DECLINING RESOURCES
$100B in projects cancelled
CALGARY A new report shows $100 billion in planned spending on resource projects in Canada has evaporated, and a further drop should be expected without substantial amendments to the Liberal government’s planned regulatory overhaul in Bill C-69.
As Senate hearings into the controversial bill continued Thursday, the C.D. Howe Institute released a report detailing how recent declines in planned energy, mining and forestry investment in Canada totalling $100 billion is equivalent to erasing 4.5 per cent from Canada’s gross domestic product.
TransCanada Corp.’s $15-billion Energy East pipeline, CNOOC Ltd.’s Aurora LNG and Petronas Bhd’s $36-billion Pacific NorthWest LNG project are among the major resource projects that have been cancelled in recent years after long and uncertain regulatory processes, contributing to the $100-billion figure.
The declines in planned investment in Canada’s resource sector have continued even as investments in competing jurisdictions have rebounded following a years-long decline in commodity prices, said Grant Bishop, C.D. Howe Institute associate director of research and co-author of the report.
“U.S. and global investment in oil and gas has rebounded while in Canada it has continued to plunge,” Bishop said, adding, “Global planned investment in mining has dropped but it has dropped further in Canada.”
Industry groups including the Canadian Energy Pipelines Association and the Mining Association of Canada are asking the Senate to amend the bill. Part of the issue is long regulatory timelines. The study shows it can take up to 15 years to get a mine approved in Canada, compared with six years in Australia. Or it can take up to 11 years for pipeline approvals in Canada, compared with two years in Australia or five years in the U.S.
More important, he said the bill and regulatory overhaul does not fix the biggest obstacle facing major resource projects: the federal government’s own approach to consultations with Aboriginal people affected by development.
“The legislation is not addressing the problem that has tripped up major resource projects.”
Natural Resources Minister Amarjeet Sohi did not respond to a request for comment.