Canada’s claim to be energy superpower rings hollow, new report says

Steve Mertl
National Affairs Contributor
Daily Brew

There has always been a degree of complacency in Canadian business that sets them apart from our more enterprising neighbours to the south.

Perhaps it's a legacy of our branch-plant culture. Numerous articles have been written on how Canadian companies are often less productive than they can be, less willing to take risks in order to grow, less aggressive in seeking overseas markets for their products.

Now a new report warns that such inertia is undermining Canada's boast of being a global energy superpower.

The paper by the Mowat Centre at the University of Toronto warns Canada is falling dangerously behind its competitors when it comes to developing and exporting energy technology, the Globe and Mail reports.

"Becoming an energy superpower requires more than just taking things out of the ground and selling them around the world," report author Tatiana Khanberg concludes. "What is missing is energy technology."

The Mowat Centre report says Canada and Ontario need to make energy technology a top priority and reform the way they support research and development in the field.

"Becoming an energy technology leader should be a concrete policy commitment from both orders of government," the centre says in its news release. "That commitment should span the whole energy system, from supply to end-use."

The report seems particularly timely, given the controversy over proposed construction of two major pipelines across British Columbia to carry Alberta oil sands bitumin to the coast for export.

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The report calls Canada's current approach to energy-technology investments piecemeal and fragmented, with governments mostly relying on short-term and overlapping "boutique energy research and development (ER&D) programs," which have a mediocre track record in creating new technologies.

"A national energy strategy, with a sustained and comprehensive national approach to ER&D as its foundation, is a precondition for energy superpower status," the report's authors contend.

Instead of leveraging its vast energy supplies, Canada seems content to simply extract those resources and sell them.

"Canada's natural resources represent an enormous opportunity to diversify our exports and become more active in the multi-billion dollar global energy technology market," the centre said in its release. "Canada risks missing out on the opportunity of becoming a leader if it fails to invest."

Centre director Matthew Mendelsohn told the Globe that technology should be at the heart of a new national energy strategy with the goal of helping the world move to the use of lower carbon energy.

"The world is evolving to cleaner forms of energy and we don't have the technology to support that," he said. "There's no reason why Canada shouldn't be thinking of itself as an energy superpower in a different way."

Technology could become the glue that binds the country in a new energy strategy, helping offset regional tensions, such as the dispute between Alberta and B.C. over the proposed $5-billion Northern Gateway pipeline, the report suggested.

The report also points to low levels of private investment, a poor track record when it comes to technology innovation and a growing technology trade deficit.

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The Mowat Centre report comes on top of other evidence that Canada can't afford to take its ownership of oil, gas and hydro resources as a guarantee for future prosperity.

The Financial Post reported earlier in June that this year's Fraser Institute Global Petroleum Survey found international investors remain unconvinced about Canada's status as an energy superpower.

The report found that among Canadian jurisdictions, only Manitoba made it to the top 10 most attractive global locations for oil and gas investment, ranking fifth among 147 worldwide locations.

Alberta dropped down the list after the government returned provincial royalty rates to previous higher levels in 2009. The government reversed the decision in 2010 and has since climbed into the top 25 from 92nd place, according to the Post.