An Alberta First Nation will harness the sun to power oil sands operations in a new deal that its chief says marks “an innovative path for economic reconciliation.”

The Cold Lake First Nations (CLFN) have long supplied contract services to Cenovus’ nearby oil sands projects. The solar deal, alongside Vancouver-based developer Elemental Energy Inc., expands that work in a new direction Chief Roger Marten says supports sustainable energy development while realizing long-term economic benefits.

“This has come directly from community members who are supportive and passionate about renewable energy,” Marten says.

“We hope this is just the first project as we plan to develop, invest in and construct several projects in the coming years.”

Located about 300 kilometres northeast of Edmonton, CLFN has about 3,000 members, with over 1,300 living on reserve. Their traditional lands are crossed by the 1-million-hectare Cold Lake Air Weapons Range, a training ground for fighter jets from 4 Wing Cold Lake – the busiest fighter base in Canada.

The range also houses oil sands development, including Cenovus’ Foster Creek project, the first commercial project using steam assisted gravity drainage (SAGD) technology.

“Since the creation of the Air Weapons Range in 1952, much of our traditional territory had been lost and re-configured. Naturally, we strive to protect our people, our environment and our way of life through the continuance of education and awareness,” CLFN describes on its community website.

Today, the Nation operates a primary school on reserve, daycare and community health centre. Many members uphold traditional ways of living. Activities such as hunting, fishing, berry picking, collecting medicines and camping on the land are all honoured traditions.

Renewable energy is part of CLFN’s economic development plan and is expected to provide meaningful employment for community members and contracting opportunities for nation businesses. Multiple oil sands projects close by provide the opportunity for CLFN to generate economic benefits while helping reduce the industry’s environmental impacts.

Cenovus was receptive to the solar power deal when approached by CLFN members, Marten says.

Now, Cenovus will be the sole customer of a new 150-megawatt solar project in southern Alberta owned by CLFN and Elemental Energy. Elemental owns two operating solar farms in the province, with 52 megawatts of combined generation capacity.

The new project, enabled by the deal with Cenovus, is expected to start operating and producing electricity in 2023.

“As stewards of the land, our nation fully supports sustainable, renewable energy development respecting environmental, economic, cultural and social contexts, while realizing long-term economic benefits through an ownership stake in the project,” Marten says.

Using solar power is expected to reduce the greenhouse gas emissions intensity of Cenovus oil sands production, which the company decreased by about 30 per cent between 2004 and 2019. Along with partners Canadian Natural Resources, Imperial Oil, MEG Energy and Suncor Energy, Cenovus has the goal to reach net zero GHG emissions by 2050.

The unaltered reproduction of this content is free of charge with attribution to Canadian Energy Centre Ltd.

Canada’s oil and gas industry continues to increase spending to reduce its environmental footprint and improve cost competitiveness.

Major companies spent a record $1.6 billion on research and development in 2019 – or the equivalent of about $43 for every Canadian – according to the latest ranking by Research Infosource.

That’s an increase of about $400 million compared to the previous record, which was set in 2018.

“It continues to go up, and we’re not surprised because of the level of effort that these companies are putting into trying to find solutions to some of the environmental issues that they’re facing, and also to lower their costs,” says Jared Dziuba, analyst with BMO Capital Markets specializing in environmental, social and governance (ESG) issues.

“It’s positive in terms of the trend, and the progress we’ll probably see in terms of the performance numbers.”

In the oil sands, increased R&D spending has helped producers reduce greenhouse gas emissions intensity, freshwater use intensity and land footprint, as well as started reductions in tailings accumulations.

Oil sands GHG intensity is likely much lower than previously thought, according to a December 2020 study by researchers from the University of Calgary, Stanford University, and the University of Toronto.

They found oil sands upstream emissions intensity to be up to 35 per cent lower than previous studies, when they used Alberta-specific data for natural gas inputs rather than the US data that was previously modeled.

Emerging technologies like solvent-based production processes can reduce emissions intensity by a further 14 to 19 per cent, the researchers found.

Oil sands projects have demonstrated a trend of GHG emission intensity improvements over time as more efficient facilities have grown output and newer, less intensive forms of extraction have come online. In 2018, analysts with IHS Markit found that more efficient and newer forms of oil sands production had life cycle GHG emissions that are below the US average.

2019 R&D

In 2019, oil and gas sector R&D was second only to spending by software/computer services companies ($3.3 billion) and pharmaceuticals/biotechnology ($1.8 billion).

Suncor Energy ranked number two in Canada overall, with $830 million in technology spending compared to auto parts manufacturer Magna International’s $849 million.

Suncor’s investment – an increase of about $200 million from 2018 – supported work including solvent-based oil sands processes designed to significantly reduce water use and GHGs, as well as efforts to reduce downstream emissions, implement digitalization strategies like drones and remote sensing, and investment in cleantech accelerators like Evok Innovations.

Canadian Natural Resources came in at number two in the oil and gas sector, with $473 million in R&D in 2019 (up from $265 million in 2018). That investment supported projects including the company’s in-pit extraction pilot, which could enable oil sands mining production without fluid tailings and reduce GHG emissions by 40 per cent.

Dziuba expects the increased spending trend to continue, although there’s likely to be a dip reported for 2020 because of the COVID-19 pandemic.

“There are a number of these companies that just have a steady state amount of R&D capital that goes into the business. Imperial oil, for example, has a long history of spending between $100 million and $200 million every year, regardless of what’s going on,” he says.

“I think the trend in R&D spending for the sector, which has averaged roughly $1.1 billion and led the global industry over the past decade, is likely to continue over the medium and longer-term, especially as oil prices recover.”

Some of Jordan Jolicoeur’s fondest memories growing up were spent in the family truck, traveling from site to site with his brother and father in the early days of what today is known as Carvel Electric.

“I would jump off the bus and get right into the truck with the family and we would dream big of what our family business could be,” says Jolicoeur.

The 31-year-old is president of Métis-owned Carvel Electric, based in Stony Plain, Alberta, which has grown from a small family business into a team of 14 that now works for major corporate clients such as CP Rail, Suncor Energy, and Trans Mountain.

“We have been working on the Trans Mountain pipeline facilities since 2016, which has allowed us to source work with the expansion project that is currently under construction,” he says.

Carvel is working on the Trans Mountain project in Alberta from Edmonton to Jasper and has won two contracts to work on the Acheson and Enoch Cree pipe stockpile sites.

“We had 100 per cent Indigenous work teams performing this work that brought security systems and lighting to these pipeyards,” says Jolicoeur, adding Carvel’s partnership with Trans Mountain illustrates the company’s commitment to working with Indigenous businesses.

“They (Trans Mountain) don’t just say they are committed to working with Indigenous companies, they act on that in a way that is very meaningful.”

Carvel’s work with Trans Mountain marks the company’s first foray into the energy sector, a transition that was helped along by the company’s experience working as a preferred vendor for CN and CP Rail.

“What I experienced through being able to go to work with these companies as an Indigenous company was something I wanted other Indigenous people to experience as my quality of life has vastly changed,” says Jolicoeur.

“Of the fourteen on the Carvel team, twelve are Indigenous,” says Jolicoeur. “We have team members who are members of the Métis Nation of Alberta, Cold Lake First Nation, Blood Tribe, Paul First Nation, and Peavine Métis Settlement.”

“Carvel is about creating opportunities for Indigenous people to better their lives, which is why when we were building the business our first apprentice that we ever hired was a man from Paul First Nation,” says Jolicoeur

Jolicouer, who in 2018 was named National Aboriginal Youth Entrepreneur of the Year by the Canadian Council for Aboriginal Business, says he’s proud to be a successful Métis business owner and is happy to see growing interest in the Indigenous group’s unique history and culture.

“There is a broad resurgence of Métis pride across Canada, which was instilled in me from my father. He (Jolicoeur’s father) is a Michif speaker (Métis Language) and proud jigger (Métis dance) who has always held an incredible amount of pride for Métis culture,” he says.

The Métis are an Indigenous cultural group of people unique to Canada that grew out of European and Indigenous contact.

Jolicoeur acknowledges that the Métis have sometimes in the past been scared to be who they are, but there was a pivotal moment for him that started changing that narrative.

“Some of the best hockey I’ve ever played in my life was at Native Provincials growing up, and that was the start of something amazing.”

Jolicoeur says that seeing Indigenous hockey players at such an elite level was an empowering moment of proving to himself that Indigenous doesn’t mean “less than” anything.

That sentiment is built into the DNA of Carvel, which built a focused hiring strategy that has resulted in the large majority of his team being Indigenous, all of whom operate at a high level of performance.

Using that philosophy as a core value has helped Carvel Electric make inroads for Indigenous business across Alberta, and the company was recently honored with a 2020 “Alberta Business Award of Distinction” for its history of incorporating intercultural relations and Indigenous values and culture into its operations.

During the early days of the COVID-19 pandemic, Jolicouer says Carvel was hit hard by stop-work orders issued by major companies but was still able to find opportunities to keep its workers busy while other companies had no choice but to furlough employees, or even fold altogether.

“It was a challenging first three months, but we have an amazing relationship with another company who was able to use our team to work on some of their projects that weren’t shut down,” he says.

It’s been three years since TC Energy cancelled the Energy East pipeline project, but for a small company incorporated in Quebec, the vision of connecting Western Canadian oil to consumers in the east and new markets offshore is still very much alive.

The four people who comprise Canadian Prosperity Pipelines Corporation are working to raise seed capital to fund the next steps for a cross-Canada oil transportation project, but it’s nothing like Energy East, says CEO Doug MacLellan. And he says their concept, called CP3, has even more merit today in the context of COVID-19.

“This project helps us in a time when I think Canada is in real trouble economically and you need projects across Canada that employ people but also provide opportunity and prosperity,” MacLellan says.

According to the company, “CP3 is vastly different [from Energy East] in its approach, routes, environment and empowerment … The only similarity is that it will ship oil from Alberta to New Brunswick.”

MacLellan is following the vision of company founder Duane Lauritsen, who died of a heart attack in November 2019. Lauritsen’s aim was for the CP3 project “to create true Canadian Indigenous empowerment, energy security and independence for Canada, and prosperity for all Canadians.”

The 4,800-kilometre, 1.1-million barrel per day CP3 project has an estimated capital cost of $24 billion, including marine terminal facilities. The company plans to develop it as a public-private partnership where risks and rewards are shared with a government agency.

Undertaking the project would be a monumental task, but evidence continues to show that the idea carries weight.

A September 2020 poll by the Montreal Economic Institute found that 71 per cent of Quebecers would prefer to import oil from Western Canada than from other countries, an increase of six per cent compared to responses to the same question in 2019.

