Spin-Off Benefits of Oil and Gas Activity
Newfoundland and Labrador’s oil and natural gas industry provides employment opportunities for thousands — about 3,000 direct jobs and up to an additional 20,000 indirect jobs.
The industry also supports hundreds of supply and service companies. Cumulative industry expenditures to date total more than $50 billion.
The industry has also paid more than $24 billion to the Government of Newfoundland and Labrador through royalties and corporate income tax. This translates into funding for social programs, hospitals and schools.
Benefits Don’t Stop There
But the benefits do not stop there. Higher-paying jobs in the oil and gas industry mean higher spending in communities, leading to busier restaurants, hotels and retail. It also means more employment overall in the province.
A 2021 Atlantic Provinces Economic Council (APEC) report titled Challenges and Prospects for Newfoundland and Labrador’s Economy notes that for every direct job in the oil and gas industry, 1.3 indirect jobs are created.
The report notes that offshore oil is the largest contributor to economic prosperity in Newfoundland and Labrador (NL) generating significant spin-off activities in transportation, professional services, construction and manufacturing, housing and hospitality and other areas.
The industry also supports innovation and skills development. Offshore operators have invested more than $600 billion on research, development, education and training in the province. As production from existing offshore developments naturally declines, continued health of the industry will depend on investment in new developments.