The industry's main association says spending on major projects is forecast to drop to $31 billion in 2016.
That's down $50 billion or 62 per cent since 2014, when the industry set a record of $81 billion.
The Canadian Association of Petroleum Producers says that's the biggest drop in records going back to 1947.
"The world will require responsibly produced energy for a long time to come."
CAPP's members produce about 90 per cent of Canada's natural gas and crude oil. Prices for crude have plunged worldwide since late 2014 due to a prolonged oversupply amid soft economic growth and a political push to use less fossil fuels.
The association's president is calling for Canada, as a country, to take action so the industry can compete globally.
"Times are tough today in Canada's oil and natural gas sector, but the world will require responsibly produced energy for a long time to come," said Tim McMillan, CAPP president and chief executive officer.
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