Economic Contribution

Chapter 5.2

Economic Contribution

    Performance Highlights:

    • $8.6 billion contributed to economy; about 25 per cent in local region
    • Crown royalty payment of $582 million; over $3 billion in the last five years
    • 27 per cent increase in Aboriginal business

    Our Approach

    Albertans and all Canadians must share in the benefits of our oil sands operations – whether from the energy we provide, employment, our payment of taxes and royalties, or through the business opportunities we create. We especially recognize the value in sourcing goods and services from local, regional and national suppliers. Our preference is to source locally, if all other factors in a procurement bid are equal. We will delegate specific work to local Aboriginal-owned businesses that have the capacity to successfully fulfill contract requirements on a sustainable basis.

    Geographic Distribution of Economic Contribution ($millions)

    Note: Includes all expenditures. Due to rounding, some figures may not add up to the calculated total.

    Contributing To The Canadian And Local Economies

    Spending in 2013 increased by about $1 billion due to the significant progress made on major capital projects. This included the relocation of two mine trains and construction of a tailings management facility at our Aurora mine, and continued construction on the Mildred Lake Mine Train Replacement and the full-scale centrifuge tailings plant.

    Over the last five years, Syncrude has spent around $30 billion for goods and services purchased in Canada, of which over $25 billion was spent in Alberta alone. Of that amount, about $9 billion was spent with local Wood Buffalo suppliers, including Aboriginal-owned businesses.

    Recognizing the imperative to maximize Aboriginal procurement, a concerted effort began in 2012 to enhance outcomes. We are already seeing results, with a 27 per cent increase in Aboriginal spending in 2013 compared to 2012. Read more about our Aboriginal business focus here.

    Shipbuilder To The Sands

    Hike Metals sits on the shores of Lake Erie in Wheatley, Ontario, and builds boats for a wide array of notable customers. The company employs as many as 35 full-time tradespeople – welders, machinists, pipefitters and millwrights to name a few. It added Syncrude to its client list in 2013 with the order of two ice breakers and two work boats. These watercrafts will help ensure a steady supply of fluid fine tails pumping from our Mildred Lake Settling Basin to the full-scale centrifuge tailings plant, which is expected to come on-line in 2015. “This is valued contract work for us,” says Hike Metals president, Andy Stanton. “It’s certainly good economics for our business to have this contract with Syncrude. It helps sustain local employment in Wheatley.”

    Annual Economic Contributions

    Economic Contribution by Category

    ($ millions)

     
    2009 2010 2011 2012 2013
    Royalties, payroll & municipal taxes
    2009 2010 2011 2012 2013
    1,026 1,204 1,269 853 1064
    Purchased energy 1
    2009 2010 2011 2012 2013
    432 458 528 339 392
    Employees (salaries and benefits)
    2009 2010 2011 2012 2013
    937 843 907 866 849
    Goods and services
    2009 2010 2011 2012 2013
    3,705 3,924 4,191 5,510 6,289
    Total
    2009 2010 2011 2012 2013
    6,100 6,430 6,895 7,568 8,594

    1 Includes expenditures related to purchased bitumen.

    Due to rounding, some figures may not add up to the calculated total.

    Crown Royalty Payments

    Crown royalty payments help to build and maintain schools, hospitals and roads, among other essential public infrastructure. Over the last five years, Syncrude payments have totalled over $3 billion.

    Oil Sands Economic Impact

    The benefits of Canada’s oil sands industry is felt across the country. Every dollar invested in the oil sands creates about $8 in economic activity, according to the Canadian Association of Petroleum Producers (CAPP). New oil sands development is expected to contribute over $2.1 trillion to the Canadian economy over the next 25 years, including 905,000 jobs by 2035, according to a 2011 report from the Canadian Energy Research Institute.

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