The oil and gas sector supports a host of industries, such as construction, engineering, finance, and hospitality to maintain and grow its operations. As well, “[o]il and gas companies do not develop their projects and resources alone. They rely on thousands of vendors in their supply chain who have developed specialized expertise, products and services to support a project's life cycle. As such, the oil and gas industry provides vast opportunities for enterprising individuals to be a part of the supply chain,” Mr. McCrea from 3twenty Modular pointed out.[142] According to him, “there are small, medium, and large enterprises that participate in all aspects of the supply chain.”[143] During the course of the study, the Committee heard from witnesses representing various supply chain industries that support the oil and gas sector, and benefit from its growth and development.

A. Benefits to the Manufacturing Industry

“[T]he oil and gas industry helps sustain and grow a healthy Canadian manufacturing industry,”[144] Mr. McCrae noted in his presentation. Investment in oil and gas projects, their operation, and maintenance drive significant demand for manufactured products including structured steel, manufactured pumps and valves, heavy mining machinery, and transportation equipment. Mr. Myers told the Committee that “for every dollar of new investment in new projects in the oil sands, 62 cents is spent on manufactured products, out of which 28 cents is derived from domestic manufacturing, and 34 cents from goods that are imported into the country.”[145] More than $300 billion of investment in oil sands development (including operations and maintenance), generated $64 billion in demand for Canadian-produced manufactured products, which is equivalent to 640,000 person-years of work.[146] To illustrate the importance of the oil sands development projects, Mr. Myers referred to the 2008 recession, and stated that “if it were not for the oil sands, the downturn … in manufacturing would have been much more severe than it was.”[147]

B. Benefits to the Construction Industry

The Committee learned that the oil and gas sector is a major employer in the construction industry.[148] In 2013, approximately one third (21 million) of construction hours were worked by trades personnel in Alberta’s oil and gas projects.[149] Speaking about the construction industry’s relationship with oil and gas, Mr. Smillie told the Committee that:

As much as our members rely on construction work to put food on their table, the oil and gas sector relies on the construction industry. Construction activity on an oil and gas project is a major employer of our members. In the course of a year, nearly 40% of our national membership is actively engaged on an energy project in some way.[150]

He also noted that every billion dollars invested into an oil and gas construction project creates at least 4000 direct construction jobs, and many indirect jobs in other industries such as engineering, manufacturing, and services. With this in mind, Mr. Smillie pointed out that the $650 billion dollars of planned investment, identified by the Major Project Management Office, could result in the creation in “tens of thousands of jobs.”[151]

C. Benefits to the Steel Industry

The Committee also heard from the President of the Canadian Steel Producers Association, Ron Watkins, who indicated that the oil and gas industry accounts for approximately one-third of the demand for a multitude of Canadian steel products. To illustrate the cross-country benefits that the industry has through its supply chain, he told the Committee that steel products “might be manufactured in Sault St. Marie and threaded in Alberta with proprietary technologies using steel originally melted in Sorel-Tracy, Quebec.”[152] To summarize his point, Mr. Watkins stated that steel “products embody cross-Canada supply chain relationships that add value and jobs in multiple phases in several regions, and for multiple uses.”[153]

Mr. McCrea, a young Saskatoon-based entrepreneur, told the Committee that his growing business is a success story because of the oil and gas industry. His enterprise, 3twenty Modular, designs and manufactures steel modular units that provide housing and offices for resource and construction companies. In 2013, 75% of the company’s revenues came from Alberta. Mr. McCrea also stated that “the oil and gas industry's continued growth has provided [3twenty] with certainty to plan [its] business growth and invest capital into additional infrastructure, human resources and R & D,” and that “without the oil and gas industry, expansion and investment would seem risky and unattractive.”[154] According to him, “it is undeniable that the oil and gas industry has enabled thousands of entrepreneurs to take an idea or an opportunity and turn it into a business – much like [3twenty’s] story.”[155]

D. Benefits to Other Industries

Some witnesses spoke about how Canada’s oil and gas production enables the manufacturing of petrochemicals and fertilizers to give Canadians access to plentiful food grown on less land. For example, Mr. Larson informed Committee members that natural gas is essential to Canada’s nitrogen fertilizer manufacturing and potash production. It represents between 70% and 90% of total input costs of manufacturing nitrogen fertilizer, and between 20% and 25% of total input costs of potash production.[156] Speaking about the benefits of affordable natural gas, George Mallay, General Manager of Sarnia-Lambton Economic Partnership, pointed out that shale gas has proven to be a very cost-effective feedstock for making hydrogen, used by the refineries of the Sarnia-Lambton industrial complex.[157]