Resources: Long-term shifts in commodities

Canadian Megatrends

A long list of Canadian towns and cities owe their growth to the resources that could be mined, drilled, chopped, farmed or fished from the surrounding area. Across the nation, commodities have often been synonymous with the towns and cities built around them: coal in Glace Bay, Nova Scotia; wheat in Swift Current, Saskatchewan; nickel in Sudbury, Ontario; oil in Fort McMurray, Alberta; lobster in Shediac, New Brunswick; timber in Prince George, British Columbia; gold in Dawson City, Yukon; or, aluminum in Saguenay-Lac-Saint-Jean, Quebec.

These natural resources funded Canada's development for generations. By providing food and shelter for Canadians, material inputs for Canadian industry, and raw and semi-processed commodities for sale on international markets, they supported Canadians' living standards, and helped to finance international borrowing and the purchase of foreign goods and services, particularly consumer goods and productivity enhancing machinery and equipment.

Today, natural resources continue to play this important role. They account for one-fifth to one-third of Canada's exports and often influence movements in the Canadian dollar Reference 1. In 2014, as the price per barrel of crude oil ranged from a high of about US$114 to less than US$55, the Canada-US exchange rate fluctuated from over 91 cents to about 86 cents.

Although the overall effects of natural resources on the economy have remained fairly constant over long periods of time, the composition of the natural resource production has changed.

A changing mix of commodities

Chart 1 - Selected resources, by percentage of total production, 1886 to 2014
Description for Chart 1
Selected resources, by percentage of total production, 1886 to 2014
Year Forestry Energy Agriculture Mining Fishing
1886 17.37 1.95 79.64 1.04 na
1887 15.26 1.94 81.8 1 na
1888 16.29 2.21 80.18 1.32 na
1889 17.23 2.36 78.72 1.68 na
1890 18.94 2.9 76.26 1.9 na
1891 18.92 3.44 75.06 2.57 na
1892 20.34 4.03 73.32 2.32 na
1893 21.2 4.7 71.19 2.91 na
1894 19.46 4.44 73.33 2.77 na
1895 19.16 4.88 71.96 4 na
1896 21.17 5.16 68.28 5.39 na
1897 18.1 4.13 70.35 7.42 na
1898 14.81 3.77 71.54 9.89 na
1899 16.74 4.56 65.39 13.3 na
1900 18.07 5.49 59.79 16.66 na
1901 14.42 4.16 67.29 14.12 na
1902 14.81 4.27 70.17 10.74 na
1903 16.02 4.45 69.51 10.02 na
1904 16.33 4.85 69.81 9.02 na
1905 17.02 4.73 67.57 10.68 na
1906 15.56 4.75 68.7 10.99 na
1907 19.87 5.56 63.99 10.58 na
1908 18.22 5.65 65.79 10.34 na
1909 16.96 4.47 69.79 8.78 na
1910 20.06 5.76 63.59 10.59 na
1911 16.1 3.95 72.21 7.75 na
1912 15.8 5.3 68.45 10.45 na
1913 14.12 5.39 69.94 10.55 na
1914 14.11 4.83 71.68 9.38 na
1915 10.99 3.47 76.73 8.82 na
1916 10.39 3.32 76.37 9.93 na
1917 12.98 3.26 75.02 8.74 na
1918 14.91 3.72 72.89 8.48 na
1919 17.63 3.78 72.98 5.61 na
1920 24.69 4.94 64.99 5.38 na
1921 22.72 6.84 65.61 4.83 na
1922 22.41 6 65.8 5.78 na
1923 24.62 5.87 62.49 7.02 na
1924 24.28 4.52 62.94 8.26 na
1925 21.75 3.78 66.45 8.02 na
1926 23.12 4.44 64.57 7.87 na
1927 21.75 4.32 66.16 7.77 na
1928 21.99 4.32 65.15 8.54 na
1929 26.55 5.21 56.2 12.05 na
1930 28.81 5.95 51.49 13.74 na
1931 29.24 6.79 47.45 16.52 na
1932 22.43 6.71 53.7 17.16 na
1933 19.55 6.45 51.93 22.07 na
1934 21.53 5.44 48.91 24.11 na
1935 20.78 5.54 48.51 25.16 na
1936 21.52 4.89 48.86 24.74 na
1937 24.74 5 41.16 29.1 na
1938 21.53 5.91 41.22 31.34 na
1939 19.32 4.61 48.94 27.13 na
1940 24.05 4.42 44.72 26.81 na
1941 28.32 5.05 35.19 31.44 na
1942 23.03 4.19 47.19 25.59 na
1943 22.94 4.46 49.04 23.56 na
1944 23.42 4.18 53.69 18.71 na
1945 27.2 3.84 47.88 21.08 na
1946 31.86 4.22 49.87 14.05 na
1947 35.94 3.77 45.21 15.09 na
1948 33.84 4.64 45.45 16.08 na
1949 32.11 5.11 45.04 16.51 1.24
1950 32.82 4.99 44.17 16.62 1.39
1951 32.97 4.66 45.86 15.29 1.22
1952 30.7 5.24 47.4 15.46 1.19
1953 32.28 6.79 42.85 16.87 1.21
1954 35.17 9.48 34.28 19.59 1.47
1955 33.07 8.5 35.73 21.6 1.1
1956 32.05 10.11 33.48 23.12 1.25
1957 32.02 11.74 32.07 23.01 1.16
1958 30.97 10.57 37.01 19.93 1.52
1959 30.7 10.41 35.32 22.38 1.19
1960 31.42 10.34 33.74 23.5 1.01
1961 33.4 12.21 29.99 23.2 1.2
1962 30.31 12.5 33.92 22.02 1.25
1963 29.28 12.41 35.78 21.47 1.06
1964 30.35 12.59 33.2 22.75 1.11
1965 29.96 12.59 32.67 23.71 1.08
1966 28.18 12.26 35.8 22.6 1.16
1967 28.73 13.69 30.9 25.65 1.03
1968 29.91 13.85 29.12 26.02 1.1
1969 31.33 14.07 29.17 24.52 0.91
1970 29.4 15.79 25.98 27.83 1.01
1971 28.94 17.45 28.46 24.22 0.93
1972 30 17 30 21 1
1973 28 16 34 19 1
1974 28 22 30 20 1
1975 23 26 31 19 1
1976 26 27 28 18 1
1977 27 31 23 18 1
1978 27 30 25 16 2
1979 27 30 23 17 2
1980 24 31 23 21 1
1981 23 32 24 19 1
1982 21 39 25 14 1
1983 21 41 22 15 1
1984 22 42 19 16 1
1985 22 42 19 15 1
1986 28 31 21 19 2
1987 31 30 17 19 2
1988 31 27 17 23 2
1989 30 26 18 22 2
1990 28 32 19 20 2
1991 27 31 19 21 2
1992 28 30 19 20 2
1993 29 31 20 18 2
1994 31 30 18 19 2
1995 35 25 18 19 2
1996 30 30 20 18 1
1997 31 32 18 18 1
1998 31 29 19 19 1
1999 31 34 17 16 2
2000 26 46 13 14 1
2001 23 47 15 14 1
2002 24 44 14 15 2
2003 19 55 13 13 1
2004 19 54 12 14 1
2005 15 60 10 13 1
2006 14 60 9 17 1
2007 12 57 11 19 1
2008 9 62 12 17 1
2009 9 60 15 16 1
2010 9 59 12 19 1
2011 8 58 14 19 1
2012 8 58 15 18 1
2013 8 60 15 16 1
2014 8 62 14 15 1

