (1.3% of GDP) and from the hunting, fishing and water sub-sector (2.1% of GDP).

In Ontario, the production of electricity comprised 1.4% of GDP while natural resource services, such as natural gas distribution, pipeline transportation and services incidental to the production of electricity, and the production of refined petroleum products, such as fuels and lubricants, each made up 0.4% of the economy. The mineral and mining sub-sector made up 1.8% of the economy with 0.7% coming from the extraction of metallic minerals and 0.7% coming from the production of primary metallic and non-metallic products.

In Nova Scotia, natural gas extraction (0.8% of GDP), services related to energy (0.5% of GDP) and electricity production (1.3% of GDP) made up the bulk of the natural resources sector. The hunting, fishing and water sub-sector made up an additional 2.1% of the economy.

Downstream natural resource activity

Secondary and tertiary processing for the forest and the minerals and mining sub-sectors in 2016 ranged from a high of 2.1% of GDP in Ontario to 0.0% in the Northwest Territories and Nunavut.^{Note 2} The main jurisdictions involved in this downstream processing were Quebec and Ontario, which were both above the Canadian average.

Analysis by province and territory

Newfoundland and Labrador

Newfoundland and Labrador’s economy was the most dependent on natural resources out of all regions in Canada in 2016 (27.0% of nominal GDP). Production of oil and iron ore were the two main contributors to the sector. The natural resources share of the economy peaked in 2011 when it made up 44.1% of nominal GDP. This was mainly due to crude oil and metallic mineral production. Over the period of 2009 to 2016, nominal GDP in the natural resources sector in Newfoundland and Labrador has fluctuated between a low of $7.5 billion in 2015 and a high of $13.9 billion in 2011.

In 2016, the real GDP in the natural resources sector grew by 8.5% over 2015. Growth stemmed primarily from crude oil increasing 19.9%. Energy services also went up 14.0%, coinciding with the delivery of the primary module for the Hebron Oil platform.

Employment in the natural resources sector peaked in 2012 at 12,200 jobs (5.2% of total jobs). Energy employment slowly grew over subsequent years, peaking in 2014 before falling in 2015 and 2016 when oil prices declined. Mining employment peaked in 2011 and 2012 followed by a rapid decline in 2014 due to shutdowns at iron mines in Labrador.

Prince Edward Island

The natural resources sector in Prince Edward Island has the smallest impact on the economy of all provinces and territories in Canada, representing 3.8% of the total economy in nominal terms. GDP largely comes from two sources: the hunting, fishing and water sub-sector, which accounted for the largest share in 2016 at $123 million; and electricity generation, which accounted for $76 million that year.

During the period of analysis, employment peaked at 1,000 jobs (1.4% of total jobs) in 2014, with 400 jobs in the hunting, fishing and water sub-sector. The energy sub-sector was the other major contributor to employment, with 300 jobs in 2014.

Nova Scotia

In Nova Scotia, nominal natural resources GDP reached its high point in 2010, with a total of $2.6 billion. This represented a peak for both the energy sub-sector ($1.5 billion) and the forest sub-sector ($451 million).

In real terms, the energy sub-sector decreased significantly starting in 2011, contracting 41.6% between 2010 and 2016. Natural gas extraction fell 70.4% from 2010 to 2013. This was followed by the near elimination of refined petroleum product production in 2014, the first full year after the Dartmouth refinery ceased operations. The forest sub-sector also saw a steep decline after 2010, declining 46.7% between 2010 and 2012 following the closure of a number of pulp and paper mills. Real GDP for the hunting, fishing and water sub-sector has been growing steadily since 2009, increasing 53.6% through 2016.

Employment in the natural resources sector, which stood at 14,800 jobs in 2009 (3.2% of total jobs), declined to a low of 11,600 (2.5% of total jobs) in 2014 before partially recovering in the following two years. Employment in the energy sub-sector declined for the majority of the period from 2009 down to 2016. Forest sub-sector employment has also declined in the period. Employment in hunting, fishing and water has followed the upturn in GDP growth, reaching a high of 5,200 jobs in 2016.

New Brunswick

Nominal GDP of the natural resources sector in New Brunswick peaked in 2011 at a high of $3.6 billion and remained around that level in 2012 before declining to $3.0 billion by 2016.

