Alberta
How natural gas supports one of Canada’s largest manufacturing sectors
Worker inspecting parts from plastic injection moulding machine in plastics factory. Getty Images photo
From the Canadian Energy Centre
‘When you think about the demand for more sustainable outcomes: clean air, clean water, clean energy, safe, nutritious, abundant food and electric vehicles, that’s more and more and more chemistry’
Canada’s chemical industry sold a record $72.7 billion of product last year amid recovery from COVID-19 and strong consumer demand, according to the Chemistry Industry Association of Canada (CIAC).
Natural gas is a key input to the chemistry sector, the broad term that refers to manufacturing a myriad of products used in everyday items from plastics to agriculture and pharmaceuticals.
“Chemistry products go into 95 per cent of finished goods. It’s an important sector,” says CIAC president Bob Masterson.
“It’s a sector that can grow as long as we fancy improving our lives and building a better world for tomorrow.”
Chemicals in Canada
Canada’s chemistry industry is the country’s fourth largest manufacturing sector by value of sales after food ($147 billion), transportation equipment ($119 billion), and petroleum/coal products ($118 billion).
It is primarily centered in Ontario, Alberta and Quebec.
The CIAC publishes an annual report on the sector’s activity using Statistics Canada data, separated into two categories: chemicals overall, and industrial chemicals.
Chemicals overall includes manufacturing of soaps, cleaning compounds, paints, coatings and adhesives, pesticides and fertilizers, pharmaceuticals, rubbers and synthetic fibres, and basic chemicals.
Industrial chemicals refers to the manufacturing of intermediate products used as inputs by industries including plastic and rubber products, forest products, transportation equipment, clothing, perfume and cosmetics, construction and pharmaceuticals.
Global Growth
According to Vantage Market Research, the global chemical market was valued at US$584 billion in 2022. It’s expected to grow by more than 55 per cent in the coming years to reach US$917 billion by 2030.
This isn’t just driven population growth, Masterson says.
“When you think about the demand for more sustainable outcomes: clean air, clean water, clean energy, safe, nutritious, abundant food and electric vehicles, that’s more and more and more chemistry,” he says.
“Some of the predictions are that the volumes of chemistry will double in the next 20 years. Canada and Alberta in particular are exceptionally well positioned to help meet future market demand for these products. The demand is not going away. There’s no question about that.”
Jobs
In 2022, Canada’s chemicals sector directly employed 90,800 people, or approximately the population size of Sudbury, Ontario. The industry paid about $7 billion in salary and wages.
That’s the direct impact of employment in the chemistry sector, but the CIAC estimates the full benefit to Canadians to be much higher as a result of indirect economic activity it supports.
CIAC estimates that every job in Canada’s chemistry sector creates another five indirect jobs in other parts of the economy. This means the sector supported 454,000 jobs across Canada in 2022.
Industrial chemicals alone directly employed 17,100 people and indirectly supported 85,600 jobs in the broader Canadian economy last year, the CIAC says.
Rising Trade
At a value of $72.7 billion, Canada’s overall chemical industry sales were their highest ever in 2022 – a 30 per cent increase compared to 2019, prior to the COVID-19 pandemic.
Industrial chemicals sales reached a record $34.2 billion, a 32 per cent increase compared to 2019.
Exports also increased last year, rising to a value of $52.8 billion compared to $45.9 billion in 2021. Of that, the sector exported $24.8 billion of industrial chemicals, up from $22.5 billion the previous year.
The United States is Canada’s main customer for chemical exports, representing 76 per cent of exports or $40.1 billion in 2022. The next largest export markets are China ($1.86 billion), the Netherlands ($1.7 billion), and the United Kingdom ($1.1 billion).
The Canada Advantage
Canada has distinct advantages as a chemical manufacturer and exporter including growing access to global markets, CIAC says.
In Alberta, the main advantage is access to low-cost natural gas resources – specifically valuable natural gas liquids like ethane, propane and butane.
“The rich abundance of natural gas liquids that come out of the ground when we drill for natural gas let Alberta be a low-cost chemistry producer despite being pretty much the only large chemistry industry worldwide that’s not on tidewater,” Masterson says.
Responsible Care
Since 1985, Canada’s chemistry industry has operated under an initiative called Responsible Care that encourages companies to innovate for safer and greener products.
CIAC reports that Responsible Care is now practiced in 73 countries and by 96 of the 100 largest chemical producers in the world.
Since 2005, CIAC members have reduced CO2 equivalent emissions by 13 per cent; reduced sulphur dioxide emissions by 94 per cent, and virtually eliminated large scale safety incidents. Since 2012, CIAC members have also reduced net water consumption by 13 per cent.
“We’re not standing in place,” Masterson says.
