TORONTO — Canadian economic growth could be shaved by a third of a percentage point in the current quarter by the shutdown of a major oilsands project in northern Alberta, says an economic report by CIBC.
The big bank said Thursday the gross domestic product for the January-March first quarter could be “negatively impacted” by the shutdown of the Horizon mine and refining upgrader.
“The production disruption, now set to last through February and March, could reduce crude oil output by around 100,000 barrels a day, a decrease of roughly three per cent of total Canadian crude oil production,” the bank said in its report.
That shutdown could shave a tenth of a percentage point off GDP growth in February, given the rising share of oil and gas production to the Canadian economy. And with the delay set to stretch into late March as well, output for that month could also be held back.
CIBC said that for the first quarter as a whole, the production cuts could reduce around 0.3 per cent from the annualized GDP rate.
Even with that loss, the bank still expects the first quarter growth rate to be slightly higher than two per cent, compared to the 1.7 per cent expansion in the 2011 fourth quarter.
Earlier this week, Canadian Natural Resources said the Horizon oilsands mine won’t return to full production until mid-to-late March as upgrader repairs will take longer than expected.
Output at Horizon has been suspended since Feb. 5 for repairs to the upgrader, which processes thick, sticky bitumen from the oilsands into a type of crude refineries can handle.
More than a year ago, an explosion badly damaged the upgrader at the mine north of Fort McMurray.
Five workers were injured.
Canadian Natural is one of Canada’s biggest oil and natural gas producers, with the bulk of its operations in Western Canada.
It also has holdings in the U.K. portion of the North Sea and off the coast of West Africa.
In the oilsands, Canadian Natural is planning a second phase to Horizon and a new steam-driven oilsands project at Kirby, Alta.