Oil and gas extraction capital expenditures on the rise

Capital expenditures for the oil and gas extraction industries, including exploration and evaluation in Canada, rose 23.5 percent from the fourth quarter of 2016 to $12.1 billion in the fourth quarter of 2017.

Click to enlarge route of Trans Mountain pipeline

For the full year, capital spending totalled $43.0 billion in 2017, up 13.0 percent over 2016, according to Statistics Canada.

Capital expenditures also rose 3 percent from the first quarter of 2017 to $10.6 billion in the first quarter of 2018, the fifth consecutive quarterly year-to-year increase.

The increased expenditure numbers for 2018 were released in the wake of the federal government announcement to purchase the Trans Mountain pipeline project from Kinder Morgan Canada for $4.5 billion through an Export Development Canada loan.

The intervention by Ottawa is the largest since 2009, when federal and Ontario governments advanced more than $13.3 billion to Chrysler and General Motors during the global financial crisis.