CALGARY – The Canadian Association of Petroleum Producers (CAPP) is hopeful about several measures in the new federal budget but is wary it will dampen already low productivity and growth.
“Canada’s world-class resource base stands as one of our foremost competitive advantages. The Bank of Canada has warned that weak productivity and low business investment is a national emergency,” CAPP president and CEO Lisa Baiton said in a statement.
“An economic and public policy environment that leverages Canada’s world-class resource base to provide well-paying jobs for Canadians, revenues to governments, and Canadian LNG to displace higher-emitting forms of energy overseas, has the potential to address this emergency.”
She pointed to the inclusion of the oil and gas industry in the National Indigenous Loan Guarantee Program is a significant advancement.
“Given that Indigenous equity deals in Canada predominantly involve oil and gas projects, this program opens avenues for Indigenous communities to access capital, fostering economic reconciliation and self-determination,” she said.
CAPP also looks forward to the Carbon Capture Investment Tax Credit receiving royal assent three years after it was first announced.
“Such a credit holds the promise of enhancing Canada’s competitiveness against other jurisdictions in carbon capture utilization and storage (CCUS) projects, potentially attracting vital investment and helping meet climate targets,” Baiton said.
She also highlighted industry uncertainty surrounding the federal government’s proposed emissions policy, adding “clarification in this area is essential to inform investment decisions and uphold Canada’s status as an economic and environmental leader, both domestically and globally.”
The 2024 budget also proposed new corporate taxes and she noted that combined with regulatory uncertainty, this would undermine the attractiveness of Canada as an investment target at a global level.
“Royalty and tax frameworks already in place for the oil and natural gas industry ensure Canadians benefit significantly from the development of their valuable natural resources. Total government revenues in 2022 reached $45 billion, up nearly ten-fold since the historically low commodity prices in 2020. These revenues help governments to build critical infrastructure, operate schools and hospitals, and support vital social programs on which Canadians rely,” Baiton said.
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