How important are natural resources to the Quebec economy? Does developing our mines, forests and hydroelectric power lead to greater prosperity?

Or should we turn instead to a knowledge-based economy rather than betting on the hewing of wood and drawing of water?

Those are some of the questions raised by the second in a series of studies on Quebec prosperity produced by the Conseil du patronat, representing large employers in the province.

Quebec is richly endowed with natural wealth, with 25 per cent of North America’s hydro power, three per cent of the world’s fresh water resources and numerous mineral deposits. Close to half its territory is covered by forest.

That’s not even considering the potential of hydrocarbon deposits in the Gaspé peninsula, off Anticosti Island or in the lower St. Lawrence Valley.

The question is whether it’s possible to develop its resources in ways that pay off for the whole economy and that respect environmental concerns.

If we’re just taking stuff out of the ground and shipping it out of the province with little extra employment, no value added and a big mess to clean up afterwards — well, no thanks.

To be sure, we already get a significant spinoff from resource development.

Hydro-Québec is a major investor and employer in this province each year. It accounts for four per cent of the provincial economy, 20,000 jobs, annual investments of around $4 billion and more than $3 billion in dividends and royalties to the provincial government.

Forest products account for a lot of economic activity, too, once they are turned into lumber, pulp and paper and other export goods, with business volume of $15.7 billion last year, 61,000 direct jobs and 100,000 indirect ones. Much of that production is tied to the U.S. market.

Mining is important, as well, although a lot more cyclical as it rides the ups and downs of the global economy. Last year, Quebec’s mineral shipments reached a record $8.7 billion and provided 88,000 jobs despite an uncertain global outlook.

The real issue for the future is whether to go ahead with oil and gas exploration and production. Federal estimates put potential reserves in the Gulf of St. Lawrence and neighbouring regions at 39 billion cubic feet of gas and 1.5-to-2 billion barrels of oil — enough to meet Quebec’s needs for 20 years.

While two moratoriums are in place on petroleum development, it’s time for a broader debate on the subject.

Like a lot of other jurisdictions, Quebec is looking for ways to reduce petroleum consumption as part of its climate-change response. Still, it’s going to continue to require oil and gas for a large part of its transportation and energy needs, so being self-sufficient has a clear benefit — as long as it can be done cleanly.

This could be a much better choice than importing petroleum from nations with a terrible environmental and human rights record. And it could provide a significant boost to economic activity, tax revenue and private-sector expertise.

One government estimate puts the potential returns in royalties and income taxes from production at Anticosti Island at $45 billion over 30 years. “This kind of revenue would certainly contribute to reducing the public debt of Quebec, the fiscal burden of Quebecers and the financing of essential services,” notes the CPQ.

Resources currently remain a relatively small part of the overall economy, dominated by the service sector. In 2013, they accounted for just under 11 per cent of Quebec’s Gross Domestic Product.

But their importance to trade is disproportionate, accounting for 42 per cent of international exports and earning a return that isn’t available in the domestic economy.

And the resource sector does generate prosperity if you look at a measure like economic value per worker. GDP per worker in Quebec in 2013 was $88,200 overall but it was $102,200 in the forest industry and $154,400 in mining.

That makes resource activity a very productive part of the economy. The provincial economies in Canada that punch above their demographic weight are those with a big stake in resource development.