Alberta’s one-stop shop for energy project approvals is a good step forward

In the midst of the Trans Mountain saga, Alberta has launched a new regulatory reform effort that will streamline the permitting process for energy projects in the province. Energy Minister Margaret McCuaig-Boyd says the new process will mean “one application, one review, one decision on energy developments.”

This is long overdue, as investors are increasingly deterred from investment due to regulatory difficulties.

Every year, the Fraser Institute surveys energy executives about the regulatory environment and asks them to evaluate whether a given policy dimension—say, the tax regime—would attract their investment or deter it. Our most recent survey revealed a strong trend in increased deterrence on the regulatory side.

• When asked whether uncertainty about environmental regulations would attract or deter investment, 32 per cent of survey respondents registered deterrence in 2013 compared to 68 per cent in 2017 (after peaking at 72 per cent in 2016).
• Concerns over uncertain regulatory enforcement followed the same pattern, deterring only 20 per cent of respondents in 2013 then rising to 35 per cent in 2017 (after a spike of 57 per cent in 2016).
• In 2013, 32 per cent of respondents registered regulatory compliance costs as a deterrent to investment compared to 70 per cent in 2017.
• In 2013, only 19 per cent of respondents said they were somewhat deterred from investment due to labour regulations and employment agreements compared to 27 per cent in 2017.
• And 35 per cent of survey respondents in Alberta expressed some deterrence due to regulatory duplication and inconsistency in 2013 compared to 48 per cent 2017 (after a peak of 53 per cent in 2016).

Again, Alberta is long overdue for regulatory reform. As the Canadian Association of Petroleum Producers (CAPP) has observed, Alberta’s regulatory regime is one of the most stringent in the world. But CAPP also observes that stringency comes at a price. Its analysis of the regulatory timeline for approval of a mandatory “statements of concerns” varies widely among comparative/competing jurisdictions in Canada and the United States. As CAPP’s analysis points out, Alberta’s regulatory regime could lead to well-licensing delays of up to 148 days compared to British Columbia and Saskatchewan, and 190 days compared to some jurisdictions in the U.S.

Environmentalists have expressed doubts about the movement to a one-stop shop approval model, but there’s no reason to think the Alberta government can’t gather all the right people into a single regulatory authority that can protect the environment but still get projects approved in a timely competitive manner that will bring back investment to the province.