Between 1969 and 2019, Canadian parents received $499 billion in family allowance payments and children’s benefits from the federal government. That 50-year cost was matched almost exactly by $505 billion in revenues to governments from the oil and gas sector. That included everything from oil and natural gas royalties to corporate and personal income taxes (from those in the oil and gas sector) to property taxes, except that such taxpayer cash was collected over just 20 years, between 2000 and 2019.The roughly half-trillion dollars in taxes and royalties from oil and gas over the past two decades matched up with a similar amount paid out to families for child benefits over five decades is an inexact comparison. Money is fungible and there are plenty of other taxes that flow into government coffers. There are also multiple other items that Canada’s governments spend tax dollars on, from health care to highways and much else.The child benefit/oil and gas revenues comparison though helps provide a concrete comparison to those who know little about taxes and government spending, or perhaps even mistakenly think governments can spend, spend, spend with little regard for the strength of a major Canadian industry. That includes oil and natural gas exploration, extraction, refining, pipelines and exports.

To illustrate the critical importance of oil and gas revenues to governments—and thus to Canadians— another way, consider another comparison, this time to other major Canadian industries.

Real estate and construction are two relevant industries which are also major contributors to government coffers. Between 2000 and 2019, the real estate sector contributed just over $211 billion in taxes to governments across Canada, or about two-fifths of what oil and gas did.

The construction sector handed over $298 billion to federal, provincial and local governments over the same two decades, or about three-fifths of what those involved in the natural gas business and in the oil industry sent to Ottawa, the provincial capitals, and to local governments.

Add both the real estate and construction sectors together and that doubled-up figure itself (over $509 billion) barely tops the $505 billion in cash Canadian governments received from oil and gas companies and employees between 2000 and 2019 (the latest year for which data is available).

A few caveats on the comparisons. The $505 billion from oil and gas is just oil and gas taxes and royalties to local, provincial and federal governments but not including payments to First Nations. Also, we were unable to track personal income tax payments from oil and gas workers to provincial and federal governments between 2000 and 2006. In other words, even the half-trillion bonanza of revenue from the oil and gas sector is a conservative estimate.

Also, we are sometimes asked what the comparison is between oil and gas revenues and say, manufacturing revenues. Those comparisons are hard to come by (and calculate) because people mistakenly think manufacturing is, for example, all located in central Canada and attached to the aerospace and automotive sectors.

But in fact, “manufacturing” happens in many industries, not just when a company creates an auto from steel or when an airplane manufacturer creates a jet, but also when steel rigs are created to drill for oil and natural gas, or when pipes are fashioned to carry oil or gas to and from refineries and to trains and ships for transport. (In other words, we cannot compare “manufacturing” to the oil and gas sector because the oil and gas sector includes manufacturing and we’d double-count revenues by using them in both sectors.)

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GLJ

Caveats aside, here are some other statistics to keep in mind about the importance of oil and gas and the broader energy sector in Canada. The broad energy sector includes oil and gas extraction and support activities, and also utilities, coal, and pipeline transportation. Total energy revenues between 2000 and 2019 were $701 billion (including the $505 billion from oil and gas), or more than all the federal government spent on employment insurance between 1987 and 2019, at $685 billion.

Summing up, ponder about the how oil and gas revenues keep Canadian governments somewhat afloat. If Canada’s oil and gas sector disappeared tomorrow and governments were forced to find $505 billion in tax cash, governments might start pondering hikes in personal, business, payroll or sales taxes, or some combination. And they’d need to find $25 billion per year to replace oil and gas revenues.

Mark Milke and Lennie Kaplan are with the Canadian Energy Centre, an Alberta government corporation funded in part by carbon taxes. They are authors of the report $701 billion: The Energy Sector’s Revenues to Canadian Governments 2000 – 2019.