With more than $67 billion of investment in 2013, the oil and gas industry is the single largest sectoral investor in the Canadian economy. These numbers are well in excess of the next highest industries including utilities ($32 billion), transportation ($23 billion), and manufacturing ($18 billion). (Statistics Canada, 2014)While these investments are significant, CAPP members are increasingly concerned about the economic competitiveness of Canada’s economy. CAPP’s 2014 Crude Oil Forecast estimates total Canadian oil production will increase to 6.4 million barrels per day by 2030 from 3.5 million barrels per day in 2013. This is lower than the 2013 forecast, which estimated total 2030 production at 6.7 million barrels per day. While continued growth is anticipated, this reduced forecast reflects increased uncertainty related to cost competitiveness and capital availability.
The outlook for natural gas is also challenging, as Canadian gas continues to be displaced in traditional markets in the east as new infrastructure is constructed to access U.S. shale gas. The absence of access to new markets could constrain production by as much as 37 per cent by 2030. This trend is part of a broader competitiveness challenge for Canada. In July the Bank of Canada downgraded its near term forecast with real GDP growth expected to average 2.25 per cent up to mid-2016, when the economy returns to full capacity.
With the federal government poised to return to balanced budgets, yet subdued economic growth expected for the foreseeable future, now is the time for strategic investments to strengthen competitiveness and position the economy for long-term sustained growth.
The enclosed pre-budget submission seeks to achieve these objectives in alignment with the following priority themes of the Standing Committee on Finance:
- Improving Canada’s taxation and regulatory regimes
- Maximizing the number and types of jobs for Canadians