In a striking move this July, Irving Oil chartered a tanker to deliver oil produced by Cenovus Energy in Alberta to its refinery in New Brunswick. The ship’s month-long voyage started at the Trans Mountain export terminal in Burnaby, B.C. and required transit through the Panama Canal, a journey of 11,900 kilometres, more than double the length of the proposed pipeline project.

“This is a one-off shipment for now, but we think there’s tremendous potential for more oil from Western Canada to make its way east, expanding our customer base here at home,” Cenovus vice-president Keith Chiasson said at the time.

Canadian, foreign markets

The goal of the CP3 project is to both replace foreign oil imported into Eastern Canada and to help Canadian oil access new world markets. MacLellan acknowledges that refineries on the other side of the country may have to be reconfigured to handle heavy crude from Alberta, but he says having the pipeline in place would help encourage those activities.

Absent a cross-country oil pipeline, Canada spent $477 billion on foreign oil imports between 1988 and 2019, according to Canadian Energy Centre research. This is an average of 749,000 barrels per day from countries including Saudi Arabia, Russia and the U.S.

“If you have that line there, then you have the potential for [companies] to modify the refineries and then we have energy security,” he says. “Whatever is excess that we can’t disperse of in Canada, we would sell to Europe and foreign markets.”

Analysis of international markets past 2060 shows “penetrable market share” for Canadian oil through the CP3 project, the company says. This includes a 2019 forecast by the U.S. Energy Information Administration that Canadian oil production will surge between 2040 and 2050 “as easily accessible global resources are increasingly depleted and global oil prices gradually increase.”

Indigenous engagement

MacLellan says a key aspect to ensure success of the CP3 project is its approach to Indigenous engagement, which he believes will help the company navigate the complex new federal regulatory framework for major infrastructure projects.

“We believe that certainly in this time and age, a project of this size can’t get approved if it’s not got Indigenous partnership. We want Indigenous partnership in decision making, but we also want to deliver prosperity to Indigenous peoples,” he says.

“What we’re going to do is take a percentage of our revenue and put it in a trust fund to be managed for Indigenous peoples wherever they are in Canada, not how close they are to the pipeline route.”

Corridor of opportunity

The pipeline corridor for the CP3 project is envisioned as a “collective opportunity zone.”

“We’re trying to create opportunities along the pipeline where we can do something innovative that creates a business opportunity for somebody else,” MacLellan says.

Some of the company’s ideas include offtake points along the route for business opportunities like producing asphalt or carbon fibre; using potential waste heat from pump stations to power locally-owned greenhouses; and running fibre optic cable alongside the pipeline to connect isolated communities.

The next step for CP3 is to raise $25 million to fund higher-level engineering, routing and consultations with affected Indigenous groups and leaders.

Lucy Smith has a bright outlook for the future. The 2019 high school grad currently works in marketing and social media in Calgary and has applied to attend college in Victoria, B.C., with hopes to commence in the winter 2021 semester.

Today the 19-year-old is outgoing and ready to embrace challenge and change, but admits that just a few years ago this was not the case.

Struggling with chronic pain, fatigue and mental health stress, Smith says it was difficult to meet the expectations of attending a regular high school. A move into a flexible program offered by the Calgary Board of Education was next, but that was also challenging. Smith stopped attending classes in person and moved to working online, at risk of the path of dropping out.

That’s when, thanks to a nomination by Discovering Choices staff, Smith got involved in a unique program offered by the Calgary Youth Justice Society (CfYJS) called In the Lead.

The program was co-founded in 2010 with major oil sands producer Cenovus Energy. It’s based on a concept CYJS calls “strong not wrong,” which recognizes that the same traits that can be seen as weakness in youth can be flipped to be used as strengths.

“I think it made me a lot more outgoing. It’s taught me a lot about myself, about the definition of leadership and how that can change from person to person,” says Smith, who identifies as non-binary.

“In the last few years I’ve grown so much and moved forward farther than I thought I’d be able to, and I know that I didn’t do it alone.”

CYJS was established in 1998 to provide a community-based alternative to court for young people involved in the justice system. But not all vulnerable youth are involved in the criminal justice system, which is why CYJS executive director Denise Blair saw the need and opportunity to create In the Lead.

Volunteer coaching

The program is offered to students in semester-long engagements where successful completion can earn them three high school credits. Each cohort is a peer group of 6 to 10 people who do course work together and are each matched with an adult coach volunteer.

Smith’s coach for two semesters was Lisa Howells, who leads Cenovus Energy’s meetings and events teams. In addition to in-classroom time with the cohort group, she would meet up casually with Smith for movies or brunch and generally text and keep in contact.

“It was really cool meeting Lisa. I don’t think I’d ever had, just like an adult that I could talk to like a friend at the time,” Smith says.

Howells, 37, says she was blown away by Smith and the youth she has met through In the Lead over the three semesters she has acted as a coach.

“I would say being a part of that program and specifically with Lucy, it totally changed my outlook, and I would say Lucy totally changed my life,” she says. “I mean, they just brought so much joy and excitement and I just feel better for being in the program and for knowing my young leader.”

More than 400 Cenovus employees have participated as volunteer coaches with In the Lead since 2010, when the company co-founded the program with Blair and CYJS. This August Cenovus was recognized nationally for this work as business leader for the prairies region in Canada’s Volunteer Awards.

The award recognized the impact of the company’s overall volunteer program, including its long-standing involvement with In the Lead.

In addition to employees volunteering on work time, the company has invested over $2 million in the program over the last decade to develop, launch, deliver and scale the program.

Cenovus senior community programs advisor Megan Marshall says In the Lead fits with the company’s overall approach to community investment, which is “to be both invested and involved.”

Oil and gas volunteering and giving back

Cenovus is not alone as a Canadian oil and gas producer giving back in big ways and seeking opportunities to create new programs to help communities.

According to BMO Capital Markets, oil sands producers alone have injected more than $80 million per year on average since 2012 in support of community resilience programs, education/skills development, as well as Indigenous and youth engagement.

Oil sands heavyweight Suncor Energy says that part of its community investment strategy is to “co-create innovative solutions” for shared challenges and opportunities.

Community investment and volunteering is also important to smaller Canadian oil and gas producers.

In 2019 employees of mid-sized Seven Generations Energy volunteered more than 10,000 hours in communities where the company operates. Seven Generations and its partners have also raised more than $3 million over the last seven years to support health care and education for people in northwest Alberta and northeast B.C.

Sean Prosser flies home every week from Alberta’s oil sands just so he can hop into another plane, volunteering his time to help patients in the East Kootenay region of B.C. get to Kelowna for medical appointments.

Born in the East Midlands region of England, Prosser moved to Canada in 1976, his father looking for opportunities in Alberta’s rich resource sector. The second oldest of four boys, Prosser and his family would later move to southeastern B.C., carving out a new home and a new life.

As he grew up, Prosser spent years chasing resource-based employment in B.C., finally returning to the home he knew best in Kimberley, B.C. to raise his young family while working in the local pulp mill. And that’s when he began hearing about the lucrative opportunities available in Alberta’s oil sands for workers willing to make the airborne commute.

“I talked to a guy from Cenovus who was able to give me a good understanding of what entices a person to fly 800 kilometres from where they live and be away for a week at a time,” says Prosser, a field manager at Cenovus’ Christina Lake oil sands operation, about 120 kilometres southeast of Fort McMurray.

“It took some time but I finally started to get my head around it.”

In 2012 he made the leap, joining thousands of other inter-provincial workers who work in Alberta but return home to live, spend money, raise families and volunteer in their own communities.

According to research by the Canadian Energy Centre, Alberta had nearly 100,000 workers from other provinces in 2016, which, based on percentage of population, marked the highest contingent of migrating labourers in Canada at 2.3 per cent.

Between 2002 and 2016, inter-provincial employees earned $57.4 billion, some of which ultimately returned to the local economies in which those workers reside.

“What I appreciate most is I can live my life in the area where I choose to live, but also contribute to the community,” says Prosser, who four years ago learned to fly and has since volunteered his skills with Angel Flight East Kootenay, flying people lacking access to reliable transportation to Kelowna for specialist appointments and surgeries.

“When I’m home I’m spending my money in the community and I’m 100 per cent separated from work.”

Some 6,000 kilometres to the east in The Goulds, a rural neighbourhood in St. John’s Nfld., Andrew Ivany is enjoying a summer at home on “the Rock” before his inevitable return to Alberta in the winter, an annual migration that began nearly 25 years ago.

“I moved to Edmonton right out of high school back in 1996 because it was good, reliable work,” says the 42-year-old jack of all trades who has worked in the oil patch and construction for most of his adult life.

“It’s meant a lot to me. Alberta has provided nothing but open arms for me and opportunity. Newfoundlanders love Alberta – what’s not to love?”

Ivany says the common colloquialism that Fort McMurray is the second biggest city in Newfoundland is not far off the mark, and he knows that when he arrives there will always be a strong contingent of fellow Newfoundlanders with whom to swap tales from back home.

Canadian Energy Centre research found that the majority of inter-provincial employees in Alberta hail from B.C. (37 per cent) and the Atlantic provinces (20 per cent). Ontario and Saskatchewan each account for 17 per cent of inter-provincial employees in Alberta.

Like Prosser, Tim Lanteigne works as a field manager at the Christina Lake facility but maintains a home in the picturesque Shuswap region of B.C.

After a career in the pulp and paper industry, Lanteigne, 53, found his slice of paradise in Blind Bay on the southwest end of Lake Shuswap, just north of Salmon Arm. A lover of outdoor recreation, his lakeside home allows him the opportunity to enjoy water sports, cycling, golfing and “lots of fishing,” while earning a solid wage working in the oil sands.

“This is where I chose to live,” Lanteigne says.

“I feel so fortunate to be able to live in an area that has everything I enjoy doing.”

And when Lanteigne arrives in Alberta, he’s welcomed by workers from all parts of Canada, all benefiting from employment in the energy sector and like him, exporting that prosperity back to their home communities.

“It’s a really small world and you see that all the time when you’re working,” Lanteigne says.

“There’s a small contingent from Kelowna, we have folks from Newfoundland, New Brunswick, Nova Scotia. Lots of folks from Saskatchewan.

“And then we go home. We shop local, and buy everything we need – services, new vehicles, upgrading houses. I know that the local businesses and the communities really appreciate it.”

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The wealth of oil and gas workers: Interprovincial employees in Alberta’s oil and gas industry and their contribution to the Canadian economy

Over the past two decades, Alberta has been a magnet for job seekers across Canada, even during downturns in the provincial economy, according to an analysis by the Canadian Energy Centre.

This has resulted in increased labour income and broader economic activity as employees earn income in Alberta but send and bring money back to their home provinces, including paying income and other taxes.

Highlights from the Fact Sheet include:

• As of 2016, Alberta had the highest proportion of interprovincial employees of any province, at 2.3 per cent The number of interprovincial employees in Alberta grew by nearly 57 per cent between 2002 and 2016, compared to 18 per cent in Ontario.
• The largest proportion of interprovincial employees in Alberta in 2016 were from British Columbia (37 per cent), followed by Atlantic Canada (20 per cent), Saskatchewan (17 per cent) and Ontario (17 per cent).
• The number of interprovincial employees working in Alberta’s oil and gas sector grew by more than 156 per cent between 2002 and 2016. In 2016 there were a total of 12,645 interprovincial employees working in the oil and gas extraction and support activities in Alberta.
• In 2016, interprovincial employees in Alberta’s oil and gas sector earned an average income of $77,091, which is among the highest of all industries.
• Income earned by interprovincial employees in Alberta’s oil and gas sector grew nearly 455 per cent between 2002 and 2016. Cumulative income of these employees filing income tax returns in other provinces but based in Alberta during that time period amounted to more than $12.1 billion.

Overview: Interprovincial employees and their home-province benefits

The expansion of Canada’s oil and gas sector over the past two decades and the spin-off effects it has on broader economic activity have made Alberta a magnet for job seekers across Canada. The result is increased labour income for many Canadians. This is meaningful because such job seekers earn income in Alberta but send and bring money back to their home provinces, where they also pay income and other taxes. This has been the case even during downturns in the Alberta economy.

Understanding IPEs

The oil and gas sector employs Canadians from across the country, many who use their income to benefit the economies of the provinces in which they permanently reside. One such group of employees are Canadians who commute to work in Alberta but maintain their primary residence elsewhere, known as interprovincial employees (IPEs). Individuals are identified as IPEs if they receive T4 earnings or income in a province (such as Alberta) during a given year, but report that they reside in another province on their T1 tax returns.

This Fact Sheet (which can be downloaded here as a pdf) examines the contribution of IPEs in Alberta’s oil and gas sector to other provinces. To do so, we examine IPE trends between 2002 and 2016 (the earliest and latest years for which data is available) using time series data from the Statistics Canada Canadian Employer-Employee Dynamics Database (CEEDD). The time lag is due to the multiple years of historical tax filer data required to accurately identify IPEs.

Alberta is a prime destination for IPEs

The total number of IPEs in Alberta increased from 61,395 in 2002 to 146,530 in 2014, before falling back to 96,215 in 2016, likely the result of the decline in energy prices and activity.

However, even with the energy price decline, the number of IPEs working in Alberta still grew by nearly 57 per cent between 2002 and 2016. In contrast, the growth in IPEs in Ontario was 18 per cent. Of note, the growth of IPEs in two other major oil and gas provinces, Saskatchewan and Newfoundland & Labrador, amounted to 54 per cent and 85 per cent respectively.

Over the period surveyed, Ontario has consistently had the most inter-provincial employees residing in-province (see Figure 1a), with 124,130 in 2002 and 147,090 in 2016. The large absolute numbers are to be expected given Ontario has the largest population among the provinces.

IPEs as a percentage of the total population

To gain a clearer understanding of how critical IPEs are to provinces outside Alberta, we have calculated IPEs as a percentage of each province’s population. In most years, IPEs in Alberta constituted a higher proportion of the total population than IPEs in other provinces.

• In 2014, the percentage of the Alberta workforce that declared another province as home was 3.6 per cent, compared with 1.1 per cent in British Columbia, 1 per cent in Ontario and 0.6 per cent in Quebec.
• In 2016, the proportion of Alberta employees who declared another province as their home declined to 2.3 per cent, but that was still significantly higher than other highly populated provinces such as British Columbia (1.1 per  cent), Ontario (1.1 per cent) and Quebec (0.7 per cent) and also higher than all other provinces.

Source: Derived from Statistics Canada, Canadian Employer-Employee Dynamics Database.

Source: Derived from Statistics Canada, Canadian Employer-Employee Dynamics Database.

Where Alberta’s IPEs come from

While IPEs come to Alberta from across Canada, the primary sources in 2016 were B.C. (37 per cent), Atlantic Canada (20 per cent), Saskatchewan (17 per cent) and Ontario (17 per cent).

Source: Derived from Statistics Canada, Canadian Employer-Employee Dynamics Database.

The Alberta money flow in 2016: $4.4 billion earned by IPEs

Income¹ earned by IPEs in Alberta increased from $1.2 billion in 2002 to $7.6 billion in 2014 before falling back to $4.4 billion in 2016. Even with the energy price decline, income earned by IPEs in Alberta grew by nearly 267 per cent between 2002 and 2016 (see figure 3).

1. In constant 2016 dollars.

Source: Derived from Statistics Canada, Canadian Employer-Employee Dynamics Database.

Some of the earnings from IPEs go back to the local economies in which these employees permanently reside in the form of consumption of goods and services, and ultimately federal and provincial taxes. Of the nearly $4.4 billion earned by IPEs in Alberta during 2016:

• Nearly 41 per cent was earned by B.C. residents;
• 22 per cent by residents of the Atlantic provinces;
• 16 per cent by residents of Saskatchewan;
• 15 per cent by residents of Ontario; and
• 6 per cent in the other provinces and the territories.

The Alberta money flow 2002 to 2016: Over $57 billion to IPEs, with British Columbians being the biggest beneficiaries

In total, IPEs residing in Alberta earned $57.4 billion between 2002 and 2016, an average of over $3.8 billion per year. Of this total, $19.5 billion or 34 per cent was earned by B.C. residents, $14.6 billion or 25 per cent by Atlantic residents, $8.3 billion of 15 per cent by Ontario residents, and even $1.9 billion or 3 per cent by Quebec residents. Another $13 billion or 23 per cent flowed to IPEs who reside in the other provinces and the territories.

