CALGARY, A.B. — According to a survey of petroleum-sector executives by The Fraser Institute, B.C. and Alberta now rank as the least-attractive Canadian jurisdictions for oil and gas investment.
The survey said that our province has plummeted to near the bottom of the global rankings since the provincial election in May. This year on the global index, B.C. dropped to 76th out of 97 jurisdictions, compared to 39th out of 96 jurisdictions last year.
“Investor confidence matters, and having a government that’s openly hostile to resource development has apparently sent a chill throughout the oil and gas industry,” said Kenneth Green, senior director of the Fraser Institute’s Centre for Natural Resources and co-author of the 2017 Global Petroleum Survey.
In the survey, which was conducted after the B.C. election, oil and gas executives gave the province low marks for political stability and the high cost of regulatory compliance. Meanwhile Alberta—ranked 33rd overall this year—is the second-lowest Canadian jurisdiction after B.C., and even though Alberta’s score improved slightly this year, its ranking remains far behind 2014 levels when it placed 14th globally out of 156 jurisdictions.
More than 50 percent of survey respondents said Alberta’s high taxes deterred investment in the province’s oil and gas sector. Elsewhere in Canada, Newfoundland and Labrador was the top-ranked province having moved up from 25th last year to the fourth most attractive worldwide this year. Saskatchewan—ranked 4th globally last year—ranks 7th this year.
South of the border, six U.S. states rank in the top 10 global jurisdictions including Texas, Oklahoma, North Dakota, West Virginia, Kansas and Wyoming. And because the U.S. administration is pursuing major tax reforms and reducing regulatory red tape for the energy industry, American jurisdictions could be viewed even more favourably in coming years.
Despite this, Canada actually ranked slightly higher than in 2016 for investment attractiveness.
“The competitive headwinds Canadian jurisdictions already face in the energy sector will likely get stiffer as regulatory and tax burdens continue to lighten in the U.S.,” Green said. “The shackles are being taken off the U.S. energy sector, which spells trouble for Canadian jurisdictions trying to attract oil and gas investment dollars.”
The full report can be found below.