MRC Global InSight

Canada

The Canadian sector is continuing to recover from the extraordinary events of the past two years. Canadian customers are navigating PVF material lead time pressures due to increasing demand, coupled with shipping delays and port backlogs. Inflation in local and international markets is resulting in price increases on raw materials and finished goods. The recent rebound in oil and gas commodity prices is having a modest positive impact on investment decisions; however, according to a July survey by the Royal Bank of Canada, energy producers are setting aside just 40% of cash flow for investment, down from 100% before the pandemic.3

As supply chains recover and companies look to “catch up” on production and infrastructure improvements, capital project and maintenance, repair and operations (MRO) activities across the region are gaining momentum. Energy transition projects are also on the rise, propelled by activity in CCUS projects, hydrogen production and storage, and biofuel projects. Many projects involve the expansion of current infrastructure, which reduces capital outlays and aids in efforts to meet carbon and emission goal timelines. Government support of these projects, in the form of public funding and tax incentives, has been instrumental in empowering companies to move ahead on these low-carbon projects.

3. Financial Post: Bank of Canada survey shows oil and gas companies slashing spending