Sector Profile
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Calgary Alberta EnergyCanada Sector Profile Energy Sector Profile 2012 1 Table of Contents Calgary has a great energy and a great story 7 Unconventional energy 22 An economy poised for growth 8 Shale gas 23 Tight oil 23 Competitiveness 8 Oil sands 23 Human energy 9 Oil sands recovery and extraction 23 Financial energy 10 Oil sands and the environment 23 Calgary; a safe and secure destination 13 for foreign investment Electricity 24 Leading the industry with 14 Energy industry services 25 Sustainable and renewable energy Sustainable and renewable energy 26 Oil Sands Leadership Initiative 15 Wind Energy 28 Canada’s Oil Sands Innovation Alliance 15 Solar Energy 28 Alberta Energy Efficiency Alliance 15 Renewable fuels 29 Alberta is Energy 15 The role of Calgary Economic Development 30 Alberta’s energy strength 16 What we can do for your business 31 Conventional energy 18 Trade missions 31 Incoming missions 32 Conventional oil 19 Sustainable and Renewable Energy Cluster (SURE) 32 Natural gas 19 World Energy Cities Partnership and Calgary 32 Pipelines 19 Climate Change Accord Chemical manufacturing and petrochemicals 20 Fuel Forward 32 Coal 20 Appendix: Calgary’s energy companies 33 Action Calgary corporate partners 35 Contact Information 36 2 Energy Sector Profile 2012 There’s an energy in Calgary that exhilarates, invigorates & motivates. It’s a place of big skies & big ideas. Calgary is an economic force and our western values run and a catalyst for today’s deep. Calgary is a diverse city trailblazers. There’s an intense, that embraces change and urban vitality in Calgary that change-makers, and supports unleashes the bold, and sustains its communities can-do spirit of entrepreneurs and its people. There is and innovators, artists and opportunity here — to start athletes. The lifestyle is active, a business, start a new life or our perspective is global start an adventure. And everyone is welcome to be part of the energy. Energy Sector Profile 2012 1 Calgary is evolving to become the global centre for all things energy. 2 Energy Sector Profile 2012 Home to over a million residents, Calgary boasts one of the top performing economies in North America - in large part because it is Canada’s energy centre. Alberta's economy significantly outperformed the national average in 2011, as rising oil production fueled 5.2 per cent real GDP growth. BMO Capital Markets, ProvincialEnergy Sector Monitor, Profile 2012 20123 In Calgary you will find the head office of nearly every major oil and gas company in the country. Calgary is also the home to the industry’s major trade associations, major pipeline operators and manufacturers, oilfield service companies, drilling companies, energy-related engineering firms and consulting firms. In addition, Canada’s national energy regulator - the National Energy Board and the Alberta Energy Resources Energy Board, Alberta Utilities Commission, the Canadian Association of Petroleum Producers (CAPP), Petroleum Services Association of Canada (PSAC) and numerous other industry bodies and associations are headquartered in Calgary. Calgary is also becoming an innovative and globally recognized centre for financing, designing, constructing and operating affordable, sustainable and renewable sources of energy. No other industry in the country is as highly concentrated as Canada’s energy sector. The decisions made in downtown Calgary affect multi-billion dollar projects in Alberta, Canada and around the world. This concentration of industry makes Calgary a global leader in all aspects of energy: project design, exploration, production, finance, processing, transportation, marketing and management. 4 Energy Sector Profile 2012 FDI Magazine (2011) – American Cities of the Future Calgary is #3 in Top 10 Major Cities for Quality of Life Economist Intelligence Unit – Calgary 5th most liveable incity 2011 in the world Energy Sector Profile 2012 5 Calgary witnessed a Head offices have long been acknowledged as a company’s “brain.” It is the location where all operational and strategic decisions per are made and where corporate culture is established. Head offices employ highly skilled professionals and create economic spillover cent by engaging outside business 56increase in head office growth support, such as legal, financial from 2001 – 2010, boasts the and advertising services, all of which highest ratio of head offices per are important contributors capita in Canada and continued to Calgary’s economy. to grow in 2011. Head Offices per Capita (Per 100,00 persons) Selected Census Metroplitan Areas 10 9 Head Offices (2001, 2010) 8 Census Total 7 Metropolitan Area 2001 2010 Growth 20 20 6 10 01 Toronto 317 260 -18.0% 5 4 Calgary 79 123 55.7% 3 Montreal 121 102 -15.7% 2 Vancouver 71 8 7 22.5% 1 Edmonton 14 23 64.3% 0 Ottawa 19 18 -5.3% Calgary Toronto Vancouver Montreal Edmonton Ottawa Source: FP500 2011 Database; FP500 2002 Database. Source: FP500 2011 Database; FP500 2002 Database; Statistics Canada. A complete listing of energy companies located in Calgary is available in the Appendix. 