A defining moment for Canada
A meeting this Sunday in Ottawa between Prime Minister Justin Trudeau, Alberta Premier Rachel Notley and B.C. Premier John Horgan may help influence Canada’s investment potential for years—perhaps decades—to come.
The recent postponement of non-essential spending by Kinder Morgan on the Trans Mountain Expansion Pipeline Project was a massive blow to Canada’s attractiveness as a place to invest. We’ll see if Sunday’s summit, reportedly meant to end the inter-provincial battle over the pipeline expansion, produces any results.
The Fraser Institute has seen steep drops in investment attractiveness in both British Columbia and Alberta in recent years in our annual global survey of oil and gas executives. In our 2017 survey, B.C. dropped to 76th out of 97 jurisdictions (from 39th of 96 last year) on our index, which measures how public policies can deter oil and gas investment.
Meanwhile, Alberta—ranked 33rd overall in 2017—is the second-lowest ranked Canadian jurisdiction after B.C. Alberta’s ranking remains far behind 2014 levels when it placed 14th globally out of 156 jurisdictions. In light of the Kinder Morgan impasse, those attractiveness levels may be looked at wistfully in coming years.
It would be bad enough if Kinder Morgan were the only thing pounding away at Canadian investment attractiveness, but it’s not. Bill C-69, which changes the way Canada assesses proposed projects, is also sending out waves of uncertainty. As this article in the Financial Post points out, the new process remains fraught with uncertainty (I previously wrote about this issue here).
The Post article quotes analysts at GMP FirstEnergy who are, we could say, not bullish on the new arrangements. GMP analysts slammed the reorganization of the environmental assessment process for “increased complexity, subjectivity and open-ended timelines.” They also argued that the new process puts the environment first and the economy second. They conclude that “We see nothing in these proposed changes that will attract incremental energy investment to Canada.”
This Sunday’s summit is a glimmer of hope on the Trans Mountain pipeline. But it’s much more than a day late and a dollar short. Although at this point, any glimmer of hope blazes brightly.