7 ways to improve the regulatory competitiveness of Canada’s pipeline industry

REGULATORY COMPETITIVENESS IN CANADA’S PIPELINE INDUSTRY

Transportation capacity and market access are among the most critical issues facing the Canadian oil and gas industry today. These issues are exacerbated by an increasing number of new and overlapping regulations that have made it difficult to build new pipelines to get our products to markets.

To better understand how the regulatory environment is impacting Canada’s pipeline industry, the Canadian Energy Pipeline Association (CEPA) commissioned Ernst & Young LLP (EY) Canada to take an in-depth look at the layers of regulations imposed at both provincial and federal levels.

The resulting report from EY outlined grave implications for the competitiveness of Canada’s transmission pipeline industry.

So, can we reverse the problem of complex regulatory layering? It’s not too late.

pipeline industry regulatory timeline

 

After reviewing the findings and conclusions of the EY Report, CEPA made seven recommendations on how to address the regulatory challenges and regain Canada’s standing as an attractive and competitive destination for oil and gas investment.

  1. Certainty: Regulatory reviews should provide certainty, transparency, predictability, and withstand changes in government.
  2. Overlap: Federal, provincial and territorial governments should develop and commit to a common regulatory strategy to avoid duplication, inefficiencies, and inspire regulatory confidence.
  3. 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.
  4. Predictability: Regulatory processes must be predictable and based on science and facts.
  5. 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.
  6. Timelines: Regulatory processes should include reasonable and enforceable timelines that include consideration for commercial requirements.
  7. Cost: Governments must consider business competitiveness, efficiency, cost, economic growth and the comparative regulatory burden of other jurisdictions competing for the same investment.

 

“More than anything, pipeline companies and investors are looking for clarity, certainty and predictability,” says Lance Mortlock, EY Strategy Partner and Canadian Oil and Gas Leader. “Balancing the environmental, social and economic trade-offs is critical, and it may take years to assess whether recent and proposed regulatory changes will achieve these desired outcomes.”

There’s a lot of work to be done and CEPA looks forward to working with governments and regulators to develop regulations that enable our members to continue to be competitive and deliver the energy Canadians need as we build a safer, stronger energy future.

Do you want to know more about regulatory layering in Canada? You can catch up on our blog series by reading part 1 and part 2 now: