Canada’s investment reputation at risk: execs
TORONTO • Canada’s reputation as an investment destination could be severely dented if big-ticket oil pipeline and natural gas projects do not proceed, industry executives warned Tuesday.
“Canada sells itself as a safe and reliable place to invest, but we have seen different kinds of risks in trying to get projects going,” Alfred Sorensen, CEO of Halifax-based Pieridae Energy Ltd. which has proposed a liquefied natural gas project on Canada’s East Coast, explained at an energy conference in Toronto.
“We don’t have good leadership at the government level to ensure that the process of approval is understandable,” Sorensen said in an interview on the conference sidelines.
“There is a lot of reluctance from investors from the perspective of what the defined terms are and when construction is going to occur.”
Petronas Bhd.’ s $36-billion LNG project in British Columbia could be a litmus test for Canada as the company inches closer to a final investment decision. Malaysia’s state-owned company and its Asian partners have poured billions into the development, but unresolved First Nations issues could scuttle the export project.
“If the Petronas project does not go forward for whatever reason, it will take a long time for Canada to attract capital,” said Sorensen, who has been credited with being the first to propose an LNG project on the West Coast, in Kitimat, a development now owned by Chevron Corp. and Woodside Petroleum Ltd.
Sorensen’s remarks were echoed by Dawn Farrell, chief executive officer of Calgary-based TransAlta Corp., who said her company sped through the regulatory process in Western Australia after winning a bid to build a gas power plant in the country.
TransAlta signed the deal in July and by December had secured all of the permits from the Australian regulator, with construction kicking off in January.
“That can’t be done anywhere in Canada,” Farrell said. “Did we cut any corners? Absolutely not. Every single permit had to be done to world-class standards that we see here in Canada, with all the same environmental issues, First Nations issues.”
Jim Ellis, president of Alberta Energy Regulator, told the conference his agency is working on developing an efficient and competitive system to address all the kinks and emerge as a competitive jurisdiction.
“Canada is the one of the most expensive places to do business on the planet,” Ellis said. “The regulatory system must rollout smarter regulations.”
The issue of who should lead the debate on energy and its impact on the environment remains unclear. Some panellists said they think provinces, rather than the federal government, are best equipped to explain the benefits of development to communities.
Quebec and Ontario’s recent cooperation on energy development shows most of the power on resources rests with provinces, said Ross Bayus, president of the Canadian operations of Texas-based Valero Energy Inc.
“It’s very encouraging to see. And they (the provinces) can get things done very quickly. We need to have that vision as we need to see what role each energy resource will play.”