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Chemicals

Canada’s Chemicals Sector

Good chemistry for investors

Searching for the perfect formula for profitability? Canada has all the key ingredients, as global leaders in the chemicals industry already know. Nine of the top 10 chemical companies in the world have production facilities in Canada to take advantage of its dynamic business environment, low tax rates and business costs, skilled workforce and ready reserves of competitively-priced feedstock. Large and efficient extracting plants, modern ethylene crackers and some of the world’s largest derivative plants that enable Canada to achieve economies of scale are further enticements for investment.

The Canadian chemical industry is one of the largest manufacturing sectors in the country – the third largest manufacturing exporter in the country – employing 78,000 workers at almost 3,000 firms. With northern natural gas pipelines and off-shore resource development in the offing, the sector’s future promises even greater rewards for savvy investors who get in on the ground floor.

Look what Canada has to offer

  • Chemicals shipments worth $50.6 billion in 2008, with exports of $32 billion – 76% to the U.S.
  • Chemicals exports more than doubled in the last decade
  • R&D expenditures in the sector were $197 million in 2007
  • Highly-productive, highly-educated workforce
  • #1 in the G7 for quality of life

Proven formula for success

Synthetic Resins

Canadian exports of synthetic resins have grown dramatically, from 38 percent of total shipments in 1990 to 79 percent in 2008. The Canadian synthetic resins industry had shipments of $9.0 billion in 2008, and employed about 6,330 people at 163 establishments. Of total exports, 83% are destined for the U.S. Canada’s increasing presence in the marketplace is a tribute to up-to-date process and product technologies utilized by the industry. Much of the sector’s new capacity uses state-of-the-art technology. For example, Dow Chemical's new plant in Alberta uses its metallocene technology while NOVA's new plant in the province capitalizes on its Advanced Sclairtech technology, which was developed in Canada. A major attraction for investors is the region’s raw material advantage due to its vast energy reserves, as well as lower salaries and higher level of output per employee than the U.S.

Petrochemicals

With shipments of $6.6 billion in 2008, the Canadian petrochemical industry is one of the largest sub-sectors of the chemicals industry. Exports of petrochemicals in 2008 were $2.9 billion compared to imports of $1.1 billion for a strong trade surplus. Some 1,280 people are employed in 18 manufacturing plants, owned primarily by major foreign multinationals. NOVA Chemicals is the largest producer headquartered in Canada. The petrochemical industry has a very high level of output per employee, reflecting the capital intensiveness of the sector and a highly-skilled workforce. Ethylene is the principal product made in Canada, which is used to make derivatives including ethylene oxide, ethylene glycol, and polymerized to synthetic resins including polyethylene and polystyrene.

Organic chemicals

Biotechnology innovations are creating commercially produced organic chemicals from biomass feedstocks such as corn, soy and wheat and biowaste. Canada is poised to become a key player in the sector thanks to its assured supply of resources provided by the country’s enormous agricultural and forestry industries.

Competitive clusters

Canada’s chemicals industry is concentrated in three regions of the country – Ontario, Québec and Alberta – each with distinct strengths and advantages. Central Canada is the largest chemical producer, leading petroleum-refining region, hub of the nation’s plastics industry and home to seven of the 10 largest chemical companies, while Western Canada is the site of the largest petrochemical manufacturing industry in the country. These hubs are supported by a strong research infrastructure that nurtures innovation and the world’s best-educated population.

Sarnia
Canada’s largest cluster of chemical, allied manufacturing and R&D facilities is located in this Canada-U.S. border community. The region offers well-developed infrastructure for petrochemical production, providing large underground salt storage caverns, nearby petroleum refineries, access to NGL feedstocks, a tanker terminal for offshore shipments, excellent transportation networks, and access to crude oil and oil-based liquids. The world’s major players have operations here, including Dow Chemical Canada Inc., Imperial Oil (ExxonMobil), INVISTA, NOVA Chemicals Corporation and Shell Canada.

Toronto
The business and financial centre of Canada, Toronto has attracted industry leaders such as Bayer, BASF, DuPont Canada and Unilever which have selected the city for their corporate headquarters. The region is also home to a variety of chemical companies that produce lubricants, paints, medical gases, laundry detergents, adhesives and more.

Montréal
Montréal’s integrated petrochemical cluster offers petroleum refineries, a tanker terminal for ocean shipments and direct access to the large eastern and central U.S. and Canadian markets. New investments in recent years have seen the development of an aromatics value chain. The city hosts some 30 businesses active in primary petrochemical products, olefins and aromatics. The region’s vast supply of diverse and relatively inexpensive energy sources gives these companies a competitive edge in the chemicals industry.

Edmonton
Edmonton, and its surrounding region, is home to an integrated upgrading, refining and petrochemical complex and the country’s largest petrochemical manufacturing sector. The industry employs more than 7,700 people and is home to two of the largest petrochemical plants in the world. The industrial chemicals industry – composed of petrochemicals, fertilizers, inorganic chemicals and specialty and fine chemicals – had shipments of $10.7 billion and exports of $6.2 billion in 2007. There have been substantial increases in production capacity for ethylene, polyethylene, ethylene glycol and linear olefins. Access to abundant natural gas stores and the prospect of even greater supplies as oil sands reserves are refined into petroleum products position the area to become one of the largest and most competitive chemical producing regions on the planet.