Saskatchewan tops in the eyes of oil and gas investors, but there’s considerable room for improvement

Oil and gas investors see Saskatchewan as Canada’s most attractive province for upstream investment, but the province doesn’t perform well when compared to many of its American counterparts, so there’s considerable room for improvement in various policy areas.

According to the results of this year’s Canada-US Energy Sector Competitiveness Survey, which surveys oil and gas investors on the investment attractiveness of 20 energy-producing provinces and states, Saskatchewan ranks 13th out of 20 jurisdictions. But before examining the results for Saskatchewan, consider how other Canadian provinces perform.

According to the survey, all top-ranking jurisdictions are in the United States—no province made the top five. Alberta, Canada’s energy powerhouse, ranks 16th out of 20 jurisdictions. Newfoundland and Labrador (15th overall) and Manitoba (17th) also rank in bottom third. British Columbia is Canada’s least-attractive jurisdiction for oil and gas investment, ranking second-last among the other provinces and U.S. states.

So what’s behind Saskatchewan’s relatively mediocre overall performance?

Investors pointed to regulatory duplication and inconsistencies (which deterred 48 per cent of survey respondents), uncertainty concerning environmental regulations (45 per cent deterred) and taxation (45 per cent deterred) as the top three areas of concern for Saskatchewan.

For perspective, consider how Saskatchewan performs compared to some other small-reserve holders such as Kansas (ranks third overall) and Montana (ninth overall). In 2019, only 14 per cent of respondents cited regulatory duplication and inconsistencies as a deterrent to investment for Kansas—again, compared 48 per cent for Saskatchewan.

In another stunning result, 45 per cent of respondents see uncertainty concerning environmental regulations as a deterrent to investment in Saskatchewan compared to only 13 per cent for Kansas and 14 per cent for Montana. And 45 per cent of respondents for Saskatchewan identified taxation in general (personal, payroll, capital taxes, etc.) as a deterrent to investment compared to 25 per cent for Kansas and 23 per cent for Montana.

Clearly, Saskatchewan’s performance relative to its U.S. counterparts should concern policymakers in Regina and Ottawa. To improve Saskatchewan’s image, governments should focus on streamlining energy regulations and pursing competitive policies for the benefit of Saskatchewanians and all Canadians.