10 need-to-know facts about natural resources and jobs

Jobs are the most direct and significant way that natural resources benefit society. Here are 10 standout facts about this powerful relationship.

Never before have we been more dependent on fibres, minerals and fuels. But can we do it right – right for people and for the environment? That's the question of the moment.

The following 10 slides reveal some of the most powerful facts Resource Works researchers have uncovered in this project over the past several years. Download a pdf version here.

Scroll to the bottom of this post to view supporting data.

Delving deeper: Sources for the 10 Need-To-Know Facts

How did we source these amazing facts? Research, and lots of it. Below are our citations in support of the 10 Need-To-Know Facts about natural resources in British Columbia:

1. Jobs in natural resources pay #1 in BC  According to BC Statistics in "Earnings and Employment Trends Data 1610" for October 2016, natural resource jobs pay higher than any other industry, with weekly average paycheques of $1,505.89 in the period January to October 2016. According to BC Statistics in "Earnings and Employment Trends Data 1610" for October 2016, natural resource jobs pay higher than any other industry, with weekly average paycheques of $1,505.89 in the period January to October 2016. This is based on the Statistics Canada Labour Force Survey. Utilities ran a close second at $1,387.01 a week. Ranked third is public administration, where wages averaged $1,317.63. These top categories equate to about $34-35 an hour. The lowest wages in the industrial comparison occurred in accommodation and food services: $461.22 a week (under $15 an hour).

2. It takes up to six jobs to equal the positive impact of one job in natural resources: For many years now, Vancouver-based Urban Futures Institute has been studying the impact of natural resources on British Columbia's economy, or what it calls "the spatial origins of BC's exports." The model employed has allowed its economists to pinpoint where economic activities are located along with the jobs that support them, and what emerges is a stark divide that persists to the present day. Resource jobs stand out in these studies for the simple reason that they produce exports. According to Urban Futures: "Exports are the base of an economy because they are the only source of money to pay for imports and to facilitate transactions and taxation in the population serving sector. In this sense we are interested in 'first dollar produced by a specific activity." See the report for 2011, p. 11 Exports can take the form of merchandise exports or service exports, and in BC's case the former were worth $36 billion in 2015. In 2015, service-producing industries represented about 75 per cent of BC’s real GDP and goods-producing industries accounted for around 25 per cent. (See the document here p. 3, p. 5) UFI found that international exports have historically been goods based, while trade in the domestic economy accounts largely for the service economy. So the part of the economy that produces export income is, largely, the merchandise economy, and in Canada's case about 70 per cent of our export goods are resource based. When UFI studied the Northeast BC economy in 2014, it came away with a remarkable finding: that one job in the region had the export-creating punch of six average jobs from the BC economy generally: "As a result of the Northeast’s substantial contribution to the value of BC’s total exports in 2013 ($8.1 billion out of $90.0 billion; nine percent), the Northeast region provided the greatest export value relative to the size of its labour force (representing less than two percent of BC’s total) of any region in the province in 2013: the export value per labour force participant in the Northeast region was $198,474, almost six times the average of $33,709 seen throughout the rest of British Columbia." (Urban Futures, September 2014, Exports Analysis - Northeast & Peace River Regions, prepared for the North Peace Economic Development Commission.) The six-times multiplier may have represented a high water mark due to higher commodity prices at the time of the study. Nevertheless, the basic truth that resource exports are a powerful driver that make resource jobs super-significant remains true even in periods when prices have cycled downward. In 2011, UFI made this interesting observation: "While exports may represent a smaller share of total economic activity than domestic consumption (exports were valued at just under $70 billion in 2009 while consumption was $126 billion), we will always have to import certain goods and services that we, ourselves, cannot easily produce; from iPods and blackberries to vitamin C (citrus fruit) and vitamin D (winter trips to sunny destinations), we will always be limited in some capacity by our available resources, our climate, or our market scale. As the limits on our resource endowment mean we must import some things, then we must, in turn, export others; put slightly differently, if we spend outside our economy, we must also earn outside it. The unavoidable consequence of having to import into our domestic economy is that we should at least match, if not exceed, these expenditures on imports with money we earn by selling outside our domestic economy (exports)." If only these facts were acknowledged when we talk about tough resource decisions, there would surely be a better public conversation as a result.

3. Natural resources are BC's 2nd largest area of capital investment. The mining and oil and gas industries were among the biggest spenders in terms of capital investment in BC in 2015, surpassed only by the housing sector. This is not a new trend: it has been this way for many years. I've pulled data from 20+ years of the Ministry of Finance annual Financial and Economic Review; this is the link to the most recent version and I draw your attention to the table on page 76. Even though there has been a decline over the past several years in resource investment, due to soft commodity prices, at $5 billion in 2015 that meant natural resources easily held their second place position. Spending intentions for 2016 were also strong, such that resources investments were valued at $68 billion over the last decade. Put another way, for example, for every $1 invested into educational services (buildings and equipment), $4 is invested in oil & gas and mining. This chart shows a typical distribution of capital spending intentions:

   For further background, here is a Resource Works blog post with some interesting charts. 

4. British Columbia leads in land protection with twice the United Nations recommended level of protections in place: Target 111 of the Convention on Biological Diversity (the Convention), commonly referred to as the Aichi Biodiversity Agreement, and adopted by Canada in 1993, pinpoints a global aspirational goal for 2020, according to writer Denise Mullen: “…at least 17% of terrestrial and inland water, and 10% of coastal and marine areas, especially areas of particular importance for biodiversity and ecosystem services, are conserved through effectively and equitably managed, ecologically representative and well-connected systems of protected areas and other effective area-based conservation measures, and integrated into the wider landscapes and seascapes.”  There has been a sixfold increase in land managed for non-industrial or development values since the early 1990s in British Columbia. Land protected stands at a minimum 37% or 349,551 square kilometres, an area slightly smaller than the entire land mass for Germany at 357,168 square kilometres. and that is more than double what is called for under the Aichi agreement.

5. Engine of the B.C. economy: Over time, the British Columbia economy has become more diversified. Positive growth across many sectors of the economy has resulted in greater diversification than was the case a couple of decades back. Yet, contrary to what many would expect, natural resource industries do remain very significant. We often hear conflicting messages about the benefits of the resource sector and its foundational role, so here are a few of the solidly documented positives to consider whenever pondering this question: Resource jobs pay well, resulting in family-sustaining paycheques that are the foundation of numerous communities around British Columbia. We sometimes hear that resources are “boom and bust” so can’t be relied on. In a sense that’s true and if we were an Alberta with a very high reliance on a single commodity like oil, that could be a problem. In fact, our highly diversified resource economy depends on a great many fuels, fibres and minerals that all have their own price cycles in the global economy. Our research shows there has never been a time in the past 20 years when all of our resource export commodities have dropped year to year in the same period. This post tells the story well: http://www.resourceworks.com/the_7_myths_of_bcs_resource_economy

6. Natural resources are of growing (not shrinking) importance in the British Columbia economy: In the decade to 2006, capital investment in provincial natural resources totalled $34.4 billion. In the 10 years to 2016, the figure was $74.3 billion. So it is not true to state, as is often heard, that resources are less important. What is happening is that the overall economy is growing and diversifying, which is a good thing too.  In 2014, the value of goods exported from BC reached an all-time high, and since a significant majority of our exports are resource-based that points to the continuing significance of the sector. Data for this is drawn from the B.C. Ministry of Finance Financial and Economic Review over a period of 20 years. The following table explains the evidence that 21.7% of the Canadian economy is resource based:

   
   
   
   
   
   

7. Jobs in natural resources create as much as 5x as many other support jobs as other sectors: According to a study by the Vann Struth Consulting Group for the Squamish Lillooet Regional District in 2013 (“Employment Projections for the Squamish Lillooet Regional District”), jobs in the natural resource sector produce higher than average spin-off jobs in other areas of the economy. For example, pulp and paper brings 106 spin off jobs for every 100 direct jobs; mining brings 70 spin-off jobs per 100. By contrast, tourism and high tech are tied, creating 22 spin-off jobs per 100 direct jobs. See our Citizen's Guide to LNG, p. 26.

8. As First Nations deal with their increasing responsibilities around community stewardship, natural resources play an increasing role in providing opportunities that create jobs and strengthen local culture while emerging from poverty. Only First Nations themselves can define and deliver on these goals. Whether it is the First Nations LNG Alliance advocating for beneficial energy development, or indigenous organizations showing how they plan to "get stuff done," the signs are unmistakeable. And check out this video from Chief Joe Bevan:

9. 55% of new resource jobs are in Metro Vancouver: So much for the cliche of rural toilers vs urban enjoyers. It turns out we are all in this together. In 2014, Resource Works published a groundbreaking research paper showing that the majority of new jobs created with the resource economy grows occur in Metro Vancouver.  According to the author: "It is the cities that provide the wide range of financial, business and even transportation services used by the resource sector. It is also in the cities where the higher incomes in the resource sector and its spin-off industries are spent on a wide range of retail and personal services." 

10. Resource jobs contribute to sustainability via investments in technology and innovation: Investments in research and development for mining and oil & gas alone are greater than all the R&D for pharmaceuticals and medical equipment, computers, communications equipment and aerospace products. The federal government has pledged hundreds of millions of dollars for innovation in forestry, fisheries, mining, energy and agriculture. In short, BC’s high tech sector is going in ways that are connected to improving natural resources. A well-sourced note we published not long ago detailing the connections between resources and technology provides a good starting point for further exploration.