The energy sector accounted for 7% of gross domestic product (GDP) in 2008 and directly employed 363,000 people, or 2% of the labour force. High energy prices early in 2008 fuelled Canada’s export revenues. According to National Energy Board figures, energy exports reached the highest value ever, $133 billion, and a record 28% of all merchandise trade. Just a year earlier, energy exports totalled $93 billion, or 21% of all exports.
In the first half of 2008, energy prices climbed to record highs amid rising demand. Oil reached US$147 per barrel in July, and natural gas prices rose to around US$13 per million British thermal units (MMBTU). The second half brought the financial and credit crisis, decreased demand for energy, significantly lower energy prices and a recession. Oil prices ended the year at US$45 per barrel, and natural gas prices dropped to less than US$6 per MMBTU.
The climbing oil prices early in 2008 also affected net energy export revenue—the value of energy exports minus the value of energy imports—lifting it to $73 billion, an increase of almost 45% over 2007. Historically, net export revenue from natural gas has been greater than net export revenue from crude oil (and its products). However, in 2008, the value of crude oil net exports surpassed the value of natural gas net exports by almost $15 billion.
Net export revenue from electricity also exceeded 2007 levels, as water conditions were favourable in the main hydro‑generating provinces and electricity exports grew in Ontario. And in 2008, for the first time ever, Canada became a net exporter of coal, in the amount of $360 million.
Both natural gas and oil production declined in 2008, contributing to a 2.1% drop in total Canadian energy production. Hydroelectricity production increased 10% from 2004 to 2008, whereas energy production from other sources (mainly wood) declined slightly.
Notably, investment in wind projects increased the energy produced from wind by 265% from 2004 to 2008. However, wind energy represents about 0.1% of the energy produced in Canada.
The United States and Canada are the largest consumers of energy in the world, consuming almost 200 gigajoules per capita—the equivalent of each Canadian and U.S. resident using 5,000 litres (32 barrels) of crude oil per year, or approximately twice the per capita energy consumed in other OECD countries. In non-OECD countries, energy consumption per capita is, on average, 23% of that consumed in the OECD countries.
From 2004 to 2008, energy consumption remained relatively stable in Canada, with transportation showing the largest increases, 5.7%. However, the population grew over this period, so per capita use of energy has fallen 1.4%. About 25% of all energy consumed by Canadians is generated using natural gas.