OTTAWA – A new report estimates Canada is losing billions of dollars in unrealized revenues because of its inability to efficiently get its oil to foreign markets.
CIBC economists project that the country will continue to lose on average $15 billion a year from the price differential between world oil prices and what its producers get for shipments mostly to the United States.
That represents about five per cent of gross domestic economies of Alberta and Saskatchewan.
The so-called discount for Western crude reached as high as $43 a barrel last year, but the gap has since fallen to about $15 a barrel, or near the historical average.
The CIBC says Canadian producers increasingly face an uphill challenge in getting global prices for its oil given that the U.S., its main customer, is ramping up domestic production.
Global demand is increasingly skewered toward Asia, the economists say, and so Canada must get on with building the pipeline needed to get crude there.
CIBC chief economist Avery Shenfeld says clarity on the pipeline issue will also help attract the money needed in the oil patch to finance production growth.