Regulatory uncertainty in the resource sector and high taxes are hurting Canada’s competitiveness in the global race for investment flows, according to GMP Capital’s chief executive.
“If you look at the resource trade, which if you’re a Canadian broker or dealer you’re going to be heavily exposed to, the risk-off trade for Canada has been pretty powerful, flowing dollars out of the country, mainly back into the U.S. where it’s simply a better investing environment in resources,” GMP CEO Harris Fricker told BNN in an interview Wednesday.
“We’ve seen a major outflow of capital, which of course lessens activity all the way around.”
Fricker added there’s no shortage of reasons for investors to send their money stateside.
“Regulation, taxes, inability to get projects done, inability for anyone to understand what community license means... We’re seeing conditions in the western United States and in the oil patch that are simply better investing conditions given the macro-economic, political and socio-economic factors we’re seeing in western Canada currently.”
Fricker believes the British Columbia NDP and Green parties’ attempt to wrest power from the provincial Liberals has further complicated the future of pipelines in Canada, particularly in regards to Kinder Morgan’s Trans Mountain expansion project. He is concerned that further delays will hurt an already lagging industry.
“I think the political situation has grown even more complex with the government situation at the provincial level,” he told BNN. “I do think it will happen, but, again, we’ve been talking about this for a long, long time and this is all about speed to market. LNG is a rapidly-emerging market obviously in Europe and Asia. We have a geographic and a cost advantage accessing both markets.”
“We’re not shipping any product and won’t be for years. The U.S. started shipping product earlier this year. We’re way behind.”