A significant decrease in real GDP for the minerals and mining sub-sector occurred in 2013 and 2014, falling by 71.5% as metallic mineral mining production ceased with the closure of the Brunswick #12 lead-copper-zinc mine. There was also a steep decline in primary metallic mineral product manufacturing over those years that saw real GDP fall by 82.4%.

Despite the decline in GDP, employment reached a high of 21,300 jobs in 2015 (6.0% of total jobs), led by 9,700 jobs in the forest sub-sector. Fishing, hunting and water saw strong growth after 2010, going from roughly 2,000 jobs in 2009 to 3,100 jobs in 2016.

Quebec

In 2016, the natural resources sector, as measured by nominal GDP, represented 8.0% of the total economy of Quebec, below the national average of 10.1%. Downstream natural resources sector activity contributed 1.9% to the total economy in 2016. This was the second highest amongst the provinces.

Real natural resources GDP in Quebec grew slowly but consistently over the 2009 to 2016 period, averaging just over 1% growth. The energy sub-sector experienced no net growth over this time due to a 50.9% fall in refined petroleum products GDP in 2012, which cancelled out consistent but modest gains in electricity generation. The mining and minerals sub-sector saw steady growth averaging 2.4% per year, driven largely by a 62.4% increase in metallic mineral extraction over the period.

Employment in the natural resource sector reached its highest level at roughly 124,000 jobs (2.1% of total jobs) in 2011. After large employment swings from 2009 to 2013, a partial recovery of forest sub-sector employment in recent years has led to more stable employment, ranging between 122,000 and 123,000 jobs in the sector from 2014 to 2016. Quebec represents roughly 20% of total natural resources employment in Canada.

Ontario

Nominal GDP of the natural resources sector in Ontario peaked at $37.2 billion in 2014, the second largest amongst the provinces and territories of Canada. Despite this, natural resources represented only 5.5% of Ontario’s total GDP that year. Ontario has the second smallest share of GDP attributable to natural resources in Canada.

When measured in real terms, the natural resources sector grew 16.8% from 2009 to 2016 in Ontario, just below the national growth rate of 20.3%. Metal mining and the production of electricity are two of the main drivers of natural resources production in the province. Ontario had the highest level of downstream activity amongst the provinces at 2.1% in 2016.

Employment in the natural resources sector peaked in 2011 at roughly 141,000 jobs (2.2% of total jobs). Employment has generally been trending downward since then and stood at 134,000 in 2016. Employment in the energy sector declined by 13.8% from 2011 to 2016. Conversely, jobs in the mining sector were up 2.9% from 2011 to 2016, offsetting some of the declines in energy. In 2016, Ontario represented 21.1% of all natural resources jobs in Canada, behind only Alberta.

Manitoba

In 2016, 7.9% of the Manitoba economy was attributable to activity in the natural resources sector when measured in nominal terms. This was below the national average of 10.1%. The three largest contributors to the natural resources sector in the province were electricity, metallic mineral mining and energy sub-sector services.

Real natural resources GDP in Manitoba increased 16.6% from 2009 to 2016. However, the time period had two distinct periods. From 2009 to 2012, the sector grew each year by an average of 5.7%. After 2013 the sector saw a slight decline though 2016, by an average of -0.3%. The primary driver of growth from 2009 to 2012 came from crude oil extraction, which nearly doubled from 2009 to 2012.

Employment in the natural resources sector also peaked in 2012 at a total of 17,400 jobs (2.7% of total jobs). Employment fell 7.3% in 2014, as the energy sector lost 1,700 jobs. Employment hit its lowest point in the period during 2016, with losses in the energy, forest and mining and minerals sub-sectors.

Saskatchewan

In 2016, 23.3% of the Saskatchewan economy was attributable to activity in the natural resources sector, the fourth highest amongst provinces and territories when measured in nominal terms. Nominal GDP peaked in 2014 at $23.9 billion before dropping sharply in both 2015 (-$5.5 billion) and 2016 (-$1.9 billion) due to large decreases in the price of crude oil. Despite this, crude oil along with non-metallic minerals (potash) remain the two most important commodities in the natural resources sector in Saskatchewan.

Real natural resources GDP grew 23.1% from 2009 to 2015, before seeing a 2.3% decrease in 2016. Non-metallic mineral extraction was the largest single source of growth over the period, increasing 130.3% on the strength of potash. Notably, metallic mineral products grew 51.5% in 2015 due to increased uranium output, offsetting low or negative growth in other commodity groupings.

Employment in the natural resources sector hit its highest point in 2014 at 35,000 jobs (5.8% of total jobs), an increase of 36.2% since 2009. Growth occurred over those years in both the energy sub-sector (+5,200 jobs) and the minerals and mining sub-sector (+4,200 jobs).^{Note 3}

Alberta

In 2016, 21.8% of the Alberta economy originated from the natural resources sector in nominal terms. Although well above the national average, that share was down from 32.0% in 2014 before energy prices dropped. In nominal terms, natural resources GDP in Alberta hit its highest point in 2014, at $116.9 billion. The natural resources sector in Alberta is dominated by the energy sub-sector, which peaked at $111.4 billion in 2014. This sub-sector is comprised mostly of crude oil extraction ($60.1 billion in 2014), natural gas extraction ($16.1 billion) and energy services ($26.3 billion).

GDP in nominal terms provides a very different story than in real terms (volume of production) for Alberta. Nominal GDP in Alberta has tended to fluctuate with energy prices, showing substantially declines in 2009,^{Note 4} growth from 2010 to 2014 and then large declines following the most recent decline in crude oil prices.

In terms of real GDP, 2014 was also the highest point, 12.7% higher than 2013 and 31.8% above 2009. Despite small declines in 2015 (-1.7%) and 2016 (-1.6%), both years remained well above any year prior to 2014. Interestingly, the declines in real GDP were not from crude oil extraction, where existing refineries maintained their volume of production. The decline stemmed from a 16.3% drop in energy services in 2015. Services dropped a further 9.5% in 2016. These service include exploration and development.

Employment in the natural resources sector rose from 2009 to 2014, to a maximum of 201,000 jobs (8.6% of total jobs). Employment fell by 35,000 jobs between 2014 and 2016, mirroring the decline in prices in these two years.

British Columbia

The natural resources sector in British Columbia contributed 10.0% of total nominal GDP in 2016, just below the national average of 10.1%. The province’s natural resources sector was diversified with natural gas, electricity production, the forest sub-sector as well the minerals and mining sub-sector having similar shares.

Real GDP of the natural resources sector grew most years from 2009 to 2016, averaging 4.6% per year, with only 2012 seeing a decrease (-4.3%). Natural gas extraction had the largest impact on GDP changes in most years due to the volatility in its growth rate. In 2011 it grew 25.9%, while in 2012 it decreased 20.2%. The forest sub-sector grew in spurts from 2009 to 2016, with rapid growth in 2010, 2011 and 2014. Real natural resources GDP grew 7.4% in 2016. Natural gas led the increase, growing by 15.6%. The other major contributor was primary non-metallic mineral products, which increased 75.7% in 2016, the first full year of operation for the refurbished Kitimat aluminum smelter.

Employment in the natural resources sector in British Columbia peaked in 2015 at 89,000 jobs (1.1% of total jobs) with strong job number across all sub-sectors. This was a 9.7% increase from 2009. The mining sub-sector was the main contributor to this growth. Employment fell 2.9% in 2016 as mining jobs declined that year.

Yukon

The Yukon economy had a higher share (13.0%) of its economy originating from the natural resource sector than the national average, when measured in nominal terms. However, this share was the lowest of the three territories.

Most natural resources GDP in Yukon comes out of the minerals and mining sub-sector, with metallic mineral mining contributing between 55% and 70%, and mining services contributing a further 12% to 25%. Nominal GDP has ranged from a high of $381 million in 2014 to a low of $231 million in 2015 following the shutdown of Wolverine mine.

There was a 52.3% increase in real terms in 2016 as copper and gold both saw large gains.

Employment has been volatile over the period of analysis. There were 830 natural resources jobs in 2009, increasing every year through 2012 to 1,620 jobs, then declining to 1,290 jobs in 2016.

Northwest Territories

Over one-quarter of total economic activity in the Northwest Territories in 2016 was attributable to the natural resources sector, when measured in nominal terms. This was second to only Newfoundland and Labrador amongst the provinces and territories.

Nominal natural resources GDP in the Northwest Territories reached its highest point in 2010 at $1.9 billion. Non-metallic mineral products were the primary driver of GDP in the territory, followed by crude oil. Non-metallic mineral products (diamonds) peaked at $1.4 billion in 2010, while crude oil hit $291 million in 2010, and has had a downward trend since then reaching its lowest point in 2016 at $140 million.

