According to Statistics Canada, spending to extract gas and oil will fall this year in Canada, for the fourth straight year.
The federal agency released data from a survey of investment intentions and found that spending is predicted to be about $33 billion in 2018, down 12% from last year, with the largest fall being in the oil sands sector, in which spending is falling by a 5th to about $10 billion. Spending is also falling in British Columbia, Saskatchewan, Newfoundland and Labrador and Alberta, which is predicted to see a decline of about 12%, down to $22 billion.
Why are these numbers falling? Experts say it is because there are some big projects finishing up and they are not being replaced by new products. This is a trend that is making Canada less competitive than the United States. Investors are choosing to go to the United states because investing in Canadian gas and oil is becoming seen as a hassle due to lower commodity prices, export pipeline constraints and higher taxes.
In the federal budget that was released on Tuesday, the government said they would have to do more analysis before they would even consider tax cuts that would be in line with what the United States offers. At the end of last year they announced that all federal corporate tax rates would fall from 35% to 21%.
This is just one more area in which the Liberal government is not thinking about Canada’s future. The United States is our closest competitor for investors in the oil and gas sector. By putting off even researching the idea of lowering our corporate tax rate, they are guaranteeing that we will lose business, and in turn money which could be used to pay down our deficit. Experts have come out in the past 24 hours, since the release of the new federal budget, expressing concern over the lack of insight and planning where corporate tax rates are concerned.
Meagan Kozlovs is a reporter for Debate Report. She’s worked and interned at Global News Toronto and CHECX. Megan is based in Toronto and covers issues affecting her city. In addition to her severe milk shake addiction, she’s a Netflix enthusiast, a red wine drinker, and a voracious reader.