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Investment in Canada’s oilsands is forecast to grow for the first time since prices crashed in 2014.

Capital spending in the the world’s third-largest crude reserves is projected to rise 8.4 per cent to $11.6 billion (US$8.8 billion) this year, according to the Canadian Association of Petroleum Producers, the industry’s main lobbying group.

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The forecast signals a tentative return of optimism to the oilsands, where pipeline bottlenecks and environmental opposition made expansion difficult even after oil prices rebounded in recent years. CAPP attributes the expected gain to tax cuts implemented by Alberta’s new government, an easing of the province’s output limits and efforts in neighbouring Saskatchewan to boost output.

“It has been a tough five years, and Canada has not fared well at a time when global demand continues to rise,” CAPP Chief Executive Officer Tim McMillan said in an interview. “It has taken some hard work, especially at the provincial level, to change the global view and put Canada back in a position where it can start to attract appropriate levels of capital again.”