The Impact of Government Regulations on Investments in the Oil and Gas Sector

The Canadian oil and gas sector has been significantly affected by government regulations over the past decade. Investments in the sector fell dramatically after 2014, when global oil prices crashed, and despite some recovery in oil prices, investment levels have not returned to their previous highs.

The Liberal government under Prime Minister Mark Carney has shown some flexibility towards the industry, including including "conventional energy" in its plan to make Canada an "energy superpower" and proposing legislation to streamline the approval process for major projects in rare cases. However, the government's stance on not vetoing provincial or First Nations' objections to pipeline projects and the introduction of the Impact Assessment Act (Bill C-69) have been criticized by pro-pipeline advocates as deterrents to investment. The act requires assessments for environmental, social, and economic impacts, as well as considering indigenous rights, before resource projects can proceed, and has been accused of causing regulatory uncertainty and increasing costs. The government's purchase of the Trans Mountain expansion project and the potential "grand bargain" with Alberta, which includes a new pipeline to the Pacific Northwest and a carbon capture and storage network, show a commitment to infrastructure development. However, the long-term impact of these efforts on investment remains uncertain, and opposition politicians argue that more substantial changes are needed to make Canada's regulatory environment competitive with other oil-producing nations.