Oilsands expansion leads Canada to fastest GDP growth in nearly 2 decades

Canada's economy grew at its fastest pace in nearly two decades in May, led by expansion in the oil and gas sector.

That's according to the latest GDP data from Statistics Canada, released Friday, which shows a 7.6 per cent growth in oil and gas extraction.

• Canada's GDP expanded by 4.6% in the year up to May, strongest pace in 17 years

Non-conventional extraction the sector which includes Alberta's oilsands grew the fastest, expanding by 13 per cent in May.

Conventional extraction, by comparison, grew by 3.2 per cent.

The rebound in non-conventional extraction caught many analysts by surprise, as growth in the oilsands sector, alone, accounted for roughlyhalf of the national GDP increase.

"Most of the growth is still being driven off the oil price, and the biggest boost this year has been the fact that the oil price is near $50," JackieForrest, director of research withARC Energy Research Institute, toldCBC'sOn The Money.

"[That] combined with a lot of innovation has allowed new drilling to happen. This year on the non-oilsands side we're actually expecting about a 40 per cent improvement in the wells drilled compared to last year.

"At the same time, on the oilsands side, we're still building those megaprojects that were approved when oil was at $100, and that's also contributing to the economy."

The recent expansion comes after a series of setbacks for the sector.

Oilsandsoperations were hit hard in May 2016 by the devastating Fort McMurray wildfire, which caused production levels to temporarily plunge.

Then, this past March, amajor Syncrude upgraderwas knocked offlineby an explosion and fire.

Questions remain about future growth in the the sector, however, as oilsands developers have abandoned nearly a million hectares of exploration leases over the past two years.

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