Canada's energy industry faces a critical challenge on market access

Canada's energy industry faces a critical challenge on market access 
Hon. Jim Prentice, Vice Chairman of CIBC, tells London energy conference that 
Canada needs to send the message that it is open for business 
LONDON, UK, Oct. 1, 2013 /CNW/ - CIBC (TSX: CM) (NYSE: CM) - Canada's energy 
sector urgently needs to reorient its focus from being a continental energy 
supplier to become a global player, says the Honorable Jim Prentice, Senior 
Executive Vice-President and Vice Chairman of CIBC. 
Mr. Prentice told an audience at the Oil and Money 2013 Conference in London, 
England that "Canada faces the imperative to change its thinking, adjust its 
focus and begin to match up its energy resources with the needs of the growth 
markets of the Asia-Pacific. The industry must do the hard, urgent work of 
reorienting itself to serve the demand of tomorrow - and it must do so in a 
climate in which other countries are equally determined to supply these 
markets with oil and gas." 
To succeed in this task, he said Canada must: 

    --  become more international in its ambitions, by securing trading
        relationships with new partners, especially in the
    --  invest in and develop the infrastructure required to
        efficiently export oil and gas both on the continent and around
        the world; and
    --  ensure an attractive regime for foreign investment in the
        energy industry, including from State-Owned Enterprises.

"When it comes to energy, Canada is not being sufficiently attentive to its 
future interests," says Mr. Prentice. "Despite what some may think, it's not 
as simple as getting oil to the Pacific coast and onto a tanker. It's a 
fiercely competitive world out there. Relationships need to be developed. 
Negotiations need to be pursued and concluded. An energy trade agenda needs to 
be advanced."

To deliver on these new markets he says we need to move quickly on building 
the pipelines, ports and terminals required to get our energy to these growing 
markets. "Simply put, Canada lacks the pipeline infrastructure required to 
handle the overall projected growth in production beyond 2020. Pipelines are 
required in virtually every direction and, at present, the only alternative 
available is to transport more oil using rail cars," says Mr. Prentice.

He notes that few in Canada saw this infrastructure challenge coming even five 
years ago. We were secure in knowing we had a steady, stable client to the 
south that would buy all that we could produce. But with U.S. energy 
independence nearing reality, Canada needs to make tangible progress toward 
addressing its infrastructure problem.

To continue to grow the industry and build these facilities will require 
continued foreign investment adds Mr. Prentice. "Because, simply stated, our 
ambitions and resources exceed our supply of domestic capital."

He notes that over the last five years foreign direct investment has accounted 
for 26 per cent of the capital injected into Canadian energy projects through 
M&A activity. But over the past year, in-bound foreign investment in Canadian 
energy has dropped off dramatically.

Foreign investment is down 92 per cent this year at $2 billion, compared with 
$27 billion in the same period in 2012. Mergers and acquisitions activity in 
Canadian energy is similarly below historic levels - just $8 billion in 2013, 
compared with $66 billion in 2012, year to date.

To address this, Mr. Prentice believes there needs to be a measure of clarity 
regarding State-owned Enterprises and foreign investment. "Canada must make 
clear to the world that it continues to be open for business. Not everyone is 
getting the message that Canada remains open to the world. In fact, some are 
coming to believe the opposite.

"There are large companies from non-market economies that have ambitions to 
come to Canada. They want to be headquartered in a stable western democracy. 
They want to use and benefit from Canadian technology, labour and capital 
markets. These are giant, world-class opportunities for Canada, but they don't 
want to be rejected. They certainly don't want an embarrassing confrontation 
with a western government and right now they are puzzled by Canada."

Mr. Prentice believes if Canada can overcome these three challenges then the 
energy industry will continue to remain a driving engine of Canadian economic 

A copy of Mr. Prentice's speech is available at:

About CIBC
CIBC is a leading North American financial institution with more than 11 
million personal banking and business clients. CIBC offers a full range of 
products and services through its comprehensive electronic banking network, 
branches and offices across Canada, and has offices in the United States and 
around the world. You can find other news releases and information about CIBC 
in our Media Centre on our corporate website at

Kevin Dove, Head of External Communications at 
PDF available at: 
To view this news release in HTML formatting, please use the following URL: 
CO: Canadian Imperial Bank of Commerce
ST: Ontario
-0- Oct/02/2013 02:40 GMT
Press spacebar to pause and continue. Press esc to stop.