Summary Report of Energy Use
in the Canadian Manufacturing
Sector, 1995-2010
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6. Conclusion
After a difficult year in 2009, Canada’s manufacturing sector began a comeback in 2010 with widespread growth and the reversal of many downward trends. The global economy also rebounded in 2010 with most major economies showing positive growth in gross domestic product (GDP). This followed one of the worst recessions in years.
According to Statistics Canada,29 “Manufacturing sales increased 8.9 percent to $529.8 billion in 2010 after a 17.8 percent decline in 2009. This was the largest single annual increase since 2000. The Manufacturing sector regained about 40 percent of the 2009 decline, which was the largest on record. Current dollar sales advanced in 19 of 21 industries, representing 95.4 percent of total Canadian Manufacturing.”
As stated in the Canadian Manufacturing Online and the Canadian PLANT survey results,30 a source of daily industry-focused news in Canada, “the last three years have not been easy for Canadian manufacturers. They’ve taken some hard knocks from waves of the perfect storm, whipped up by the high value of the dollar, chronic skills shortages, aggressive offshore competition, depressed markets, a disabled US economy, recurring rounds of Buy Americanism and potential global apocalypse. And yet, when they were asked about their prospects for 2012 and beyond, for the third consecutive year they expressed confidence and optimism. Indeed, PLANT’s Business Outlook 2012 survey found manufacturers loosening the purse strings and investing in their plants.”
In addition, according to the ISO,31 “individual organizations cannot control energy prices, government policies or the global economy, but they can improve the way they manage energy in the here and now. Improved energy performance can provide rapid benefits for an organization by maximizing the use of its energy sources and energy-related assets, thus reducing both energy cost and consumption. The organization will also make positive contributions toward reducing depletion of energy resources and mitigating worldwide effects of energy use, such as global warming.”32
This summary report examines energy consumption patterns for the Canadian Manufacturing sector from 1995 to 2010 and, in particular, those of the seven most energy-consuming subsectors, namely:
- Paper Manufacturing (NAICS 322)
- Primary Metal Manufacturing (NAICS 331)
- Petroleum and Coal Product Manufacturing (NAICS 324)
- Chemical Manufacturing (NAICS 325)
- Wood Product Manufacturing (NAICS 321)
- Food Manufacturing (NAICS 311) and
- Non-Metallic Mineral Product Manufacturing (NAICS 327)
According to the 2010 ICE survey, Canada’s Manufacturing sector used 14.3 percent less energy and produced 11.0 percent more output in 2010 than it did in 1995. In 2010, the sector consumed 2136 PJ of energy (down from 2492 PJ in 1995), and its output increased to $155.7 billion (up from $140.3 billion in 1995). The largest decrease in energy consumption among the subsectors from 1995 to 2010 occurred in the Paper Manufacturing subsector (39.3 percent). It was also the only subsector that experienced a decrease in GDP (16.9 percent) during that period.
As a result of decreased energy use and increased output from 1995 to 2010, the sector’s overall energy intensity declined 23 percent, from 17.8 megajoules per dollar of GDP (MJ/$GDP) to 13.7 MJ/$GDP. All seven selected subsectors experienced a decrease in energy intensity over the period, but significant decreases were realized for the Non-Metallic Mineral Product Manufacturing subsector (47.2 percent), the Paper Manufacturing subsector (27.0 percent) and the Primary Metal Manufacturing subsector (23 percent).
The rate of capacity use in the Manufacturing sector has been on an upward trend since the second quarter of 2009, when it reached a record low of 69.4 percent. Among manufacturing industries, annual capacity use strengthened to 77.1 percent in 2010, from 70.9 percent in 2009 and 74.9 percent in 2008. Capacity use rose in 18 of the 21 major manufacturing industries in the first quarter of 2011.
Electricity has replaced natural gas as the most used energy source since 2003. The rapid growth in the price of natural gas compared with that of electricity between 1996 and 2006 may help explain this energy source shift, which, in turn, influenced the Manufacturing sector’s fuel mix. However, the gap between both of these energy sources narrowed over the last four years, with the price of natural gas dropping.The use of both heavy fuel oil and spent pulping liquor decreased substantially from 1995 to 2010 (68.3 percent and 40.9 percent, respectively), both heavily used by the Paper Manufacturing subsector. A full breakdown of the energy consumption by energy source for the sector and seven selected subsectors can be found in Appendix A.
29 Statistics Canada, The Daily, June 2011, www.statcan.gc.ca/daily-quotidien/110620/dq110620b-eng.htm
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30 Canadian PLANT, Insights and Strategies for Industry Leaders, www.grantthornton.ca/resources/insights/reports/Canadian_manufacturing_outlook_survey_2011.pdf.
31 International Organization for Standardization. ISO 50001 provides organizations with a structured framework to manage energy such that it can increase energy efficiency, reduce costs and improve energy performance. It is a standard based on the common elements found in all of ISO’s management systems standards, assuring a high level of compatibility with ISO 9001 (quality management) and ISO 14001 (environmental management). It integrates energy efficiency into management practices by making better use of existing energy-consuming processes.
32 International Standards for Business, Government and Society, 2011, www.iso.org/iso/pressrelease.htm?refid=Ref1434