Article content continued

Making matters worse, governments openly threaten to oppose infrastructure projects

These problems are long-standing and not, to put it mildly, easily addressed. The former Conservative government of Stephen Harper struggled with these challenges and was not able to ensure as many energy projects were completed as it would have liked, even as they were criticized by their political opponents for sounding overly gung-ho. Now, instead of treating this as the urgent national issue that it is, the Justin Trudeau Liberals seem set on making the problem worse. Not only have the existing problems not been addressed, the Liberals seem intent on compounding the accumulated disadvantages that serve to make Canada less competitive.

As noted recently by the National Post’s John Ivison, Ottawa is pushing ahead with a series of steps that can only serve to spook would-be energy investors. Changes to the already tortuous environmental assessment process seem aimed more at earning the ever-elusive “social licence” and placating Indigenous concerns than streamlining the process into something robust but also timely. Energy investors must now contend with incoming carbon taxes, increased federal fees, uncertainty over regulatory requirements and high Canadian electricity costs. On top of that, the government has made Canada even less attractive to highly skilled workers and entrepreneurs by ratcheting up the tax burden on larger incomes.

There are now between 40 and 50 different policy and regulatory initiatives underway that could adversely impact industry

Petronas is not the only company deciding against putting more money into this increasingly hostile investment environment. A 2015 report by the Canadian Association of Petroleum Producers notes that investment in our energy sector is down by $29 billion, or 40 per cent, from 2014. Some of that was certainly due to reduced oil prices, but a 2017 CAPP report also highlights the grim fact that there are now “between 40 and 50 different policy and regulatory initiatives currently underway by provincial and federal governments in Canada that have the potential to adversely impact the industry.” When these billions are invested elsewhere, they are lost to our workers, our economy and our tax base.

Canada is blessed with an abundance of natural resources and a highly skilled workforce. We will not profit from these advantages, though, if investors are not confident that the upsides of investing here will exceed the risks. Government has a key role to play in ensuring Canada is a place that attracts capital and jobs. This requires it to exercise leadership in selling the public on the importance of investment, and having the sense to know when to get out of the way.

National Post