Oil Change: The Potential Impact of High and Low Prices on Canada’s Economy

The Conference Board of Canada, November 14, 2016
Recorded Webinar by
(You must be signed in and entitled to rate this report)

Changes in oil prices have significant implications for Canada’s economy. But, because the Canadian economy is not uniform in its structure across provinces, provinces, sectors and industries face differing impacts in different ways.

In this webinar, learn how future oil price movements can impact Canada’s economic and fiscal performance, based on three scenarios of West Texas Intermediate (WTI) prices from 2016 to 2025:

  • The “reference” or most likely scenario—This scenario is consistent with the Conference Board’s prevailing view of the global economy where crude prices begin to rebound from their current low levels in 2016 and gradually improve over the next 10 years.
  • A “high price” scenario—The Canadian dollar price for WTI is expected to surpass $100 per barrel by 2021 in this scenario. Price growth will slow after that, but prices will remain persistently above $110 per barrel in 2022 and beyond. Under this scenario, the economics of developing high-cost projects would be favourable.
  • A “low price” scenario—The Canadian dollar price for WTI would bottom out at $35 per barrel in 2017 under this scenario before they gradually recover in 2018. The near-term prices in this scenario are sufficiently low that almost no new projects or basins in Canada would be economical.

Join Michael Burt for insights and analysis on an economic factor that affects the prosperity prospects for every Canadian.

Webinar Highlights

During this webinar, Michael Burt will describe the oil price scenarios developed for this and their implications:

  • Implications for Canada — In the high-price scenario, a surge in oil-related investment increases the productive capacity of the Canadian economy. The low-price scenario however, sees four consecutive years of recession in Alberta and several years of weak economic growth for Canada as a whole.
  • Implications for provinces — The employment, GDP, and fiscal impacts of oil price movements in Alberta are considerably larger than for the rest of the provinces combined. Manufacturing sectors in Ontario and Quebec benefit from higher prices and resulting oil investment, but both provinces are better off when oil prices (and therefore the Canadian dollar) are lower.
  • Implications for sectors— In the high-price scenario, the largest beneficiaries are the oil sector itself and the oilfield services industry, followed by construction, financial services, professional services, and retail trade. On net, manufacturing benefits from lower oil prices, as do transportation and wholesale trade.

About Michael

Photo of Michael BurtAs Director, Industrial Economic Trends, Michael Burt oversees regular forecasts for more than 30 different sectors of the Canadian economy. Michael joined The Conference Board of Canada in 2004. In addition to contributing to the development of the Industrial Outlook forecast model, Michael has introduced new industry-specific products and conducted commissioned analysis. Michael has a Master's degree in Economics from the University of Toronto, and has also completed the Chartered Financial Analyst program.

COVID-19: Get all the insights

Access Webinar

(you will be asked to sign-in)

To see if you are entitled to get this research for free, take a minute and create a free e-Library account. This will let us determine if someone else at your organization has already purchased access to this material.

Browse by...
Need Help?