You point to the resource industry's lack of reinvestment as evidence of your thesis. I respectfully disagree.
As a resident of Alberta I am aware that the industry could and would reinvest much, much, much more if only they had confidence that a) they would be allowed to make such investments; and b) any proposal would not be held up to ransom and ultimate denial after incredibly expensive and time consuming hearings. In other words, it is the "Canada is broken" idea that is causing the industry to use it's excess cash flow to return cash to shareholders.
Put yet again differently, the government has so skewed to playing field through taxation, regulation and legal means that any large investment is so fraught with danger that ordinary economic analysis of plusses and minuses of a proposed investment is simply inapplicable. In that environment the only rational course is to invest only on a maintenance basis but no greenfield projects.
Well ................
You point to the resource industry's lack of reinvestment as evidence of your thesis. I respectfully disagree.
As a resident of Alberta I am aware that the industry could and would reinvest much, much, much more if only they had confidence that a) they would be allowed to make such investments; and b) any proposal would not be held up to ransom and ultimate denial after incredibly expensive and time consuming hearings. In other words, it is the "Canada is broken" idea that is causing the industry to use it's excess cash flow to return cash to shareholders.
Put yet again differently, the government has so skewed to playing field through taxation, regulation and legal means that any large investment is so fraught with danger that ordinary economic analysis of plusses and minuses of a proposed investment is simply inapplicable. In that environment the only rational course is to invest only on a maintenance basis but no greenfield projects.