Address by Minister Van Loan at World Energy Congress Montreal 2010
No. 2010/73 - Montreal, Quebec - September 16, 2010
Check Against Delivery
Good morning, and thank you for the opportunity to participate in this distinguished panel.
As the global economy continues on the path to recovery, governments and policy makers must rededicate themselves to policies that allow for the free flow of trade as much as possible, including for the global energy sector.
Unparalleled swings in energy prices in recent years have made energy security a top issue—for governments and business alike—for the first time since the 1970s.
Declining energy prices mean that we need to open more doors for companies in our energy sector, and give them every chance to succeed.
Energy is also essential for economic and social development, especially as developing countries continue to expand their economies.
Without a doubt, the rise of China and India as economic superpowers is also having an impact on the global demand for energy, as is the growing demand from other non-Organisation for Economic Co‑operation and Development [OECD] countries.
So tariffs and other trade barriers not only have an impact on commercial enterprises, but also on social and even political developments around the world.
We must take steps to keep our markets open, and to allow for the free flow of energy, expertise and products—both traditional and non‑traditional—across international borders.
Canada as a leader
Canada is actually the perfect place to be having this discussion.
We’re an energy leader, and we’re a leader in free trade. These go hand-in-hand.
Last year alone, the energy sector accounted for nearly $80 billion of Canada’s real gross domestic product and more than a fifth of our merchandise exports.
We rank among the top 10 energy producers globally, and we have the second-largest oil reserves in the world.
With a relatively small population, we sell far more than we consume.
And we’re rapidly developing technologies and expertise in alternative sources of energy that can help other countries diversify their own energy mixes.
Canada’s experience also demonstrates a clear link between a strong energy sector and a national commitment to free and open markets.
We learned the hard way that excessive government intervention isn’t the right approach.
Some of you may recall that indeed, Canada tried a National Energy Program—a program that was a failure.
It worked against the idea of a globalized economy. It also worked against the very close economic ties between Canada and the United States.
After a new government was elected, the program was repealed in 1985. Canada then adopted an open, market-based approach to energy that has driven prosperity, and increased jobs and opportunities across the country for years.
Thanks to this—and the North American Free Trade Agreement—Canada has become the single most important supplier of energy to the United States.
And we’re gaining a global reputation as an energy leader.
We sell energy to our global partners, and we sell the equipment and expertise needed to help them develop their own energy sectors.
We’ve developed a smart mix of open and transparent legal, financial and regulatory frameworks that are attracting foreign investment and helping this sector thrive.
And we’re pursuing an active free trade agenda to create new opportunities for our energy sector and for those businesses that rely on it.
Canada wants to see an ambitious outcome to the World Trade Organization’s Doha Round.
But, we’re also working in parallel with those efforts by opening markets through bilateral free trade agreements.
In less than four years, our government has concluded new free trade agreements with Colombia, Peru, Jordan, Panama and the European Free Trade Association states: Iceland, Norway, Switzerland and Liechtenstein.
And we’re not stopping there.
We’re now engaged in free trade negotiations with the Caribbean Community, the Dominican Republic, the Republic of Korea and Ukraine, as well as with the Central American Four—El Salvador, Guatemala, Honduras and Nicaragua.
And we recently concluded the fourth round of negotiations with the European Union—part of the most significant Canadian trade initiative since the North American Free Trade Agreement.
At the same time, we’re in exploratory discussions on a comprehensive economic partnership with India, one of the world’s largest economies.
These initiatives hold much potential for Canadian energy firms to expand their presence worldwide.
But trade is only part of the picture.
Fostering a good investment climate
We also want to see more foreign investment in Canada’s energy sector.
Investment will play a critical role in meeting global energy demand in the future.
Canada is a great choice. We’ve worked hard to create the right economic conditions that can attract foreign investment.
- an open and attractive free-enterprise environment, ranked by the Economist Intelligence Unit as the best place to do business in the G-7 this year and over the next four years;
- the strongest fiscal position in the G-7;
- low corporate taxes—on track to having the lowest corporate income tax rate in the G-7 by 2012;
- the fastest economic growth in the G-7 this year, according to both the International Monetary Fund and the OECD;
- the first “tariff-free zone” in the G-20 on manufacturing inputs and machinery;
- a skilled workforce, with one of the highest proportions of post-secondary graduates among OECD countries;
- a vibrant environment for innovation, with one of the most advantageous research and development tax-incentive programs in the industrialized world;
- a strong commitment to good governance, transparency and the rule of law; and
- a high quality of life.
So when foreign investors invest in Canada’s energy sector, they’re also investing in these benefits.
Conclusion: A commitment to open markets is more important than ever
Through Canada’s history and experiences, we’ve learned that a successful, prosperous and job-creating energy sector depends on many factors.
It depends on having the skills, tools and expertise needed to develop energy resources.
It depends on having the right legal, financial and regulatory regimes in place.
And it depends on good government policy—including a commitment to free and open markets and to transparent regulations that encourage cooperation and investment.
It was no accident that, in Toronto in June, G-20 leaders identified fighting protectionism and reaffirming a commitment to free trade as key ingredients in the economic recovery.
Canada believes that this commitment must extend to energy.
And we look forward to working with our global partners in the years ahead to make this commitment a reality.
Thank you very much.
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