Imperial oil recently announced its approved $2.6 billion oilsand project (the Aspen project), which was expected in 2022 will now be delayed by at least one year. Rich Kruger, chairman of Imperial, blamed the decision to delay on “uncertainty in the current business environment” and concerns over the Alberta’s government’s decision to curtail oil production in an effort to shore up the price Canadian producers receive for their oil.

Kruger is not alone in his concern about uncertainty in the current business environment, particularly here in Alberta. The Fraser Institute annually surveys senior executives in the upstream oil and gas sector to record their perceptions of the regulatory environment. The news for Alberta was not good in the recent 2018 survey.

Oil and gas executives continue to indicate there’s considerable uncertainty and barriers to investment compared to 2014 results. This year Alberta was once again unable to return to the top 20 ranked jurisdictions worldwide, where it had scored from 2012 to 2014.

Since 2015, the Alberta government has implemented a number of changes in policies that affect the oil and gas industry, including higher corporate and personal income taxes, a cap on GHG emissions from oilsands production, a new carbon tax, a review of royalties that created some uncertainty but left the royalty framework relatively unchanged, and most recently the curtailment of oil production.

All these changes in the policy environment come at a time when Canada continues to struggle to build new pipelines to access tidewater and access higher global prices. The discounted price for Canadian heavy crude remains significant, meaning Canadian heavy oil producers receive less revenue than other producers. In fact, according to a recent study, Canadian heavy oil producers will lose $15.8 billion in foregone revenues due to insufficient pipeline capacity in 2018.

Back to the survey of oil and gas executives, Alberta’s rank dropped from 33 (out of 97) in 2017 to 43 (out of 80) in 2018. And Alberta remains the second-least attractive jurisdiction to invest in Canada just ahead of British Columbia.

This continues a trend. Alberta’s dropped from 14 (out of 156) in 2014 (and the third most attractive jurisdiction in Canada) to 43rd (out of 80) in 2018 and the fifth most attractive jurisdiction in Canada. Poorer perceptions of the province’s regulation and taxation regimes have driven much of the change since 2014. In particular, more than 50 per cent of survey respondents in 2018 see fiscal terms and taxation as deterrents to investment. While 73 per cent of respondents cited the cost of regulatory compliance as a deterrent to investment this year. Overall, Alberta’s scores dropped on all of the survey questions pertaining to regulatory enforcement, disputed land claims and quality of infrastructure when compared to last year’s results.

Clearly, Alberta urgently requires regulatory reform to stem the steady bleeding of investment and capital flight from the province. The tools are well-known—a deregulatory czar to find unneeded regulations and a target of eliminating several old regulations for every new one floated (on a cost basis).

B.C. successfully trimmed its regulations back, as did New Brunswick. Certainly we can do the same in Alberta.