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5/9/2019 - Posted in Oil & Gas

Different investment rates in oil & gas sector

Our expert's opinion

"Fraser Institute studied the percentage of investment in the oil and gas industry in Canada and in the US and found a difference between these two countries. In fact, the investment rate is lower in Canada than in the US. There is a 15% increase in Canada compared to 41% in the US. Find out how Steven Globerman, fellow at the Fraser Institute, explains this difference between these two countries."

- Morgane Zarate, Associate Consultant

Canadian upstream oil and gas investment increase lags U.S. rise

 

From 2016 to 2018, capital investment in Canada’s upstream oil and gas industry increased 15 per cent compared to 41 per cent in the U.S. over the same period, finds a new study released by the Fraser Institute. 

“Part of the explanation for the diverging fortunes is that in the U.S., they’re building pipelines, reducing and streamlining regulations, and reforming taxes to be more competitive while Canada is doing the opposite,” said Steven Globerman, senior fellow at the Fraser Institute and author of Investment in the Canadian and U.S. Oil and Gas Sectors: A Tale of Diverging Fortunes .

Moreover, the percentage of oil and gas capital investment in Canada as a share of total capital investment has plummeted, from 28 per cent in 2014 to 13.9 per cent in 2018.

“Clearly, the U.S. has become much more attractive for energy investment and Americans are reaping the economic benefits,” Globerman said.

“Unless we see dramatic policy change in Ottawa and in key provinces, we can expect this shift in capital from Canada’s energy sector to the U.S. to continue.”

 

Source: JWN Energy

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