Canada has been partly insulated from the sharp drop in oil prices because so much of the energy sector is foreign owned, says an internal Finance Canada document.
The Feb. 20 memo says up to half of Canada's oil and gas sector is owned by foreign investors, higher than reported by Statistics Canada using different calculations.
Statistics Canada reported in December that about 37% of Canada's oil and gas extraction sector was under foreign control in 2012, or about $206 billion of the $563-billion total. But the agency uses a method that ignores who owns shares in widely held Canadian energy companies.
By estimating the number of foreign stockholders, and adding them to foreign owned or controlled firms, Finance Canada economists suggest that between 40% to 50% of the energy sector is in non-Canadian hands.
A spokesman for Finance Canada confirmed that the analysis was to help assess how the collapse in oil prices last year affected the economy.
"The analysis was conducted in order to help understand the impact of the fall in oil prices," David Barnabe said in an email, adding the calculation should not be compared with Statistics Canada's conclusions on foreign-ownership levels.
"There is no discrepancy with the Statistics Canada data," he said. "Those data were not addressing the same issue as was being analyzed in the note; rather they were an input into it."
New Democrat Finance Critic Nathan Cullen said the Harper government has previously argued that the energy sector was the engine of the Canadian economy, yet now appears to be playing down its importance.
The higher foreign ownership level suggested by Finance Canada also help explains why there's so little value-added activity in Canada's energy sector, he said.
The rookie NDP government of Alberta Premier Rachel Notley has signaled its interest in more value-added activity for the oil patch. And her new chief of staff, party heavyweight Brian Topp, has previously raised concerns about foreign ownership of Canada's natural resources, citing China, Brazil and the United States as competitors.
