For a number of reasons, Canada's oil and gas industry has experienced reduced investment and investor confidence over the past several years. In particular, U.S. tax and regulatory reforms are drawing investment south of the border. Regulatory uncertainty towards achieving greater market access is challenging investor confidence in Canada, and a number of government policy and regulatory initiatives are being considered that have the potential to further hinder industry competitiveness and job creation.
The results have been dramatic. Global upstream oil and gas investment is expected to increase by $56 billion, or 6%, in 2018. The U.S. alone will see an increase of about 15%. In contrast, Canadian oil and gas investment is expected to decrease from $45 billion down to $43 billion. For oil sands, investment is expected to decrease for the fourth consecutive year. This is a far cry from the situation in 2014 when industry investment topped $80 billion.
We recommend that the federal government address these challenges by, first, allowing 100% immediate deductibility of tangible capital investment in a manner consistent with the recent U.S. tax reforms; second, introducing emissions-intensive, trade-exposed protection of approximately 80% coverage of aggregate cost related to climate policy; third, working with industry to jointly examine innovative approaches to financing for small and medium-sized firms in the industry; fourth, expressly acknowledging Canada's oil and gas sector as not subsidized, by confirming that remaining oil and gas tax measures are part of the benchmark system as stated by the Department of Finance in the 2017 Auditor General's report; and finally, building upon the federal government's Generation Energy council report by adopting a vision for Canadian upstream oil and gas as the supplier of choice in meeting global energy demand.
Thank you for this opportunity to present today, and we look forward to your questions.