The Fraser Institute says policy changes by the Alberta NDP party has caused investors to lose faith in the oil and gas sector.
The 2015 Global Petroleum Survey rates 126 jurisdictions around the world based on their barriers to investment like high taxes or costly regulations.
Of the 14 jurisdictions with large petroleum reserves, the five that rank as most attractive for investment are Texas, United Arab Emirates, Alberta, Qatar, and Kuwait.
The report by the right-wing think tank states there are concerns about Alberta because of the royalty regime and because of political instability with a new regime in power. Kenneth Green of the Fraser Institute says perception about the province affects investment.
“How low is it going to go?” he said. “The last time this happened perceptions continued to decline for three years from 2007, then they were even further in 2008, even worse in 2009. They came back only in 2001 when the government undid a bunch of it’s previous royalty review.”
Green says investor confidence should come back up when the economy recovers, but in this case it may not.
“While the industry is down, the government is busy lowering the roof on top of it so when the time comes and the price goes back up they’re going to find it very challenging to stand back up to the level they were standing before,” he said.
The survey report also ranked Canadian provinces:
Saskatchewan ranks first in Canada and eighth out of 126 jurisdictions worldwide.
Manitoba ranks second in Canada and 10th globally, followed by Newfoundland and Labrador.
B-C improved its score jumping up ten to 50th.
Alberta is in 7th place.
