Oil and natural gas constitute more than two-thirds of Canada’s primary energy supply, with nuclear and hydraulic electricity, as well as coal, providing most of the rest (Figure 3.1). Over the past 20 years, the share of coal has decreased, mainly owing to its phase-out in Ontario’s electricity generation, largely compensated by an increased use of natural gas, often directly resulting from coal’s decline. Renewables outside of hydroelectricity, in particular wind and biofuels,1 have played an increasing but still marginal role in the total supply.2 These changes have been accompanied by an overall 20% increase in the supply, with fossil fuels retaining their share of the total.
Figure 3.1 – Domestic primary energy supply, 1999-2019 #
Canadian transportation and industrial sectors each make up about one-third of the country’s total final energy demand (Figure 3.2), with the building sector (residential, commercial and institutional) constituting most of the rest. The importance of energy production, mostly oil and gas, as well as refining is illustrated by the fact that 20.9% of the total net supply is used in producer consumption (where the energy producing industry uses its own produced fuel) and non-energy use (e.g., feedstocks used by the petrochemical industry). Given the high carbon intensity of their activities, energy producers’ consumption occupies a key role in discussions on GHG emission reductions.
Figure 3.2 – Net supply of energy (primary and secondary) by sector #
This section uses both a 20-year and a 10-year horizon to analyze long-term and shorter-term variations.3 The industrial sector represents the largest share of energy use nationwide. Sub-sector variation is shown in Figure 3.3. Although the industrial sector as a whole saw its consumption increase by 24.7% from 1998 to 2018, this increase varies substantially. Notably, the mining sector (including oil and gas extraction) recorded a 224% increase over the entire period, reflecting its rapid expansion and the central role these activities play in the economies of some provinces, as well as their overall weight in the national economy.
In contrast, decreases were observed in the pulp and paper (-29.6%), other manufacturing (-10.1%), petroleum refining (-19.9%), and iron and steel (-5.2%) sectors. While some of these reductions can be explained by efficiency improvements, a number of closures also had an impact.
Figure 3.3 – Industrial energy use by industry (1998, 2008 and 2018) #
Consumption in the transport (Figure 3.4) sector is dominated by gasoline (57.0%), diesel (29.2%) and aviation turbo fuel (11.7%). Important differences emerge when distinguishing passenger from freight transport, both in the type of fuel used and in the energy intensity changes over the past two decades. While gasoline powered 73.5% of passenger transport, diesel remained marginal (3.9%). In contrast, diesel is the dominant fuel in freight transport (63.8%), compared with gasoline at 32.0%.
Figure 3.4 – Energy use in transportation, by source (2018) #
Table 3.1 – Demand for transportation services #
From 1998 to 2018, passenger transport increased by 48.8% or 21.0% on a per capita basis (Table 3.1), with growth being more rapid after 2008. During that same period, the increase in freight transport was 45.3% or 18.2% per capita. Despite a modest slow-down in growth in freight transport in the second half of the period examined, these increases continue to demonstrate how energy efficiency improvements in passenger transport are offset by increasing numbers of kilometres travelled by individuals, a situation that is even more drastic for freight transport where limited efficiency improvements have been realized. This is a consequence of historically low energy prices and Canada’s geography.
The profile of the building sector, which encompasses residential as well as commercial and institutional (C&I) consumption, is quite different. In the C&I sector (Figure 3.5), natural gas provides 49.0% of the energy used, with electricity in second place at 45.9%. Light fuel oil, kerosene, coal, propane, and other fuel provide the rest. Auxiliary equipment (16.2% of total consumption) is the fastest growing energy end-use (+199.1% from 1998 to 2018), while space heating remains by far the most important source of demand (53.2%). Lighting comes in third place (14.5%), with water heating, space cooling, auxiliary motors, and street lighting accounting for the rest of demand for the sector. While growth in floor space (+35.4% from 1998 to 2018) contributed to the increase in energy use, the importance of auxiliary equipment was also a significant driver, resulting in a 44.8% rise in total energy use for the sector from 1998 to 2018.
Figure 3.5 – Commercial and institutional energy use by end-use (1998, 2008 and 2018) #
Residential energy use (Figure 3.6) presents a different profile despite some similarities with commercial space. Space heating is also the main driver of energy use (64.0%), with water heating (17.4%), appliances (13.0%), lighting (3.3%) and space cooling (2.3%) accounting for the rest. These percentages have largely remained stable over the past 20 years, although space cooling doubled its modest share of the total.
The period split highlights other important differences as well. Growth in energy use has been modest after 2008, following a period of much more rapid growth from 1998 to 2008 (+12.5%). This trend reflects improvements in energy efficiency for space heating in particular, as is indicated in Figure 3.5.
Figure 3.6 also shows that natural gas is the main source of energy for the two main end-uses (space and water heating), with electricity in second place. Wood also remains important in space heating (15.9%), while heating oil accounts for 5.1%, after more than halving its share from 1998 to 2018.
Figure 3.6 – Residential energy use by end-use (1998, 2008 and 2018) #
With the smallest share of total final demand, the agricultural sector chiefly consumes a mix of diesel (50.8%), gasoline (17.3%), natural gas (13.5%) and electricity (11.6%). A closer look at the sector shows why aggregate sectoral profiles must be treated with care: in late 2019, the CN Rail strike led to shortages of propane, threatening economic hardship and wasted crops for corn farmers in some parts of the country. For many, since propane is the only source of energy to dry crops for storage, this subsector has limited resilience in the event of a propane shortage. This example illustrates how the limited availability of energy substitutes for some specific end uses can gravely expose specific economic sectors, even if the source of energy used is a small share of their total needs.
1 Due to data availability issues, Figure 3.1 does not display biomass supply. Solid biomass (mainly wood products) supply was 487 PJ in 2017, while biofuels (ethanol and biodiesel) added another 48 PJ. Solid biomass production has remained fairly constant over the past 20 years, whereas biofuels production has increased steadily (NRCAN 2021).
2 Data availability does not allow for the distinction of hydroelectricity and nuclear from other renewables on this chart. Chapter 2 provides more information on the breakdown of electricity production by source.
3 Due to data availability, some charts and tables use 2018 as the year with most recent data, while others use 2019.