6 Energy Sector Profile 2012 Calgary has a great energy and a great story FORT MCMURRAY GRAND PRAIRIE EDMONTON JASPER BANFF CALGARY Calgary is a diverse and prosperous With the youngest, city in the foothills of the Rocky Mountains, where the Bow and Elbow rivers meet. With more days and second of sunshine than any other major Canadian city and less than an hour’s most educated drive from the Rockies, it’s easy to see why Calgarians enjoy an active, population healthy lifestyle. in Canada, it’s easy to see But Calgary is much more than its why Calgary is the location geography. It is a place where, for of choice for people and generations, people have chosen to follow their dreams, build new lives, businesses seeking to make and find their place in the world. a living, and make a life. Energy Sector Profile 2012 7 After weathering the 2008 global economic recession, An economy Calgary has demonstrated a tremendous recovery and is poised for expected to lead Canada in economic growth over the next decade as new energy growth projects are developed. Economic performance highlights Calgary Economic Region % of change Indicators Unit 2011 2010 2010-2011 Gross domestic product** 2002 $ Millions 64,509 62,597 3.1% Population Persons 1,362,370 1,337,160 1.9% Working age population Persons 1,110,900 1,089,800 1.9% Labour force Persons 826,400 811,000 1.9% Employment Persons 779,300 755,300 3.2% Employment rate % 70.2 69.3 1.3% Unemployment rate % 5.7 6.9 -17.4% Labour force participation rate % 74.4 74.4 0.0% Net migration Persons 13,260 11,022 20.3% Housing starts* House Units 9,292 9,262 0.3% MLS benchmark single-family home price** $ 421,778 401,212 5.1% Value of building permits $ 5,489,148,000 3,863,178,000 42.1% Consumer price index* 2002=100 125.4 122.7 2.2% Retail sales* $ Millions 23,131.11 21,671.34 6.7% Industrial space vacancy** ^ % 3.1 3.8 -18.4% Downtown office space vacancy** ^ % 5.7 13.0 -56.2% Suburban office space vacancy** ^ % 9.5 13.6 -30.1% *denotes Census Metropolitan Area geography **denotes City of Calgary geography; ^ Q4 data Source: Statistics Canada, Conference Board of Canada, City of Calgary Corporate Economics, CMHC, CB Richard Ellis, Calgary Real Estate Board Competitiveness Calgarians enjoy a low tax regime; the province of Alberta has no municipal sales tax, provincial sales tax or provincial general capital tax. The province also boasts the lowest provincial corporate tax rate in Canada. In 2006, the provincial government dropped the general provincial corporate tax rate from 11.5 per cent to 10 per cent to ensure Alberta’s global competitiveness. Moreover, the Canadian corporate income tax rate has steadily decreased from 22 per cent in 2007 to the current rate of 15 per cent in 2012, and as a result Canada has the lowest corporate income tax rate in the G7. Calgary businesses also benefit from the fact that Alberta has no inventory tax, no machinery and equipment tax and no payroll tax. Since 2001, the provincial government has cut the small business rate in half (from six to three per cent) and more than doubled the small business income tax threshold to $500,000. Alberta is the only Canadian province to currently have a flat personal income tax rate (10 per cent); all other Canadian provinces work on a sliding income scale. Alberta’s beneficial tax regime creates an environment in which businesses can operate more profitably and individuals can retain more of their personal income. Alberta has a Scientific Research and Experimental Development (SR&ED) tax credit program which provides a refundable tax credit to corporations for SR&ED expenditures incurred in the province. The program came into effect on January 1, 2009 for SR&ED expenditures incurred after December 31, 2008. A corporation with a permanent establishment in Alberta at any time during the taxation year and that carries on eligible activities is eligible to make a claim. The tax credit offers a maximum of $400,000 and is based on 10 per cent of the eligible Alberta SR&ED expenditures to a maximum expenditure limit of $4 million. 8 Energy Sector Profile 2012 Human energy Some of the best and brightest people in the world have been attracted to Calgary because of Alberta’s economic growth and opportunity. As North America’s energy centre, the city has the highest concentration of engineers and engineering technologists in the country. Calgary’s employment is focused in the financial, scientific, technical, professional, engineering and high-tech service sectors that serve the energy industry, with much of Calgary’s employment growth focused in professional services.