Source: Derived from Statistics Canada, Canadian Employer-Employee Dynamics Database.

Source: Derived from Statistics Canada, Canadian Employer-Employee Dynamics Database.

Oil and gas sector employment income for IPEs: Over $12 billion

IPE employment in the oil and gas extraction and support activities sector in Alberta grew from 4,935 in 2002 to 19,980 in 2014, before falling back to 12,645 in 2016. Even so, the number of IPEs working in Alberta’s oil and gas sector increased by over 156 per cent between 2002 and 2016.

As the number of IPEs employed in Alberta’s oil and gas sector has grown, so has the total income earned by those employed in the sector in Alberta.

• Between 2002 and 2016, income grew from $175.8 million to over $1.5 billion in 2014, before falling back to $975 million in 2016.
• Even so, the income earned by oil and gas sector IPEs grew by nearly 455 per cent between 2002 and 2016.
• In fact, between 2002 to 2016 inclusive, IPEs in Alberta employed in oil and gas earned over $12.1 billion in cumulative income.

The importance of the oil and gas sector to the income earned by IPEs cannot be overstated. Employment in the oil and gas sector for IPEs in Alberta is financially rewarding. In 2016, IPEs employed in the oil and gas sector in Alberta earned an average income of $77,091. This is among the highest of all industries in which IPEs are employed in the province including professional, scientific and technical services ($50,176) and utilities ($76,970).

While IPEs working in the oil and gas sector comprised about 13 per cent of total IPEs in Alberta, their income comprised over 22 per cent of total income earned by IPEs in the province during 2016 (see figure 5).

This further reflects the fact that oil and gas is a high-paying industry for all Canadians, including IPEs. It is important to note that the average earnings reported are not the total individual annual income earned by IPEs, just the amount that was earned while working in Alberta.

Source: Derived from Statistics Canada, Canadian Employer-Employee Dynamics Database.

Oil and gas sector income for Alberta’s interprovincial employees: Second only to construction sector

The income earned by IPEs in Alberta in the oil and gas sector was $12.1 billion, second only to construction at $19.8 billion, between 2002 and 2016 in total. Of note, the oil and gas sector in Alberta has significant spin-off effects on the construction sector, particularly as it relates to construction of oil sands projects.

Source: Derived from Statistics Canada, Canadian Employer-Employee Dynamics Database.

Takeaway

Clearly, IPEs from across Canada have been attracted to Alberta due to the prospects for high-paying jobs in the oil and gas sector.

• The number of IPEs in Alberta increased by nearly 57 per cent between 2002 and 2016, while the growth in IPEs in Ontario was just 18 per cent in comparison.
• In 2016, the proportion of Alberta employees classified as IPEs was 2.3 per cent, significantly higher than other highly populated provinces such as British Columbia (1.1 per cent), Ontario (1.1 per cent) and Quebec (0.7 per cent), and higher than all other provinces.
• IPE employment in the oil and gas extraction and support activities sector in Alberta increased by over 156 per cent between 2002 and 2016.
• As the number of IPEs employed in Alberta’s oil and gas sector has grown, so has their total income earned. Income earned by oil and gas sector IPEs in Alberta grew by nearly 455 per cent between 2002 and 2016.
• Overall, from 2002 to 2016, IPEs in Alberta employed in oil and gas earned over $12.1 billion in cumulative income.

The decision by IPEs to travel to Alberta for work in the oil and gas sector is another example of the economic benefits that Canada’s oil and gas sector brings to all Canadians, regardless of province of residence.

Notes:

Terms and definitions used in this report related to employment and incomes can be accessed through Statistics Canada. This CEC Fact Sheet was compiled by Lennie Kaplan and Mark Milke at the Canadian Energy Centre: www.canadianenergycentre.ca. The authors and the Canadian Energy Centre would like to thank and acknowledge the assistance of Philip Cross in reviewing the data and research for this Fact Sheet. Image credits: ‘Workers sitting in locker room” by Hybrid Images on Getty Images.

Sources: (All links live as of August 11, 2020)

Government of Alberta (2017), Demographic Spotlight Interprovincial Employees in Alberta: Industrial Profile by Major Region of Origin <https://bit.ly/33OJE5Z>; Government of Canada (2015), Interprovincial Employment in Canada, 2002 to 2011 <https://bit.ly/3ioW8Fs>; MDPI (2020), Dependence on Interprovincial Migrant Labour in Atlantic Canadian Communities: The Role of the Alberta Economy <https://bit.ly/33PnmRv>; Statistics Canada (2020), Canadian Employer-Employee Dynamics Database <https://bit.ly/2DC8kUG>.

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Research and data from the Canadian Energy Centre (CEC) is available for public usage under creative commons copyright terms with attribution to the CEC. Attribution and specific restrictions on usage including non-commercial use only and no changes to material should follow guidelines enunciated by Creative Commons here: Attribution-NonCommercial-NoDerivs CC BY-NC-ND.

If there’s one lesson that has been more important in Prince Azom’s life than any other, it’s probably one of the earliest pieces of advice he received from his parents.

“When I was growing up in Nigeria, we lived in poverty and my parents always drummed into us that education is important and doing well in school is the surest pathway out of poverty,” he recalls. “I always kept that in mind. I took school very seriously, and I’m glad I did because they were right.”

Azom’s path has been a winding one, guided by his strong academic performance and the opportunities provided by the oil and gas industry. Today he is one the world’s few experts in solvent technology in the oil sands, a key technology being developed to reduce water use and greenhouse gas emissions.

As a youth in Nigeria, Azom’s affinity for math, chemistry and physics led him to university in the financial capital Lagos where he completed a degree in chemical engineering. That led to internship opportunities with global energy giants with operations in Nigeria, and encouragement from mentors to pursue graduate studies overseas.

“I never expected to leave Nigeria, but some of my professors who had studied in North America saw potential in me and pushed me to see beyond the horizon,” he says.

Azom won scholarships to study petroleum engineering at the University of Texas at Austin, where he earned a Master’s degree and a PhD. From there came job offers in Canada’s oil patch, where his expertise in reservoir engineering was highly valued.

“One of my professors in Texas had come from the University of Calgary and he thought I would be an excellent fit for the industry and that I would like Canada very much,” Azom explains. “I trusted him, and although I heard the winters in Canada were very cold, that did not trump all the good things I heard about Canada – the excellent health care and education system, how beautiful it was, how friendly the people were – so I decided to emigrate.”

In 2013, Azom moved to Calgary with his wife and two-year-old son. He spent two years with Conoco Phillips working on the development of new technology that uses chemical solvents to enhance the steam-assisted gravity drainage (SAGD) method of producing crude oil from oil sands deposits that are too far underground to be recovered by surface mining. He continues this work today with Cenovus Energy, where he is a senior reservoir engineer in the Technology Development group that is finding ways of producing oil using less water and heat, and with lower greenhouse gas emissions.

“I am now one of the few solvent technology experts in the world, which is an opportunity I could not have had anywhere else,” Azom says. “My experience in Canada so far has been amazing. The innovation system here is the best in the world, and the collaboration between companies to improve and reduce the environmental impact of the entire industry doesn’t exist anywhere else that I have seen.”

As part of Canada’s natural resource sector, the oil and gas industry provides significant opportunities for new Canadians to build successful careers and achieve prosperity for their families. The most recent data available from Statistics Canada shows that more than 28,000 landed immigrants were employed in quarrying, mining and oil and gas extraction in 2019 – a number that has mostly grown over the past 15 years. And average weekly earnings for landed immigrants in the resource sector are 71 per cent higher than the average across all industries in Canada.

Fellow Cenovus employee Nima Safaian agrees that Canada is rich with opportunities for newcomers, although his personal journey has been much different than Azom’s. Safaian moved to Toronto from Iran when he was a teenager, after his parents decided to leave their successful dental practice behind in hopes of living in a country with greater personal freedom, cultural diversity and options for their children.

“We came to Canada because a lot of our extended family was already here, so it was pretty easy to fit in and become part of a country that values diversity and lives in relative harmony with the rest of the world,” he says.

After finishing high school, Safaian completed degrees in engineering physics and nuclear engineering at McMaster University, followed by an MBA at York University. He gained experience in engineering and risk management working the electricity sector in Ontario, before deciding to move west to seek career opportunities in the energy industry and to indulge his passion for skiing, mountain biking and other outdoor pursuits. He worked as a risk specialist for BP, followed by more than three years in Scotiabank’s global risk management department, before starting with Cenovus where he is the head of market analytics.

“You go where the opportunities are, and I found that oil and gas is a very broad and innovative industry, which makes it very interesting and is a less rigid environment than other industries,” he says.

While he came to Canada at a relatively young age, and is now a Canadian citizen, Safaian believes a immigrants have some different challenges than native Canadians in order to be successful.

“As an immigrant, when you are starting your career you realize that you don’t have the same network of connections through your family and friends as people who were born here, which is important when you are trying to find the right opportunities,” he explains. “But the silver lining is that it makes you work harder and maybe hustle a bit more, which pays off in the long run.”

Prince Azom, who is now a permanent resident of Canada, has similar advice for other immigrants who are building new lives here:

“My experience in Canada has been amazing. It is a beautiful country and I am proud to call it home and thankful to be able to raise my family here,” says Azom who now has two sons aged five and eight.

“I say to all new immigrants: Come and pursue your dreams. Canada celebrates what makes you unique. If you are willing to work hard and be a good person, you will be successful in Canada.”

It’s fair to say Toronto’s Didi Horn has a sky high view of the future.

The former fighter pilot and drone operator has always had a keen eye for the horizon, which helped crystalize his vision for SkyX, a proprietary unmanned aircraft system purpose-built for monitoring over long distances, making it a natural fit for inspecting sprawling arrays of pipeline infrastructure.

The founder and CEO of the Toronto-based tech company couldn’t have known four years ago when he launched SkyX that it could become a critical cog for oil and gas companies emerging from the COVID-19 pandemic and looking for ways of minimizing risk to personnel while streamlining operations.

But it’s a challenge he says SkyX is ready for.

“I think SkyX is built, to be honest, for what we’re seeing right now and that’s the movement or transition of manned forces to unmanned systems,” Horn says.

“In January, 2019 we basically launched the product as a full solution to customers. It was fascinating to see that despite the fact we are considered small or tiny on the scale of oil and gas companies, we’ve been approached by the big whales. And six months into the year, we’ve already signed our first contract, seven figures, with our first customer.”

In April, SkyX announced a partnership with TC Energy to monitor a pipeline and its right-of-way in the Greater Toronto Area, scanning for debris discarded along the line, nearby construction activity and excavation that could damage the infrastructure, a level of vigilance made even more critical by its proximity to densely populated communities.

The company’s first VTOL (vertical take-off and landing) aircraft, SkyOne, has a range of over 100 kilometres, but its ability to extend its monitoring missions is boosted by remote x-Stations, which recharge the aerial units while running diagnostics, allowing it to continue its mission over hundreds or even thousands of kilometres.

The COVID crisis has prompted oil and gas companies to examine all aspects of their operations, while doubling down on technological innovations that were already in the works.

TC Energy was one of the first industry giants to begin the technological transition, announcing in 2017 that it was working with Amazon Web Services to host its information infrastructure. Last month, the company said it would migrate 100 per cent of its data to the online cloud, positioning it to continue operations as normal during the COVID-19 crisis, with employees able to worth remotely while maintaining security.

Other industry leaders have also recognized the value of digital transition, with companies like Cenovus and Suncor also striking deals with tech giants like Amazon, Microsoft  and IBM to transition their information infrastructure to the cloud. Imperial Oil also recently entered into a two-year agreement with the Alberta Machine Intelligence Institute to develop capabilities for a range of artificial intelligence projects.

“Our early steps have been encouraging. We’ve recently begun work in a variety of areas using robotics, artificial intelligence, and remote sensing technology. In fact, last year, we invested $635 million in technology development and deployment, including digital transformation,” Suncor president and CEO Mark Little said at the company’s AGM in May.

“Our journey into the digital world will only accelerate.  As we step further into this space, we’re cognizant that it’s not just about shiny new technology. It’s really about our people, our culture and our leadership. And how we can get our organization to work together to fully leverage technology to improve our performance. Let me be clear. Technology and innovation are part of our DNA. I have no doubt that with the ingenuity, creativity, and energy of our people, we will continue to lead.”

Geoffrey Cann, a consultant and speaker specializing in digital transformation for the oil and gas industry says there is a challenge facing some companies that may not have the corporate will to make a seismic technological shift.

But the sweeping impact of the COVID-19 pandemic across all operations has the potential to serve as a catalyst to force energy companies to modernize, or possibly be left behind.

“What they need to do is step back and say ‘let’s reimagine this industry,’” Cann says.

“There seems to be a rising awareness that a business model that’s pushing people into close contact with one another is not optimal. COVID has also taught the industry that people don’t need to work in an office in downtown Calgary.

“The pandemic, in my view, absolutely showed executives that some of their long-standing views no longer hold.”

Cann says while the list of potential technological innovations that could improve oil and gas companies are myriad, some of the key areas for them to consider are robotics, automation, virtual team collaboration tools, virtual training, online shopping and procurement, and, of course, remote monitoring.

And it’s in that ecosystem of remote monitoring and digital transformation where SkyX’s Horn sees significant growth potential as more companies realize the benefit not only to their bottom lines, but to their operations as well.

Beyond just having eyes in the skies to replace humans who have to physically walk the line to detect any issues, SkyX software will be able to interpret and analyze the data it collects, reducing the need for an employee to dig through reems of aerial photographs in search of anomalies.

“We are taking this information and turning it into actionable pieces of data,” Horn says.

“Now the big asset of SkyX is after a while that we’re deployed, we’d be able to provide what we call predictive analytics, meaning not only can I tell you right now what’s going on with your pipeline, but after a couple of months I’ll be able to tell you ‘look, this section is more prone to problems, or this section is prone to have more leaks over the springtime.”

In 2018, SkyX unveiled its next generation UAV, SkyTwo, at the Farnborough International Airshow in the United Kingdom, which will be able to carry heavier payloads and fly up to 170 kilometres on a charge, before fully recharging in just 2.5 hours at an xStation. It’s expected to be market-ready later this year.

There’s a story from Vern Janvier’s childhood that has played a big part in who he is today.

“Back when there was not much here and we were living a traditional, subsistence lifestyle, my grandfather was hunting with his family in the bush, and one of his daughters – my aunt – got really sick,” he says, recounting a painful part of his family’s history.

“He tried everything he could, but he didn’t have any medicine to give her and she ended up passing away. He had to carry her body for two days back to the community. That’s why my grandfather always said that we need to be partners with the others who are here – for the health of our people, we need the money that brings stability and opportunities for our people.”

Janvier says his grandfather’s words have guided much of his life, first as he pursued jobs on natural gas projects in northern Alberta in the early 1980s, then as a successful entrepreneur in the oil and gas services industry, and now as chief of the Chipewyan Prairie Dene First Nation, located 120 kilometres southeast of Fort McMurray.

“The forest, the rivers, the land, is still very important to us for hunting and fishing and the traditional aspects of our culture, but those things are not how we make our living and pay for all the needs of our community,” he says. “Now we own drilling rigs, we run camps – we have a lot of employment and the industry is what has taken us into the future.”

Janvier is supportive of Teck Resources’ proposed Frontier oil sands mine, which is awaiting a regulatory decision from the federal government. Although it would be located approximately 200 kilometres north of his community, Janvier expects the project will generate much-needed opportunities for the community-owned companies that may service the project.

“The decline of the industry up here is kicking us hard,” he says. “A lot of the work has disappeared and that has affected us a lot because we rely on it for health care, to build houses for our community, for buses to get our children to school, to send our kids to university.”

Janvier points to Cenovus Energy Inc.’s recent decision to invest at least $50 million over the next five years on improved housing for his reserve and other First Nations and Metis communities near its oil sands operations as one example of how the industry is working to improve relationships with Indigenous people and maximize the benefits of oil and gas development for those living closest to it.