Canada hopes to attract greater foreign investment with lower political risk and a skilled workforce
Canadian Finance Minister Bill Morneau said that the country is considering relaxing rules on foreign investment in order to attract more capital and spur growth. Morneau indicated that these loosened policies may even include restrictions on the ability of state-owned enterprises to invest in Canada, reports Bloomberg. These changes would have a particularly pronounced impact on Chinese foreign investment in Canada’s energy industry.
Following the 2012 acquisition of Nexen Inc. by Chinese state-owned CNOOC for $15.1 billion, then-Prime Minister Stephen Harper introduced a measure that the government would only allow a state-owned enterprise to acquire an oil sands company under “exceptional circumstances.” This legislation appeared to be directed specifically at Chinese state-owned enterprises (SOE), reports Alberta Oil Magazine.
Former Canadian Prime Minister Stephen Harper
Cold water thrown on investment prospects
“It’s challenging, if not impossible, to unpack the cause and effect of diminished Asian SOE interest in Canadian oil and gas investments since the time that Prime Minister Harper made his pronouncement,” Melanie Aitken, the co-chair of competition antitrust and foreign investment at Bennett Jones, said in January 2015.
But the tides appear to be changing with the new government of Prime Minister Justin Trudeau.
“We will express a continued interest in having a renewed relationship with China. In that regard, we’ll be talking about how we can work together,” Morneau said. “Those questions will be things that we’ll talk about, and our view will be that we’ll try and find ways that we can continue to encourage investment in our country.
“Our goal will be to be communicating to the world why they should be investing in Canada,” Morneau said. “We see Canada as a real beacon for investment globally, a country with low political risk, a highly skilled workforce, and that’s something we want to communicate to G20 countries.”
What about the coming carbon tax?
Canadian Prime Minister Justin Trudeau
Concerns over a possible environmental tax could potentially hinder investment in Canada. Canada’s new federal government is seeking to place a national price on carbon emissions, following Canada’s commitment at the Paris Climate Conference to reduce emissions in line with the two degree Celsius global target.
Additionally, many Canadian provinces are seeking to introduce their own carbon regulations. Efforts by the federal government to harmonize a countrywide price on carbon with the provinces are taking place over the next six to twelve months.
Canadian companies have a strong showing at EnerCom’s The Oil & Gas Conference® 21
This past week in Denver, Colorado, marked the 21st annual The Oil & Gas Conference, which played host to E&P companies from around the world, including Canada. The single most-viewed company webcast from the conference was Canadian operator Blackbird Energy (ticker: BBI), which presented Tuesday, August 16.
Twelve Canadian companies presented at this year’s conference, with the group’s average stock price increasing 0.1% over the five days of the conference, compared to a 1% decline of the overall Toronto Stock Exchange over the same period. Presenting Canadian companies represented operations in numerous resource plays including northern Alberta’s Montney shale play.
