The Canadian Energy Pipeline Association (CEPA) has released a report with recommendations to avoid a competitiveness crisis.
The Regulatory Competitiveness in Canada’s Pipeline Industry Report, prepared by Ernst & Young (EY) at CEPA’s request, looks at the effect of provincial and federal regulations on the Canadian pipeline industry.
The report found an increase in provincial and federal regulations over the past several decades, in addition to other factors, has had a negative effect on the business competitiveness of the sector.
This is most evident when contrasting regulatory proposals for projects in the US versus Canada.
Since 2016, only one major transmission pipeline application has been put forward, while there have been 14 in the US, underlining competitiveness challenges in the Canadian transmission pipeline industry.
“More than anything, pipeline companies and investors are looking for clarity, certainty and predictability,” said EY Strategy Partner and Canadian Oil and Gas Leader Lance Mortlock.
“Balancing the environment, social and economic trade-offs is critical to enhance global competitiveness, job creation and economic growth.”
In response to the report, CEPA has released a report detailing its recommendations to navigate the issue of competitiveness crisis.
The seven recommendations include:
- Certainty – regulatory reviews should provide certainty, transparency, predictability and withstand changes in government.
- Overlap – federal, provincial and territorial governments should develop and commit to a common regulatory strategy to avoid duplication, inefficiencies and inspire regulatory confidence.
- Transparency and clarity – regulations must be developed with clear policy guidance and regulatory intent and avoid overlap to ensure effective and efficient pathways to compliance.
- Predictability – regulatory processes must be predictable and based on science and facts.
- Flexibility – regulations should be outcome-based as this approach encourages companies to adopt innovative solutions, such as new technologies, to meet or exceed regulatory objectives.
- Timelines – regulatory processes should include reasonable and enforceable timelines that include consideration for commercial requirements.
- Cost – governments must consider business competitiveness, efficiency, cost, economic growth and the comparative regulatory burden of other jurisdictions competing for the same investment.
For more information visit the CEPA website.
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