In a stunning decision Sunday, Teck Resources withdrew its application to build the $20.6 billion Frontier oilsands mine in Alberta, just days before the Trudeau government’s cabinet was expected to decide whether the project could proceed, citing Canada’s “inability to reconcile resource development and climate change.”

The Teck withdrawal is more proof that Canada’s uncertain investment climate and energy policies have made it almost impossible to do business in this country, which has ramifications far beyond the energy sector and western Canada.

Recent investment data underscores the deteriorating investment climate in Canada’s energy sector. Between 2016 and 2018, the United States enjoyed a more than two-and-a-half times increase in investment in its upstream oil and gas sector (essentially, exploration and production) compared to Canada.

Uncertainty—political, economic or regulatory—adversely affects investment because firms and entrepreneurs must make long-term decisions about how best to allocate their scarce capital. Jurisdictions with predictable stable environments are much more attractive than jurisdictions characterized by uncertainty.

Consider that, Teck spent almost 10 years securing the necessary approvals (with conditions) from provincial and federal regulators, and making changes to the project to appease a host of groups including various Indigenous communities. This is a major commitment of time, resources and energy by the company, only to finally decide it could not proceed because of the uncertainties surrounding Canada’s environmental regulations.

This isn’t the first time that Canada’s uncertain policies have thwarted badly needed investment. The Trans Mountain expansion project was first approved in 2016 after a five-year process that included environmental assessments and Indigenous consultations. Yet uncertainty over this project ultimately caused Kinder Morgan, one of North America’s largest energy infrastructure companies, to abandon the project, which then forced the federal government to intervene and purchase the project (which only recently restarted construction due to ongoing political and regulatory impediments).

Moreover, in 2016 the federal government scuttled the previously-approved $7.9 billion Northern Gateway pipeline and imposed new regulatory burdens on the Energy East pipeline including consideration of “downstream emissions” (emissions generated by consumers), which helped prompt TC Energy to cancel the project. Put simply, the inability of firms to build pipelines—and other major energy infrastructure projects—even after receiving necessary and extensive regulatory approvals has and will continue to negatively affect investor confidence.

Indeed, a recent survey of energy executives found that when evaluating Alberta, Canada’s major energy-producing province, 73 per cent of respondents cited the high cost of regulatory compliance as a deterrent to investment in 2018 compared to only 32 per cent in 2013.

When announcing his company’s decision to abandon the Frontier mine project, Teck CEO and President Don Lindsay said it will be “difficult to attract future investment” in Canada’s energy sector given the tremendous uncertainty that exists around climate-change policies. And less future investment means less jobs and prosperity for Canadians.

As tensions rise about Canada’s inability to attract energy investment, Ottawa must restore investor confidence quickly by mitigating the policy uncertainties that are chasing vital investment from our country.