The head of a Bay Street bank threw his support behind Canada’s beleaguered energy industry, saying the country serves neither itself, nor the planet, by undermining its ability to get its “responsibly” produced oil and gas to market.
The comments from Victor Dodig, chief executive officer of Canadian Imperial Bank of Commerce, come one day after Encana Corp. announced it was moving its headquarters to the U.S. and changing its name to Ovintiv. It was the latest blow for industry that has seen foreign companies dump more than $30 billion in assets in the past three years amid a price slump, pipeline bottlenecks and growing distaste for the oil sands, criticized by some as among the most carbon intensive.
“I know that some financial institutions are turning away from traditional energy markets,” Dodig said Friday, according to an advance copy of his speech in Calgary, where CIBC was the first bank to open a branch more than 100 years ago. “We know your industry, your business, and will be there to help address the challenges and opportunities that lay ahead.”
Canada is already a leader in responsible energy development, said Dodig -- citing Suncor Energy Inc.’s co-generation project, which will lower greenhouse gas emissions by 25%, and Canadian Natural Resources Ltd.’s carbon capture system, which is making it a world leader in sequestration.
But the industry and the country needs to do more to tackle climate change, he said, suggesting new financing and tax measures from the federal government to help it get there. These could include a tailored tax credit to encourage more carbon capture and sequestration, noting a similar tax credit exists in the U.S.
Dodig called on “true leadership” from government, industry and stakeholders to expand Canada’s energy markets while making the transition to cleaner energy. The importance of building the Trans Mountain Expansion and getting it back in private hands “cannot be overstated,” he said.
“We are caught up in regulation -- instead of delivering results and demonstrating Canada’s environmental and technological leadership,” Dodig said in the text of his speech. “And because of this, Alberta is hurting.”
The announcement from Encana only underscores the urgency to take action, he added.
“If we as a country want to attract international investment, if we want our homegrown energy companies to make the most of their potential, if we want to compete in the world and win, then we must build a modern regulatory framework,” he said.
© 2019 Bloomberg L.P.