The newly-retired deputy chairman of energy-focused investment bank GMP FirstEnergy is sounding the alarm on the ability for Canada’s oil-and-gas sector to attract capital amid low oil prices, regulatory hurdles, and industry headwinds.

“This is the worst that I’ve ever seen,” Jim Davidson told BNN Bloomberg’s Amanda Lang in an interview Tuesday, referring to capital flight in Canada’s oil patch.

“In prior cycles throughout my history in the business, and throughout the 25 years of FirstEnergy, we’ve had downturns that have been caused for different reasons and of different severity. Some of them have lasted a little bit longer than others. Others have been sharp and immediately corrected back to the upside,” Davidson said.  

“In this situation, it has been meaningful, difficult, and long – over four years that we’ve been in a down cycle in the energy industry. As a result of that, we’re on the cusp of, or have already lost, a number of very good quality people.”

Davidson added that federal and provincial regulatory burdens have hurt the sector’s competitiveness, particularly compared with the United States.

“It takes a lot shorter period of time to get a well licensed and drilled in the U.S. at a lower cost,” he said.     

But despite the headwinds Canada’s energy sector has been faced with, Davidson said GMP FirstEnergy will still be relevant and valuable in next decade – and that new boutique firms will still be formed in this difficult enviroment.

“You cannot grow the way that the prime minister suggests that he would like to grow, away from energy and the extractive industries, and into this new-age environment without boutiques,” Davidson said.

“They actually fill a purpose and a role,” he added. “They take the leap of faith that is necessary to supply capital to budding young entrepreneurs.”