Early in Canada's history, agriculture and forestry products dominated. But from the farm and the forest, the focus has moved down to what lies beneath the country in the bedrock below. This progression can be tracked using the 24 commodities that constitute the Bank of Canada commodity price index.

Through time, metals and minerals rose in importance with technological change arising from the introduction of hydro electricity generation, improved rail, road and pipeline networks. Improved mining equipment and drilling techniques increased the knowledge of mineral deposits, improved access to minerals and lowered transportation costs. At the same time, demand changed as new products came to market. For instance, the increased importance of daily newspapers in the United States led to an increasing demand for Canadian newsprint and new electrical distribution networks increased the need for copper.

Rise of oil

Over the 1886 to 1947 period, agriculture was joined by forestry, then mining and, eventually, energy. With the exception of an early advent of the oil industry in Oil Springs, Ontario, oil did not constitute a major component of energy production for Canada until 1947 with oil discoveries in Leduc, Alberta. After the 1973 oil price shock, production of conventional energy sources increased and technological innovation led to development of the oil sands in Canada. The shift towards non-conventional extraction, including the introduction of offshore production in the 1990s, is the latest in a long history of innovation-led changes in the composition of Canada's resource industries. The result is an oil and gas industry concentrated in Alberta and Saskatchewan, but offshore production also makes an important contribution to the economy of Newfoundland and Labrador.

Today, Canada is one of the few developed nations that is a net exporter of energy. In 2010, these exports totalled about 9,700 petajoules, up 3% from 2009. In 2010, Canada exported 63% of its crude oil, 61% of its marketable natural gas, 55% of its coal, and 20% of its refined petroleum productsReference 2.

While energy commodities have increased in importance in the last 40 years, the economic history of Canada has been influenced by our overall resource wealth. Energy is the latest manifestation of the deep Canadian reliance on natural resources as a driver of innovation and economic growth.


Definitions

Bank of Canada commodity price index: The Bank of Canada commodity price index (BCPI) is a chain Fisher price index of the spot or transaction prices in U.S. dollars of 24 commodities produced in Canada and sold in world markets.

24 key commodities found under four industry groupings:

  • Agriculture and fisheries products: cattle, hogs, wheat, barley, potatoes, canola, corn, finfish and shellfish
  • Forestry: lumber, pulp, newsprint
  • Metals and minerals: gold, silver, lead, iron, nickel, copper, aluminium, zinc, potash
  • Energy: coal, oil, natural gas

References

Reference 1

Amano, Robert A., and Simon van Norden. 1993. "A forecasting equation for the Canada-U.S. dollar exchange rate," in The Exchange Rate and the Economy, 207–265, Ottawa, Bank of Canada.

Return to reference 1 referrer

Reference 1

Statistics Canada. 2013. “Energy supply and demand.” The Daily, December 10.

Return to reference 2 referrer

Date modified: