Navigating Canada’s path to becoming an energy superpower

By Darryl White, CEO, BMO Financial Group 
Special to The Globe and Mail

In April, Prime Minister Mark Carney laid out Canada’s “tremendous opportunity to be the world’s leading energy superpower, in both clean and conventional energy.” 

That proclamation set the mood at this year’s Calgary Stampede. Many of our Western Canadian clients – across various industries – are increasingly bullish about Canada’s potential, while understandably reserved until they see more evidence aligning policy with ambition. 

Every urban, rural and remote community needs growing private-sector companies, especially large industrial employers, like energy and mining, whose supply chains and professional services needs can multiply their economic impact. 

That growth – Canada’s growth – requires attracting more domestic and international capital. 

The business community should lean in. Canadian banks are active capital providers and advisers to companies and investors. Our clients, from small to large businesses, want to grow and diversify their client base – and we’re prepared to support. 

Successive Canadian governments have done the hard work to create an advantaged global position, with trade agreements covering Europe, North America and many of the Asia-Pacific’s largest economies. These deals give Canadian companies a cost advantage compared with our global competitors. 

We know that capital is drawn to competitive tax rates, skilled work forces, and consistently applied, development-friendly laws and regulations. But certainty is the unifying theme. To meet today’s moment, leaders and investors need certainty that they will be permitted to get on with the job and let efficient global markets allocate capital to the best opportunities. 

So far, Ottawa has begun to deliver. Investment conditions are improving with the landmark multipartisan legislation ending federal barriers to interprovincial trade, encouraging labour mobility, and setting the table for the delivery of “major projects.” 

Our collective challenge is now twofold: One, for political parties aligned with this pro-growth, open-for-business philosophy to keep their foot on the gas and, two, for Canadians to keep the faith in its delivery. 

That’s a tall order. People want swift results, and our project approval processes are famously sclerotic. A dose of strategic patience supported by relentless execution is the prescription. 

We have a generational opportunity to align Canada’s economy to its natural advantages. Canada is home to the conventional energy and critical minerals the world needs and has the geopolitical position to develop them responsibly. 

Canada must become the world leader in the responsible extraction, domestic refining and, where viable, manufacturing of end products. We must reposition Canada from a place commodities come from, to the world’s market for value-added natural resources and the products developed from them. 

An uncomfortable truth for some is that the industrial processes of refining energy and minerals can be resource- and carbon-intensive. As the world transitions to a cleaner energy economy, demand for these products will only increase, resulting in the extraction and refining of critical minerals, and oil and gas – somewhere. 

Do we want it to happen in a country with robust environmental and human rights standards, while our communities prosper from the economic activity through jobs, tax revenues and development? Or, do we hand the reins – and benefits – to countries with weaker standards? 

My bet’s on Canada. My former competitor Brian Porter once wrote in these pages that “the last barrel of oil should be a Canadian one.” I agree with him, and would add: bringing to market every critical mineral we can access, for the benefit of all Canadians. 

Capturing more value from our natural resources and going beyond exporting commodities is key to our prosperity and improving productivity. Efforts to deliver nation-building projects must favour reforms that strengthen our economy and persistently attract investment – not one-off, time-limited interventions that sound good but miss the mark on permanent economic expansion. 

Expediting “major projects” is needed, but competing at our best requires culture change that leads to all projects receiving timely consideration by default, reflecting the urgency and certainty that capital craves. The durability of these changes will be critical, especially as we support newer technologies with higher deployment risk, such as nuclear and hydrogen power, or projects massive in scale, such as East-West electricity transmission or the Pathways Alliance carbon capture project. 

Many will be watching to see how the rubber hits the road, from capital allocators, to international investors, to policymakers of Canada’s competitors. Investors have abundant global options. Our task is to make Canada the easy choice. 

Ultimately, it’s an early test of federal and provincial government resolve. The potential to expand Canadian prosperity for decades is before us. It’s a grand bargain that reflects the economic ambitions of all regions of our great country. Let’s capture this moment and set the stage for decades of growth.