Canadians should not settle for last place
As a Canadian, I’m worried.
Our GDP performance reveals six consecutive quarters of shrinking per capita performance, the most direct measure of a country’s living standards. The numbers confirm what many Canadians feel – Canada is falling behind and things are getting worse.
All Canadians should be distressed that the OECD is projecting Canada to be the worst-performing economy – dead last – of all 38 advanced countries over the next forty years.
Political leaders of all parties should be seriously alarmed that for the past seven years, Canada’s investment growth rate has ranked 44th out of the 47 countries tracked by the OECD. The Bank of Canada has rightly warned that weak productivity and low business investment represent a national emergency.
And it’s a hard reality that Canada is no longer one of the wealthiest countries in the world. As our competitive edges erode, so do Canadian living standards and opportunities for future prosperity.
How did Canada so profoundly lose its way? The answer lies in our insular approach to the economy, our failure to act when other countries do, and our cumbersome and uncompetitive regulatory environment that the country’s most productive industries.
But what’s the solution?
One of Canada’s greatest competitive advantages in the global economy is our energy.
We have a world-class resource base. We’re the fourth largest oil producer and the fifth largest natural gas producer in the world. Our oil reserves are larger than Russia’s.
A recent report by RBC forecasts a substantial increase in global energy demand by 2035, equivalent to the energy needs of the entire United States.
We have a growing market for our products and the energy industry builds the types of projects that can power an entire economy.
The Trans Mountain Pipeline Expansion project has already created thousands of jobs for Canadians, including over 3,000 indigenous workers, and injected billions of dollars into our economy. When complete, the project will deliver billions more over the next decades by significantly increasing the international export capacity of our most valuable commodity.
The $40 billion LNG Canada natural gas export facility is the largest private investment in Canadian history. Not only will this project generate substantial revenue through the export of low-emission liquefied natural gas, it will also contribute to our GDP and enhance our economic prospects for years to come.
Furthermore, there are attractive opportunities for investment in decarbonization projects, which can help mitigate emissions from our oil and natural gas sectors. For instance, the Pathways Alliance, comprising the country’s six largest oil sands companies, just announced regulatory filing for its estimated $16.4 billion carbon capture project.
We have three more LNG export facilities in various stages of progress. In addition, LNG Canada is considering an expansion that would double its export capacity. In Alberta alone, there are 25 carbon capture projects under consideration.
But in the current environment, seeing these projects come to fruition is far from guaranteed. For us to realize these opportunities, we need to tackle the fundamental policy barriers that drive away investment.
The evidence shows we need to urgently overhaul our regulatory framework to restore Canada’s competitiveness and attract global capital.
To build projects, export goods, create jobs and opportunities for a growing population, we need successful and growing businesses.
Our governments must actively champion major investment opportunities, as they do in every other jurisdiction worldwide.
The OECD’s grim prediction of Canada becoming the worst-performing economy among advanced countries over the next 40 years paints a bleak picture. However, this need not be our fate. We must reject complacency and strive for excellence.
Canada stands at a crossroads. Will we continue to repel the investment necessary to revitalize our economy, or will we chart a new course, bolstering our key industries and reclaiming our position among the world’s most prosperous nations?
I know which path I choose.
Lisa Baiton is the President & CEO of the Canadian Association of Petroleum Producers