In terms of real GDP, 2010 also represented its peak, declining in 2011 and 2012. The decline came largely from diamonds, with non-metallic mineral products declining 20.7% and 33.5% in 2011 and 2012 before rebounding from 2013 to 2016.

Employment grew 62.7% from 2009 to 2016. There were 2,100 jobs in 2009, increasing most years before reaching 4,300 jobs (13.8% of total jobs) in 2015. There was loss of 880 jobs (-20.3%) in 2016, some as a result of the closure of Snap Lake mine in late 2015.

Nunavut

About 24% of economic activity in Nunavut came from the natural resources sector in 2016, when measured in nominal terms. Nominal GDP peaked at $584 million in 2016.

Real natural resources GDP in Nunavut experienced a large increase in 2010, and has steadily grown since then, growing 294.9% between 2009 and 2016. Since the opening of the Meadowbank gold mine in 2010, metallic mineral mining has been the primary component of GDP in the territory, going from nothing to $186 million in nominal terms in 2010. In real terms, it has grown a further 55.1% from 2010 through 2016.

Employment in the natural resources sector in Nunavut grew steadily from 2009 through 2015. There were 470 jobs in the sector in 2009, and reached 1,730 jobs (10.4% of total jobs) by 2015. Employment grew by 340 jobs (+23.9%) between 2014 and 2015, the year Baffinland Iron Mines’ Mary River mine opened, before decreasing by 210 jobs in 2016 (-12.3%).

Appendices

Appendix A: Data tables

Table 1 Natural resources sector (main indicators)

Table 1.1 Natural resources sector (main indicators), Output

Table 1.2 Natural resources sector (main indicators), Gross domestic product

Table 1.3 Natural resources sector (main indicators), Real gross domestic product

Table 1.4 Natural resources sector (main indicators), Exports

Table 1.5 Natural resources sector (main indicators), Imports

Table 1.6 Natural resources sector (main indicators), Employment

Table 2 Downstream natural resources sector (main indicators)

Table 3 Natural resources gross domestic product by sub-sector and industry

Other extraction in the energy sub-sector is not included in the total as it is already included in both the mineral and mining (uranium and coal) and the forest (fuel wood) sub-sectors. See tables 4 and 5 for a detailed list of products in the natural resources and downstream sectors and table 6 for a detailed list of natural resource industries.

Appendix B: Satellite accounts

One of the strengths of the System of National Accounts lies within its flexibility. While the system lays out the concepts, accounts and accounting rigour required to produce a set of integrated and internally consistent set of accounts, it does afford the compiler the flexibility to vary and, in a sense, expand the framework to address a specific need. At the limit, this expansion is referred to as satellite accounting. There are essentially two types of satellite accounts that can be produced. One type of satellite account involves a rearrangement of the classifications or data (e.g., more detailed alternative aggregations) and possible addition of complementary information of the existing core accounts. These satellite accounts do not change the underlying concepts of the core System of National Accounts but provide an expanded perspective on a particular sector, group of products or activity.^{Note 5}  The second type of satellite account seeks to expand or supplement the underlying concepts of the core System of National Accounts to study a topic of social interest. This could involve, for example, expanding the concept of production (e.g., including volunteer activities as production), consumption or capital formation. The NRSA falls into the first category, where concepts are consistent with the core CSNA, but additional detail and presentational changes are used to better identify and articulate the natural resource sector.

The development of the NRSA involves extracting detail related to natural resource activities from the core set of published CSNA data. The account follows the main principles, classifications and definitions of the core CSNA, ensuring it is directly comparable with the rest of the CSNA. From this account, therefore, it is possible to calculate a gross domestic product for the natural resource sector comparable to total gross domestic product—providing a measure of the sector’s contribution to total economic activity. By using the same principles as those in the CSNA, the satellite account leverages an internationally accepted statistical framework and infrastructure. Examples of other macroeconomic aggregates directly comparable to the core framework include international exports and imports, gross fixed capital formation (investment), domestic demand and employment.

In addition to comparability and efficiency, the use of the CSNA infrastructure also provides a number of other advantages. A large array of data is already available at Statistics Canada to construct standard macroeconomic accounts and can be used as the starting point in the construction of the NRSA. The data has already gone through data quality validation and have been further integrated, reconciled and balanced in the process of producing the CSNA. This ensures that the data underlying the satellite account is equivalent in quality to Canada’s core macroeconomic accounts.

