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Alberta and Canada have opportunities to innovate and grow across sectors, but the regulatory, capital, and technological path ahead is increasingly complex and will present challenges for all stakeholders — especially because these areas are increasingly intertwined.
In October, more than 300 industry experts and regulatory leaders met at ASC Connect 2023 where these opportunities and challenges were discussed, along with connections between growth, innovation, and intelligent regulation.
ASC Connect is the Alberta Securities Commission’s annual conference that brings together market participants, business leaders, and industry experts to discuss the critical issues and evolving trends affecting Alberta’s capital market.
This year’s event took place in Calgary with a focus on climate-related disclosure, the relationship between data, emerging technologies and capital markets, opportunities for Alberta’s energy industry, and much more.
Opportunities for energy issuers, investors and stakeholders
In a panel focused on the opportunities for Alberta’s energy sector, Jackie Forrest, Executive Director, ARC Energy Research Institute & Managing Director, ARC Financial Corp. said Canada’s political stability could create significant advantages as the energy transition accelerates — and not just in renewables.
“Only about 25 per cent of the world’s oil supply comes from countries that would be considered stable, secure and non-corrupt, so we think that’s going to be a very important differentiator for Canada,” said Forrest. “Alberta has a great opportunity to be a secure source of supply.”
Forrest added that ARC Financial sees great opportunity in areas like biofuels and electrification, which she said are ready to scale up, along with carbon capture and storage.
Wes Jickling, Vice-President of Technology Development at Pathways Alliance, said the alliance of Canada’s six largest oil sands companies continues to progress its proposed carbon capture and storage project, which would be one of the world’s largest.
But Jickling said for this project – which could eventually store up to 40 million tonnes of carbon annually – and the next generation of Canadian innovation to attract the capital needed to proceed, industry and governments must continue to work together on made-in-Canada solutions to level the playing field with its closest competitor. This sentiment was repeated by panelists throughout the day.
“We always talk about how we’re going to build the next generation of great cleantech companies in Canada,” he said. “But the U.S. Inflation Reduction Act has $370 billion (USD) in subsidies for clean energy. State and municipal governments from all over the U.S. are probably just crawling around Canada, looking for promising cleantech startups and trying to get them to set up shop in their state and city.”
Exploring sustainability standards and disclosure expectations
The importance of finding the right balance with regulatory requirements was also discussed on the panel about climate-related disclosure.
The discussion comes in the wake of the release of the International Sustainability Standards Board (ISSB) standards on sustainability and climate-related disclosure in June 2023.
Charles-Antoine St-Jean, Chair of the Canadian Sustainability Standards Board spoke to the importance of harmonized international standards to provide comparable and consistent disclosure and the CSSB’s process in adopting a Canadian version of the standards. Jonathan Taylor, Manager of Sustainability & ESG Disclosure at ASC discussed the CSA’s process and considerations in potentially bringing climate-related disclosure standards into Canadian securities law.
John McKenzie, CEO of the TMX Group, noted that Canada has the world’s most successful micro and junior capital ecosystem. But with ISSB climate-related disclosure standards, McKenzie cautioned that the vast majority of smaller Canadian companies would not be able to meet disclosure standards as laid out by the ISSB.
McKenzie said that should be taken into consideration as standards are developed for Canada so we can protect our capital ecosystem as well as create a marketplace where companies can grow and thrive. “ These [smaller] companies would not have either the capacity, capability or resources to take on a standard like this,” McKenzie noted.
Jon Mitchell, Vice-President of Sustainability at Suncor outlined why the energy company was a supporter of internationally harmonized standards and the investor and stakeholder demands that prompted Suncor to voluntarily begin providing sustainability disclosure over 25 years ago. He also noted that even with this depth of experience there were aspects of the standards that would prove challenging so we must remain focused on comparable, consistent, relevant, and insightful data. McKenzie concurred and noted the importance of Canada remaining competitive with the U.S. market.
Panellists stressed the need for collaboration and dialogue among regulatory bodies, standard setters and industry to ensure vibrant, healthy capital markets and strong companies within them.
The harmonization of intelligent regulation in capital markets
In a morning panel titled “Harmonizing Intelligent Regulation” Brenda Leong, Chair & CEO of the BC Securities Commission highlighted how effectively provincial and territorial members of the Canadian Securities Administrators (CSA) have worked together to protect Canadian investors from unfair, improper or fraudulent practices as well as fostering fair and efficient capital markets.
“Over the years, we’ve collectively worked on client focused reforms, banned deferred sales charges for mutual funds, and more recently, developed a regulatory framework for crypto asset trading platforms,” said Leong. “Having regulators from across the country brings more rigour to the discussions. It forces all of us to think through the issues affecting our capital markets more thoughtfully and deliberately, to try and reach a consensus. And it’s through that kind of debate that we drive better policymaking for this country.”
Stan Magidson, who brings a dual perspective as Chair & CEO of the ASC and Chair of the CSA, agreed.
“I would say, in response to criticisms about how it’s difficult to get consensus — if something comes out of the CSA rinse cycle, it’s a clean product,” he said. “In terms of how we regulate capital markets, I would put Canada’s system up against any in the world.”
At the day’s final panel on technology and the capital market, conference attendees heard how emerging technologies such as artificial intelligence could create chaotic environments in capital markets, and how regulators are preparing to tackle those challenges.
“We’re assessing the use of artificial intelligence and data in terms of how they could augment regulatory functions,” said Dr. Ryan Clements, Director of Advanced Research and Knowledge Management at ASC. “We’re also assessing how registrants are using it and whether or not the use of artificial intelligence could lead to things like predictive biases or have a negative impact on certain stakeholders in the capital markets. We’re also looking at it in terms of how bad actors can use it for nefarious purposes.”
In the end, the day’s panels and discussions emphasized that future innovation and growth in Canada will be a function of smart, considered securities regulation that protects stakeholders and helps Canadian companies compete internationally.
“One of our pillars is fostering a culture of engagement,” said Magidson. “And for us that’s multifaceted. It’s about internal communication… but equally, it involves making sure that we’re consulting with our stakeholder community, the industry, investors, stakeholders writ large.”
For more information, to see conference highlights, or to replay panel conversation from ASC Connect, visit www.asc.ca/en/asc-connect-2023
