How successful is Canada at attracting investment capital in the energy sector? Is Canada globally competitive? What issues is the sector facing, and how can we mitigate them?
These questions were posed to a panel of experts at the December 12 Idea Forum called “Keeping Canada’s energy sector globally competitive.” Panel members included Aaron Engen, Managing Director and Co‐Head of the Power & Energy Infrastructure Group at BMO Capital Markets; John McManus, Senior Advisor of OMERS Infrastructure/OMERS Private Markets; and Steve Baker, President of Union Gas.
The event was organized by the Ivey Energy Policy and Management Centre and moderated by Martha Hall Findlay, Canada West Foundation President and CEO.
Here are the highlights.
The issues at hand
Engen kicked off the event with an overview of the issues Canada faces in staying competitive. He noted there is a common view worldwide of its competitiveness: Canada is a poor place to do large scale energy infrastructure development.
He outlined the following hurdles Canada faces:
- Regulatory approvals;
- Labour costs and project costs;
- First Nations support;
- Rules of law;
- Social license;
- Politicized decision making; and
- Sovereign risk.
But for Baker, the heart of the issue is a lack of dialogue and education.
“What kids are learning in school about hydrocarbons is frequently negative. Or, they’re learning nothing at all about where the products we use every day in our lives come from,” he said. “It’s a similar case with government policy-makers. Policy-makers rarely talk about what hydrocarbons provide to society and the lives we lead.”
Baker said Canada will continue to struggle with energy infrastructure development until this changes. There are opportunities to lower emissions and use energy more efficiently, but policy positions of moving to zero have large implications to society and our existing way of life that are rarely discussed, he said.
McManus spoke from his own experience with OMERS. He pointed out that the capital is available for investments, but what isn’t available are the large-scale opportunities. There’s hesitation about taking development risks, but once a project is approved, deploying capital and taking construction risks can be easier.
Moving forward in the future
Moving forward, Canada needs to have a regulatory process that isn’t politicized, Engen said, complete with firm yet reasonable timelines, predictable outcomes, and government policy stability.
Baker encouraged the audience to strive to become a lower emissions society – not necessarily a zero carbon society – and to understand that the two are dramatically different.
A hint of optimism
Before taking questions from the audience, Hall Findlay ended the panel discussion with a call for more Canadians to “put on their Canada pants.”
“Provincial leaders, municipal leaders, and even people in this room need to show national leadership,” she said. “We need more people to put on our Canada pants and show national leadership.”
She pointed out that the production of oil in Canada is becoming increasingly greenhouse gas emission competitive. Stopping a pipeline does not reduce greenhouse gas emissions globally, she told the audience. Consumption does.
“As long as the countries developing around the world still need it, there’s a really big attitudinal disconnect between who’s going to supply it. It’s not a bad thing if Canada supplies it.”
