Canadian Occupational Projection System (COPS)

Industrial Summary

Support Activities for Mining, Oil and Gas Extraction

NAICS 2131

This industry comprises establishments primarily engaged in providing support services, on a contract or fee basis, required for the mining and quarrying of minerals and for the extraction of oil and gas, such as drilling activities. It also includes establishments engaged in the exploration for minerals, other than oil and gas, such as taking ore samples and making geological observations at prospective sites. The industry is essentially oriented toward the domestic market as most of its production is supplied within the country. It employed 93,200 workers in 2016, mainly concentrated in Alberta (61%), followed distantly by Ontario (11%), British Columbia (10%) and Saskatchewan (9%), with a workforce primarily composed of men (83%). Key occupations (4-digit NOC) include:

  • Oil and gas well drillers, servicers, testers and related workers (8232)
  • Contractors and supervisors, oil and gas drilling and services (8222)
  • Oil and gas well drilling and related workers and services operators (8412)
  • Managers in natural resources production and fishing (0811)
  • Underground production and development miners (8231)
  • Oil and gas drilling, servicing and related labourers (8615)
  • Supervisors, mining and quarrying (8221)
  • Transport truck drivers (7511)
  • Heavy-duty equipment mechanics (7312)
  • Construction millwrights and industrial mechanics (7311)

The performance of the industry is closely related to capital spending in exploration and extraction activities in the mining and fuel industries. Oil and gas represent the most important contributors, with output about four times larger than that of mining. The number of wells in operation and new drilling projects are key drivers for support activities and both are highly dependent on the prices of oil, gas, metals and minerals, which in turn are driven by global demand for energy and commodity products. The surge in prices recorded prior to the global recession of 2008-2009 resulted into major investments in the fuels and mining sectors, leading to a burst in various support activities, such as drilling, excavating, building and pumping wells for oil and gas field operations. While production fell temporarily in 2009 as a result of a cyclical contraction in commodity prices and investment, it quickly recovered during the following two years and continued to post healthy growth until 2014. However, the industry was severely affected by the sharp decline in crude oil prices that occurred during the second half of 2014 and led to major investment cutbacks from oil producers in 2015 and 2016. Over that period, output in the industry fell drastically, recording a cumulative decrease of 53% in only two years. This was severe enough to turn the last ten years GDP growth in the industry into a negative, with annual declines averaging 5.3% over the period 2007-2016. Employment also recorded significant fluctuations over the past ten years, with job losses generally taken place prior to the decreases in output. However, the decline in employment over the entire period was much more modest than the decline in output, averaging 0.7 annually, resulting in negative growth in productivity.

Over the period 2017-2026, production growth in the industry is projected to return to positive territory, averaging 6.1% annually. While this appears to be a huge improvement relative to the previous ten years, it is somewhat misleading since the sharp contractions recorded in output in 2015 and 2016 significantly lowered the last ten year average. The rebound in production is expected to occur gradually, as after three years of oversupply on the world crude oil market, demand is finally catching up, creating some upward pressures on oil prices. With oil prices improving and drilling costs falling, companies are expected to start ramping up exploration and drilling activities again. The eventual construction of a major pipeline that would carry oil from Western Canada could also lead to increased investment from oil producers, while geological exploration in Northern Canada could lead to the development of large mining projects. Despite those positive developments and opportunities, the level of real GDP in the industry is not expected to return back to its historical peak of 2014 any time soon, neither are crude oil prices. The rebound in production is expected to lead to renewed growth in employment over the period 2017-2026, with gains averaging 1.5% annually. The modest pace of growth anticipated in employment reflects the fact that most of the increase in production will come from a turnaround in productivity. As mining and oil and gas producers focus on improving cost competitiveness and productivity, this will filter downstream and contribute to support services companies. Advances in technologies are allowing the industry to optimize logistics scheduling and operate several equipments remotely from one location by one operator without being on-site. The adoption of such technologies and logistical techniques are expected to straighten productivity, but also restrain job creation over the projection period, leaving the number of workers below its historical peak of 2013. In addition to high volatility in commodity prices, the industry is challenged by several factors, including the waning of conventional oil and gas reserves due to the gradual depletion of the Western Canadian Sedimentary Basin, rising compliance costs as exploration expands in more regulated and more environmentally sensitive areas, and the recent cancellation of the Pacific Northwest Project that has significantly reduced the potential of British Columbia to export liquified natural gas (LNG).

Real GDP and Employment Growth Rates in Support Activities for Mining, Oil and Gas Extraction

Figure showing the annual growth of real GDP and employment over the periods 2007-2016 and 2017-2026 for the industry of Support Activities for Mining, Oil and Gas Extraction. The data is shown on the table following this figure

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

Text Version of Figure Real GDP and Employment Growth Rates in Support Activities for Mining, Oil and Gas Extraction, 2007-2016 and 2017-2026, in Percent
  Real GDP Employment
2007-2016 -5.3 -0.7
2017-2026 6.1 1.5

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

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