Large-scale energy investments remain a pipe dream

The Liberal government has been obtuse when it comes to whether it will continue the West Coast tanker ban (Bill C-48) or lift it to make way for a pipeline. But nobody will propose a pipeline without the regulatory and legal certainty that they will not be seriously hindered should they propose to build one. Meanwhile, the proposed emissions cap is something that sets an incredibly negative tone, a sentiment that is the most influential factor in ensuring funds flow. Finally, the Impact Assessment Act, often referred to as the “no more pipelines bill” (Bill C-69), has started to blur the lines between provincial and federal authority. All three are supposedly on the table for tweaks or carve-outs. But that may not be enough. It is interesting that Norway—a country that built its wealth on oil and natural gas—has adopted the mantra that as long as oil is a part of the global economy, it will be the last producer standing. It does so while marrying conventional energy with lower-carbon standards. We should be more like Norway. Rather than constantly speaking down to the sector, the Canadian government should embrace the wealth that this represents and adopt a similar narrative. The sector isn’t looking for handouts. Rather, it is looking for certainty, and a government proud of the work that they do and is willing to say so to Canada and the rest of the world. Foreign direct investment outflows have been a huge issue for Canada, and one of the bigger drags on our economy. Almost all of the major project announcements Prime Minister Mark Carney has made to date have been about existing projects, often decades in the making, which are not really “additive” to the economy and are reflective of the regulatory overburden that industry faces en masse. I have always said governments are about setting the rules of the game, while it is up to businesses to decide whether they wish to participate or to pick up the ball and look elsewhere. Capital is mobile and will pursue the best risk-adjusted returns it can find. But the flow of capital from our country proves that Canada is viewed as just too risky for investors. The government’s job is not to try to pick winners and losers. History has shown that governments are horrible at that. Rather, it should create a risk-appropriate environment with stable and capital-attractive rules in place, and then get out of the way and see where the chips fall.