The association representing oil and gas companies in Canada says the Alberta government needs to take action to close the competitiveness gap in the industry if it wants to be the global energy supplier of choice.
“Market access is a key factor driving industry competitiveness, but it is only one part of the equation. We need government to address the policy and regulatory challenges that make Alberta less competitive compared to other jurisdictions,” said Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers.
“In order to improve competitiveness we need to streamline the regulatory process by reducing timelines, modernizing our current regulations and improving efficiency.”
CAPP has released the report Update: A Competitive Policy and Regulatory Framework for Alberta’s Upstream Oil and Natural Gas Industry. It said Alberta can be a leader if the province improves regulatory efficiency and certainty, effectively implements climate policies that mitigate trade exposure and encourage innovation, and strengthens fiscal terms.
At a time when energy demand and capital spending is increasing globally, total investment in Canada’s oil and natural gas sector is expected to fall to $42 billion in 2018 from $81 billion in 2014, and total annual spending in the oil sands dropping for a fourth consecutive year, said CAPP.
It said investor confidence continues to remain low due to a number of factors such as market dynamics and commodity price trends; market access challenges; regulatory complexity and uncertainty; fiscal policy (including tax reforms in the United States); and the rising cost of doing business in Canada (including regulatory costs).
“Canada is a global leader with a system of strong environmental standards and regulations. We have a high-quality product and should be the supplier of choice to meet increasing future energy demand,” said McMillan.
“The U.S. is making tax reforms while the combined federal and provincial corporate taxes in Alberta have increased to 27 per cent, putting us at a significant disadvantage to our competitors and spurring foreign investment.”
Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.