MONTREAL – The decision by Teck Resources to abandon its Frontier oilsands mine project in northern Alberta shows once again that Canada’s regulatory, legal, and political environment entails unreasonable delays and uncertainty that chases investors away.
“In Canada, getting an energy infrastructure project approved and implemented is a real challenge, even when the project meets all legal and regulatory requirements. This sends a very bad message to investors, many of whom end up proposing their projects abroad, where they are welcome,” says Germain Belzile, Senior Associate Researcher at the MEI.
After a decade and $1.13 billion spent to satisfy all regulatory and legal requirements, and despite the fact that the Frontier project received the approval of the fourteen First Nations in the region, the company was still waiting on the federal government’s blessing.
Teck Resources justified its decision to abandon the project by citing the lack of agreement between the different governments of Canada on how to reconcile environmental policies with the responsible development of the energy sector, creating uncertainty that is not conducive to investment.
“It’s important to put things in perspective. This is a 100-year-old Canadian company that says they are ‘strong supporters’ of carbon pricing and of policies aimed at limiting greenhouse gas emissions, and whose production would replace more polluting sources of oil. Here, then, the perfect is really the enemy of the good,” notes Mr. Belzile.
The Frontier project, valued at $20 billion, would have created 7,000 construction jobs, 2,500 operating jobs, and brought in more than $70 billion in government revenue over a 40-year period.
“Over $100 billion in energy projects have been cancelled since 2017. With each cancellation, well-remunerated job opportunities disappear, and government revenues evaporate. Nobody wins,” concludes Germain Belzile.
The MEI is an independent public policy think tank with offices in Montreal, Calgary, and Paris. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.