Enbridge has reportedly hired Royal Bank of Canada to help them sell billions in assets located in B.C. and Alberta.
There’s more evidence of the struggle facing Canada’s energy industry, and the overall collapse in investment under the failing Trudeau government.
Bloomberg is reporting that Enbridge is seeking to sell Western Canadian assets worth up to $2 billion, and have hired RBC to facilitate the process.
According to the report, “The package of assets, located across British Columbia and Alberta, was owned by Spectra Energy Corp., which agreed to be acquired by Enbridge in 2016 for about $29 billion.”
This is in addition to an earlier plan by Enbridge to divest in $10 billion in assets overall, including another $3 billion in assets from their onshore renewable and their gas midstream businesses.
According to Bloomberg data, shares in Enbridge are down a full 27% since September of 2016.
Energy industry struggles under big-government regulations
The move by Enbridge to sell even more assets is yet another sign of how badly the Trudeau government is hurting the energy industry, and the overall investment climate in our country.
The market is all about trends and confidence, and the trend in the energy industry is moving clearly in one direction: Companies are trying to reduce their exposure to Canada, and investment is falling. This overall investment environment has serious negative consequences for our economic prospects.
People are seeing that it is now nearly impossible to get pipelines approved, the carbon tax makes doing business more expensive, and uncertainty is having a devastating effect on investment. This creates an overall mindset that discourages investment, especially when compared to our neighbour to the south, a point made in a recent baystreet.ca report:
“Tim McMillan, Chief Executive Officer of CAPP, said the sector is seeing companies, including Canadian firms, looking at allocating more capital dollars in the U.S. while investment in Canada is decreasing. In fact, Canada’s top energy customer is now its leading energy competitor, he said.
“That’s almost adding gasoline to a fire that’s already burning,” Mr. McMillan said of the recent U.S. tax reforms. “They are beating us on regulatory times. They are beating us on tax policy, on capital cost write offs. It is across the board.”’
As a result, we can expect more announcements of companies selling assets in Canada – both in the energy sector and across the board – until we get a government that is actually willing to support the Canadian energy industry and create an investment climate that provides confidence in future growth.
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