The image on the cover of the latest report from the Fraser Institute couldn’t be clearer about its message.
In a race with two runners, one’s lane is filled with hurdles while the other’s is wide open and clear. The comparison is of the approach to oil and gas development between Canada and the United States.
Through a collection of essays, the Fraser Institute points out that investment in oil and gas in the United States is growing substantially while in Canada it dramatically deteriorates.
Between 2014 and 2018, the percentage of oil and gas capital investment in Canada as a share of total capital plummeted from 28 percent to 13.9 percent in 2018, the report says.
Upstream oil and gas investment in the United States increased by 41 percent between 2016 and 2018 compared to only a 15 percent increase in Canada, it adds.
“In addition to pipeline constraints, increased taxation and regulatory requirements in recent years have exacerbated the issues facing the oil and gas industry,” the Fraser Institute says.
“Canada’s recent policy and regulatory changes have been particularly damaging given that deregulation and sweeping tax reforms in the United States have significantly improved the business environment in that country, particularly for the oil and gas sector.”
The Fraser Institute authors emphasize that Canada’s federal government and many key provincial governments have significantly increased regulatory requirements for the sector including the extensive reforms of Bill C-69 and Bill C-48, a provincial cap on greenhouse gas emissions, and new regulations on methane emissions, among others.
“In contrast to Canada, the United States has taken a markedly different approach to promoting energy development. It has rescinded or scaled back several regulations including controls on power-plant emissions and it has withdrawn from the Paris climate agreement,” the report says.
“Building pipelines and easing the burdens of taxes and excessive oil and gas regulations should be a priority for governments at both the federal and provincial levels to help restore the sector’s competitiveness.”