Rising government costs, the burden of inefficient regulations, and the lack of infrastructure to move Canadian energy to growing markets are all undermining investor confidence in Canada. That’s according to a just release report by the Canadian Association of Petroleum Producers (CAPP) called A Global Vision for Canadian Oil and Natural Gas.
“Across Canada, government costs and regulatory barriers are on the rise,” says CAPP president and CEO Tim McMillan. “Canada is falling behind other countries in attracting oil and natural gas investment.”
The report finds that around the world, capital investment in the oil and natural gas sector increased globally in 2017, but was down in Canada.
“Falling investment makes it harder to grow our industry and create and support jobs for Canadians,” notes McMillan. “Energy jobs and investment will leave Canada for other countries unless there are changes to encourage growth the industry can build on.”
CAPP’s report notes that capital investment in Canada’s energy sector generates economic activity across the country, spurring job creation and growth for all levels of government – including about $19 billion in annual government revenues and 640,000 jobs across the nation in 2015.
As well, international forecasts call for growing demand for all forms of energy, including oil and natural gas (IEA, 2017). Although renewable energy is on the rise, oil and natural gas will continue to make up the largest part of the total energy mix with increased urbanization and population growth, accounting for 52 per cent of the total energy demand by 2040.
CAPP notes that in combination with Canada’s world-class energy resources, rising global energy demand represents an opportunity for Canada to become a sustainable supplier of choice—provided it can overcome its competitiveness challenges.
The CAPP economic report—which is the first in a series scheduled for release throughout 2018—establishes a 4-part vision for an oil and natural gas sector that can thrive in a lower-carbon economy:
- Global connection for Canada’s oil and natural gas resources is essential.
- Globally competitive policies that increase the country’s ability to attract capital needed to create jobs and national prosperity.
- Any climate leadership plan must be comparable to other jurisdictions competing for the same global capital.
- Government policies must spur and accelerate innovation and technology in the oil and natural gas sector.
“In Canada we need pipelines—not barricades—to supply the world with more Canadian energy,” says McMillan. “Also, we operate in one of the world’s most stringent operating environments. It’s important that we have a robust regulatory framework that meets environmental goals, but not one that creates additional costs, delays and inefficiencies.”
“We want to see governments at all levels take real steps to attract investment, create jobs and build prosperity across the country.”