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 and negatively affecting the country’s ability to attract the capital needed to create jobs and national prosperity, claimed a report from Industry body Canadian Association of Petroleum Producers (CAPP).
The oil and natural gas lobby group said, around the world capital investment in the oil and natural gas sector increased in 2017, but was down in Canada. Total capital spending on Canadian oil and natural gas was $45 billion in 2017, down 19 per cent from 2016 and 46 per cent from 2014. In comparison, capital spending on oil and natural gas in the United States last year increased by 38 per cent to $120 billion. It’s taken Canada 150 years to grow its oil and natural gas production to current levels and only eight years for the U.S. to accomplish the same.
The CAPP said, 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 in 2015 and 533,000 jobs across the nation in 2017.
According to International Energy Agency (IEA) forecasts that 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. Citing this, CAPP asked the government to establish a four-part vision for the oil and natural gas sector including – global connection for Canada’s oil and natural gas resources; Globally competitive policies that increase the country’s ability to attract capital; climate plan must be comparable to other jurisdictions; government policies must spur and accelerate innovation and technology in the oil and natural gas sector.