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Apr 9, 2018

Canada’s reputation in ‘tatters’ over Trans Mountain: Ex-Encana CEO

Gwyn Morgan: Alberta's last energy hope rapidly fading

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The former CEO of one of Canada’s largest oil and gas producers, Encana Corp., says the obstacles facing the Trans Mountain pipeline project is making investors lose confidence, not only in Canada’s energy sector, but also in the country as a whole.

Gwyn Morgan, the former CEO of Encana, told BNN on Monday that “Canada’s reputation today is in tatters.”

“This is bigger than Kinder Morgan. It’s even bigger than the oil and gas industry and pipelines,” Morgan said. “It has to do with whether or not protest groups, dissident governments like the one we have here in B.C. now can actually stop commerce within the country that is in the national interest.”

Morgan’s criticism comes as Kinder Morgan Canada halted most work on the $7.4 billion Trans Mountain pipeline project after it was being opposed by the British Columbia government, some municipalities, environmental and aboriginal groups on concerns over potential spills.

The move was seen as a huge blow to the Trudeau government, which has vowed that the crucial pipeline project would be built.

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    ‘POLITICIZED SYSTEM’

    But Morgan said he was not surprised by the company’s decision, because it had already invested $1 billion in the project and a lot of that was spent on the regulatory process itself.

    “My concern is everything the government has done has more form than substance to it,” he said. “The new regulatory process that has been announced with much fanfare is going to be make it even more difficult to get projects done.”

    “So, we have a totally politicized system. It’s simply not acceptable to investors, and until that changes in a major way, I don’t see how investors will try to put their money down again through a process that is endless and will more or less fail anyway,” Morgan added.

    Delays in the project are already costing the oil patch billions of dollars in royalties and taxes, Morgan said, adding that this has affected Canada’s reputation to investors.

    “Canada’s net foreign investment dropped to second last in the OECD in the last year and it’s going down further and there’s a reason for that,” he said. “It’s the whole confidence of investors in Canada -not just the oil and gas industry - and the government has to realize this.”

    Morgan’s comments echo what Keyera CEO David Smith told BNN earlier in the day when he said Canada was not looked upon as a good place to invest in the energy sector. 

    Morgan added that while Kinder Morgan’s move may motivate the federal government to step in, he’s not sure what they would be able to do.

    “I don’t have confidence they will [respond], and I think we’ll see more rhetoric and less action,” he said.