The Demand for Funds for Energy Investment in Canada

Abstract

This paper addresses the question of whether anticipated Canadian energy resource developments can be adequately funded through the financial markets. Historical evidence shows that capital has been available during previous periods when investment in Canada reached a peak as a fraction of GNP. For the future, forecasts of energy investment are compared with forecasts of total economic activity to conclude that the relative level of investment activity will not be greater than has been achieved in the past. Since relative levels of investment expenditure projected here are lower than those foreseen by others, sufficient real productive capacity should be available. The supply side of the financial markets then shows that, if historical patterns of supply of funds persist, the total financial resources can be available. The final step in the financing process then is to ensure that appropriate financial vehicles are devised to carry the supply of savings through the financial markets to the investing companies.