Canada risks becoming a “banana republic” for its restrictive energy policy and failure to attract new investment into the sector, according to a Calgary money manager.

“We have had basically signs on our energy industry that Canada is closed for business,” Geeta Sankappanavar, co-founder of Grafton Asset Management, said Thursday at the Bloomberg Canadian Capital Markets conference in London. “Today we are in danger of becoming unfortunately a little bit like a banana republic on the energy side.”

Sankappanavar, who says her firm has raised and deployed $1 billion in the Alberta oil patch, blamed carbon taxes, falling oil prices and increased regulatory scrutiny under new federal government rules for contributing to what she calls an “awful” malaise in the sector.

“It is a very, very dark and bleak place,” she said. “We have had significant regulatory and political challenges in our industry.”

‘Wasting our time’

The money manager sees some room for optimism following the approval this week of the Trans Mountain pipeline expansion that would almost triple capacity on a line taking oil from Alberta to the Pacific Coast near Vancouver. More needs to be done, she said.

“We are wasting our time” and at risk of becoming “violinists on the Titanic,” she said.

Sankappanavar said Canada does offer some opportunities as a “deep value” play given the decline in asset values. The industry also needs to do a better job promoting the progress it’s made in reducing relative emissions and investing in renewable energy.

“Canada has a brand issue,” she said.

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