A tale of two diverging energy fortunes—U.S. vs. Canada
Over the past few years, the governments of Canada and the United States have taken markedly different approaches to energy development, particularly with oil and gas. Consequently, the U.S. energy industry is booming while Canada’s continues to struggle despite increases in oil and natural gas prices.
Canada enjoys the world’s third-largest reserves of oil and is the fifth-largest producer of natural gas. One would, therefore, expect a surge in activity as energy prices rebound. The opposite, in fact, has occurred. Investment in Canada’s energy sector has collapsed. Capital spending in Canada’s oil and gas sector declined by almost 51 per cent between 2014 and 2017.
A number of CEOs of both domestic and international energy companies have publicly stated they will not invest further in Canada due to its deteriorating competitiveness. Steve Williams, CEO of Suncor, recently said his company will reduce its investment in Canada in large measure due to burdensome government regulations and uncompetitive tax rates.
Clearly, Canada’s energy sector continues to struggle primarily because of poor government policies. The federal and several provincial governments have made it incredibly expensive, and in some cases simply inhospitable, to do business in Canada.