Alberta’s government has announced new steps to meaningfully act on the province’s ownership of its oil and gas resources and maximize resource revenue.
Alberta’s government will now collect bitumen royalties in-kind (BRIK) in addition to conventional royalties in-kind (CORIK), allowing the province to obtain the top price for oil resources and positioning Alberta as a potentially significant player in the global oil market.
The Alberta Petroleum Marketing Commission (APMC), Alberta’s commercial oil and gas agency, will now be able to combine conventional and bitumen royalty barrels to bring to market significant petroleum volumes that will spur private sector investments. This will give government the ability to seek new deals on Alberta’s energy resources internationally, making the province one of the largest global heavy oil market players and maximizing the return for Albertans.
On March 10, 2025, Premier Danielle Smith met with a global oil and petrochemical multinational to discuss a first-of-its-kind potential transaction that would see the overseas transport and sale of approximately two million barrels per month of Government of Alberta owned heavy oil via the APMC.
“This program gives the province greater say in where we sell our oil. Receiving bitumen royalties in-kind is another tool in our investment toolbox and will give us the opportunity to maximize our resource potential, become one of the most significant players in the heavy oil market and garner more value for Albertans.”
“Alberta and Canada have benefited greatly from the innovation and investment of our partners, the companies driving our energy industry. This move will allow us to promote increased pipeline capacity and grow our global markets, which is good for Albertans, for industry, and for global energy security.”
Given the significant volume of conventional and bitumen royalty barrels that will become available over time, the APMC will seek agreements with other jurisdictions and industry players to ensure Albertans benefit to the greatest extent possible from the ownership of their natural resources. This will help improve and diversify markets. The transportation of these barrels will help incentivize pipeline capacity growth in support of Alberta’s aspiration to double its oil and gas production.
“APMC will work diligently to seek commercially prudent deals that make sense for Albertans and the Alberta energy industry. The opportunity exists to find transactions that will directly and indirectly secure extra value for Albertans, and the experienced team at APMC is committed to doing just that.”
Faced with uncertainty around trade and security, Alberta’s government remains focused on diplomacy and continuing to build a resilient and diversified economy that is better positioned to withstand external shocks and ensure long-term prosperity.
Alberta
Former Chief Judge of Manitoba Proincial Court will lead investigation into AHS procurement process
Deputy Minister of Jobs, Economy and Trade Christopher McPherson has issued the following statement on an independent third-party investigation into procurement and contracting processes used by the Government of Alberta and Alberta Health Services (AHS):
Deputy Minister of Jobs, Economy and Trade Christopher McPherson has issued the following statement on an independent third-party investigation into procurement and contracting processes used by the Government of Alberta and Alberta Health Services (AHS):
“While serving as Acting Deputy Minister of Executive Council, Premier Danielle Smith asked me to establish a credible, independent, third-party investigation into the procurement processes used by the Government of Alberta and AHS and their outcomes.
“I have informed Premier Smith that the Honourable Raymond E. Wyant, former Chief Judge of the Provincial Court of Manitoba, will lead this investigation. I asked Premier Smith to issue a ministerial order to facilitate his work and she has done so. Judge Wyant’s work on this matter begins immediately.
“Judge Wyant was appointed to the Manitoba bench in 1998 before becoming Chief Judge in 2002. Prior to his service on the bench, Judge Wyant worked as a criminal defence lawyer and Crown attorney and was acting deputy director of Manitoba prosecutions at the time of his appointment to the Bench. He has also taught law for many years at Robson Hall at the University of Manitoba.
“Judge Wyant will review the relevant legislation, regulations and policies related to procurement typically used by Government of Alberta departments and agencies, specifically AHS, and their application to the procurement of pharmaceuticals and to services offered by chartered surgical facilities. Questions that Judge Wyant will consider are outlined in the attached terms of reference, and include whether or not any elected official, Government of Alberta or AHS employee, or other individuals, acted improperly during the procurement processes. Judge Wyant will make recommendations to the government for improvement or further action as appropriate.
“Appointed under the Government Organization Act, Judge Wyant will operate independently of government. The Government of Alberta will provide Judge Wyant with access to all relevant documents held by its departments and AHS, as well as facilitate interviews with relevant individuals.
“Judge Wyant has been given a budget of $500,000 to undertake this important work, including to retain legal and audit assistance at his discretion. He is being paid $31,900 per month, which is the same remuneration rate as the Chief Justice of the Alberta Court of Justice.
“To ensure additional independence, Service Alberta and Red Tape Reduction will hold the budget for this third-party investigation.
“Judge Wyant will deliver an interim written report by May 30, 2025. A final written report and recommendations will be delivered by June 30, 2025, and it will be posted on alberta.ca.”
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