Introduction
Many countries across the world have relied on natural resources for their economic development. Different nations have varied endowments, which has often determined their economic growth and development. The industrial revolution has been a critical age because it led to massive exploitation of natural resources, which fueled growth and led to the modern developed countries. Canada can be classified among the industrialized nations where most of its growth has relied on the extraction of natural resources. The focus of this essay of to explore how the extraction of resources has contributed to Canada’s economy. Additionally, the environmental and political implications will also be highlighted.
Economic development
Canada is endowed with many natural resources, some of which could be labeled as unconventional. According to Heyes et al. oil resources in Canada include oil sands and shale gas (242). The exploitation of these resources has risen rapidly over the past few decades to the point where they now contribute a significant amount of exports and foreign direct investment (FDI) for Canada. Commercial mining of natural oil in the country started in 1967. However, much of the growth has been experienced from the start of the 21st century as part of a wider boom in Canada’s economic commodities. For example, 2017 saw the country produce an estimated 2.9 million barrels of oil per day, which is approximately four times the amount produced in 2000. Additionally, the investments in oil sands between 2000 and 2015 have been over 270 billion Canadian dollars. Direct employment during this period has also risen to over 70,000 workers, while indirect jobs created reached over 400,000 in 2014 (Heyes et al. 243). Therefore, resource extraction is seen as a major contributor to the country’s overall economic growth.
Extraction of natural resources is a major economic activity making significant contributions to a country’s GDP. In Canada, some regions have greater natural resource reserves than others, which means that the commercial benefits are unevenly distributed. For example, Alberta contributed to an estimated 82% of the total production of liquid hydrocarbons and over 97% of the country’s natural oil reserves (Carter et al. 64). These statistics were taken in 2014, from where it also emerged that 2.28 million barrels of oil daily. Other regions have other natural resources, including uranium and coal in Saskatchewan. The revenues obtained by the government across the different regions have also been determined by resource extraction. For instance, shale and liquified natural gas (LNG) are British Columbia’s main revenue sources, which accounted for $1.25 billion or between 3.5% and 4.4% of the GDP. Some of the resources mined are exported to other countries as illustrated by the observation that Canada is a key exporter of natural oil and gas. The bottom line is that natural resources present key trade commodities for countries, which are a source of government revenue.
Environmental Implications
The extraction of natural resources is associated with devastating effects on the environment. According to Carter et al., a growing dependence on oil and gas leads to a weakening environmental policy (61). Therefore, it can be expected that Canada is one of the world’s largest polluters as a result of rising shaling and other methods of extracting oil and natural gas. One of the ways in which the environment is destroyed by the extraction of natural resources is the emission of greenhouse gases (GHGs). The emissions of GHGs work in two ways as illustrated by Heyes et al.): processes of extraction, transports, and processing; and release of carbon through the use of the final product (248). The operations involving Canada’s oil sands have increased GHG emissions from 15.3 million metric tonnes to 69.3 million metric tonnes between 1990 and 2016 (Heyes et al. 248). Additionally, the level of emissions is expected to increase to 115.9 million metric tons by 2030. These figures indicate that extracting natural resources is one of Canada’s biggest environmental hazards associated with global warming. The GHGs are the main risk fact of global climate change.
The resulting final products are fuels, including natural gas and all by-products of crude oil. Experts estimate that refined products have higher life cycle emissions than other crude sources (Heyes et al. 249). Therefore, further emissions and a greater threat of global warming emerge from Canada’s use of fossil fuels. Extraction of other resources has additional implications on the environment. For instance, mining degrades the land, especially where land reclamation after mining practices is not done. Plant and animal life is destroyed across all mining sites through habitat destruction and pollution. In oil mining, the ores are often mixed with water and chemicals that cause massive land and water pollution. Toxic seepages into groundwater mean large-scale water contamination. People, plants, and animals that depend on the natural water reserves are cut off from the water sources. The same applies to surface water across rivers, lakes, and other water bodies. The quality of life in areas surrounding mines is detrimentally affected. Most importantly, Canada has massive serene landscapes, especially along the arctic region. Destruction of these places is also taking place on a very large scale.
Political Impacts
Resource extraction also has critical political implications, especially where commercial practices influence governance issues. Government policies reflect the interplay between Canada’s mining and the country’s politics. For instance, neoliberalism is an aspect of Canada’s political economy characterized by a shift from government regulation to market-led governance (Carter et al. 70). The ultimate result of these politics is that increasing privatization is taking place where the private firms gain much of the economic benefits. It also means that the government is becoming less capable of enforcing certain regulations, including those that focus on environmental protection. The forms of government across the provinces have also been affected by resource extraction. Political transformations have taken place in such regions as Alberta where a New Democratic Party government was elected, which was a switch from the 44 years of dominance by the Progressive Conservatives (Carter et al. 71). Each of these governments has different views on mining governance, and they reflect the overall political changes caused by the commercial extraction of resources.
Conclusion
Countries with natural resources have experienced improved economic performance because the resources are commercial commodities that can be exploited. Canada has had the same experience with natural gas and oil, which have contributed directly towards the country’s revenues from exports and domestic trade. Additionally, the industry has provided hundreds of thousands of jobs both directly and indirectly, which makes it among the country’s top employers. However, negative effects on the environment have been experienced, especially due to the massive emission levels of GHGs. The political climate of various regions is also changing due to the industry’s influence, especially based on governance and government regulation.
Works Cited
Carter, Angela et al. “Environmental Policy Convergence in Canada’s Fossil Fuel Provinces? Regulatory Streamlining, Impediments, and Drift.” Canadian Public Policy, vol. 43, no. 1, 2017, pp. 61-76.
FutureLearn. “Climate change in Canada – Impacts and Responses.” 2021. FutureLearn. Web.
Heyes, Anthony et al “The Economics of Canadian Oil Sands.” Review of Environmental Economics and Policy, vol. 12, no. 2, 2018, pp. 242-263.
Wellstead, Adam. “From Fellegi to Fonberg: Canada’s Policy Capacity Groundhog Day?” Canadia Public Administration, vol. 62, no. 1, 2019, pp. 166-172.