The NRSA also provides a clear organizing framework for analysis of the natural resources sector. It clearly defines the natural resource sector and thereby presents a consistent set of numbers rather than a variety of estimates based on inconsistent concepts. The account goes beyond an industry perspective of the natural resources sector, rather using natural resource activities as its main organizing structure. As a result, the NRSA will eliminate industry production un-related to natural resources and add in natural resource production which takes place in industries which aren’t traditionally defined as natural resources (such as the production of refined precious metals in the miscellaneous manufacturing industry and the production of fuel wood in the agricultural crop industry).

Appendix C: Key definitions and concepts

Natural resources satellite account definition

The NRSA defines ‘natural resource activities’ as those which result in goods and services originating from naturally occurring assets used in economic activity. These assets comprise mineral and energy resources, water, as well as natural timber, aquatic, and other natural biological resources, and may be renewable or non-renewable. As per international standards, they do not include intensively cultivated biological resources such as agricultural crops.^{Note 6} To provide a more complete measure of the economic importance of the natural resource products, the services required in the extraction as well as the initial processing of natural resource inputs will be included. The activities related to the production of natural resource products constitute the scope of production for the natural resource satellite account.

In essence, the above definition splits the scope of natural resource activity into three processes: the extraction of the natural resource inputs, the services required to undertake this extraction (such as transportation, distribution and scientific services), and the initial processing of the resulting natural resource products.

The NRSA further breaks the sector down into 4 sub-sectors, namely:

• the energy sub-sector;
• the forest sub-sector;
• the mineral and mining sub-sector; and
• the hunting, fishing and water sub-sector.

Natural resource products

Using the above definition, the economic activities defined as natural resource-related can be mapped out. This can be done from both a product and industry perspective. For products, the starting point is the SUT product classification, as these tables contain all the goods and services produced in the Canadian economy. The product classification structure is based on the North American Product Classification System (NAPCS).

Extractive natural resource products

From a product perspective, given the criteria to exclude intensely cultivated biological resources, agricultural products such as crop or livestock production would not be included in the account, nor would aquaculture products (fish farms), fur farming or tree farms.^{Note 7} Commercial fishing from the ocean or inland lakes would be included, as would products from hunting and trapping, as well as goods produced from forestry and mining. The extraction of energy from natural resources (such as water, wind, solar, crude oil, and gas) would also be included. These products would constitute the natural inputs (extraction) portion of the account (see table 4).

Natural resource service products

As part of the process of extracting natural resource inputs, some service products are required that would not be produced in the economy without the extraction activity. As a result, they are included in the sector to provide a more complete picture of the size of the natural resource activity in the economy. Services related to the extraction or discovery and development of natural resources are included in this category, as well as any transportation of the natural resource product to the location of processing. As such, mineral exploration as well as pipeline transportation would be included as service products in this category. The transportation services provided in the forest and mining sub-sector for the delivery of goods to the initial processing location (e.g., trucking and rail) should also be included as natural resource activity, but data for this service is not separately available at this time (see table 4). As data becomes available, this category will be included.  Services related to research and development as well as legal, scientific and technical services are included, as are all other services which are required to create the product.  Housing and accommodation services are excluded as they would exist regardless of the existence of the sector.

Initial processing products (primary manufacturing)

Similar to the case of natural resource service products, the initial processing of the natural resource inputs, for the most part, would not be found in the economy without their initial extraction.^{Note 8} As a result, the initial processing of natural resources is a clear extension of the extraction industry and is therefore included within the natural resources sector. These products are often classified as manufactured goods within the SUT framework since the processes physically transform inputs. As a practical implementation rule, manufacturing activity will only be included in the natural resources sector if over 50% of the material inputs into the production process are natural resource inputs.^{Note 9}

Initially, natural resources inputs such as logs and crude oil are identified. Secondly, each industry within the SUT framework is examined to determine if it meets the 50% criteria in its production process; these could be thought of as the “main” natural resource industries, although natural resource activity could also take place in other industries. As a final step, all products made primarily in these industries are deemed to be natural resource products. The NRSA captures the production of these products regardless of whether they take place in the main natural resource industries or outside of them (see table 6 for a list of specific natural resource industries).^{Note 10}

This definition results in the inclusion of manufacturing activities such as sawmills and the refining of ores and oil in the NRSA. Further downstream processes using the refined products, for example, wood furniture and manufactured metal products, are not in scope for the core NRSA, but are presented in a supplementary “downstream” table (see tables 1 and 2).

Downstream activities (secondary and tertiary production)

Although not part of the core account, natural resources have important downstream effects on other sectors. These products fall outside of the definition of the natural resources sector but are nonetheless important in understanding the role of natural resources in the Canadian economy. They include such items as iron pipes, copper and aluminum tubing, cutlery and wood and kitchen cabinets. Measurements have been made for these activities which are presented in a ’downstream’ supplement to the NRSA account. In general, secondary production uses a large portion of primary manufactured products as inputs. These secondary products are then used in the production processes of tertiary. The economic contribution of these products are calculated at the request of NRCan. These products, however, are not part of Statistics Canada’s main natural resources calculations.

Natural resource industries

Within the industry classifications of the SUT, there is no single industry that comprises all natural resources activities, rather, the economic activity attributable to natural resources is found in many industries. For the purposes of the satellite account, natural resource industries can be defined as those in which more than half of total output originates from the production of primary natural resource inputs. It also includes industries in which at least half of the material inputs in the production process are natural resource inputs. For example, the forest industry chiefly produces SUPC commodity MPG113001 – Logs, a natural resource commodity and therefore is a natural resources industry. The main products from these industries are then considered natural resource products.  Downstream industries are those in which 50% of material inputs are either primary or secondary manufactured products.

It is important to note that only activity within an industry attributable to natural resource product production is included in the NRSA. Therefore, if the forest industry produces both logs and provides housing for its employees, only the natural resource activity (production of logs) will be included.

Further, some non-natural resources industries may produce natural resource products. This economic activity is also included in the account. For example, an agriculture chemical manufacturer may produce some electricity internally as part of their primary production process. Although the manufacturer’s total output would not be included in the energy sub-sector, its production of electricity would. Another example concerns the production of refined precious metals in the ’other miscellaneous manufacturing’ industry; this production would be included in the mineral and mining sector. Other output from this industry, such as sporting and athletic goods will be excluded. An example of this, using electricity GDP, is presented in table 7.

In this way, the NRSA goes beyond a simple industry perspective of natural resources and seeks to accurately identify natural resource activities within the Canadian economy. 

Natural resource sub-sectors

The natural resources sector will be split into four distinct sub-sectors: forest, energy, minerals and mining, and hunting, fishing and water. SNA and NRSA concepts will be applied consistently across the four sub-sectors, with the aggregation forming the total natural resources sector. The sub-sectors are each a cross-section of products and industries. For example, the forest sub-sector includes the natural inputs, services and processing products related to forestry, this activity occurring across several Input-Output Industry Classifications (IOIC) industries.

One complication of the sector presentation is that in some cases products and industries may be classified to more than one sub-sector. The three chief examples in the NRSA are Coal and Uranium Mining, which are included in the Energy and Mining sub-sectors, as well as the extraction of fuel wood, in both the Energy and Forest sub-sectors. Under Statistics Canada’s SUT classification systems, fuel wood is considered an energy product which is primarily produced within forest industries. Similarly, coal and uranium are considered energy products produced in mining industries. For the purposes of aggregation, each of these products will be assigned to sub-sectors based on their industry classification. That is to say, fuel wood will primarily be considered part of the Forest sub-sector and coal and uranium will be primarily considered part of the Mineral and Mining Sub-sector. In order to accommodate the cross-cutting nature of these activities, the tables in the NRSA present the energy sub-sector both with and without these specific products.

Appendix D: Methodology

A full methodology on creating the annual NRSA estimates can be found as part of the “Income and Expenditure Accounts Technical Series” published by Statistics Canada.

The provincial and territorial estimates are derived using the same methodology as the annual estimates while adding a provincial dimension to the data. Provincial breakdowns are obtained from a variety of sources and methods, including but not limited to; the provincial Supply-Use tables, NRCan estimates for mining, provincial real and nominal GDP estimates, provincial survey data for energy, data from the survey of employment payroll and hours (SEPH), employment estimates from the productivity measures program as well as internal supply-use balancing methods.

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