Thank you first of all for the opportunity, and second, I was given a five-minute window. I love the fact that it might be an hour, but I have a four-minute presentation with basically one minute of introduction, one minute of context and two minutes to discuss an opportunity. I'm speaking a little bit about finance. I'm speaking a little bit about small and medium-sized enterprises in Canada, and I'm certainly speaking about energy in Canada.
I am Brett Wilson, the chairman of Canoe Financial. We run about $6 billion of assets, almost all of it invested by Canadians. I am a prairie boy. I am an engineer by training and early career. As an investment banker, I was a co-founder of one of Canada's most successful investment banks, FirstEnergy Capital, which of course happened to focus on energy. Ten years ago I evolved into the world of merchant banking with a wide diversity of investments in Alberta, Saskatchewan and British Columbia. I am active in the oil and gas industry. I'm active in hydro and wind power. I'm an investor in Canada's largest solar energy projects. I'm currently building a gas-fired electricity plant, and I'm active in almost all subsectors of the Canadian energy industry. I am committed to Canada, and I'm committed to its many energy industries.
Just for some context, the World Bank says Canada is number 23 as a place to invest in the world, and unfortunately it's dropping. In the past we've been recognized as a global leader in resource extraction. That recognition is also dropping. Over the last decade many global energy companies have exited Canada for compelling returns elsewhere in the world. The Canadian energy industry has juggled and struggled for the last five years, driving down operating costs, while seeing capital efficiency.
Issues still abound over responsible access to world markets for our hydrocarbons, all of which is exacerbated by foreign-funded and often misguided attacks on Canada's energy industry. The U.S. oil industry by contrast has more than doubled its production during the time that we have struggled and slipped.
Of note as well, the energy sector is Canada's largest employer of our indigenous peoples.
With regard to the opportunity I'd like to speak to, as of the end of 2018, small and medium-sized enterprises in energy in Canada had invested more than $80 billion in excess of their taxable income, resulting in $80 billion in tax pools between NOLs—net operating losses—and capital cost allowance pools and other pools that are directly attributable to energy, such as the Canadian oil and gas property expense, Canadian development expense and Canadian exploration expense. In sum, there is $80 billion in pools.
The opportunity that is circulating in Calgary, and what I'm proposing now, is to monetize some or all of that $80 billion in tax pools. Those are tax pools that are currently assets of the companies that spent the money, and they are liabilities to the Government of Canada as they offset income over time. As used, that $80 billion of tax pools would cost the government about $20 billion, 25¢ on the dollar.
My suggestion is that there is an opportunity for the two levels of government to offer two choices to energy companies: the direct repurchase of this tax pool asset from companies for, say, 50¢ on the dollar, and/or alternatively the issue of flow-through shares into the capital markets allowing renunciation of existing pools, rather than creating new pools for renunciation.
Thus, this opportunity is for both a $10-billion injection into Canada's world-class energy sector and at the same time a reduction of $10 billion to the CRA's expected cost of the ongoing utilization of the tax pools as claimed. The opportunity is a classic win-win for Canada. It is capital our energy industry would reinvest to the benefit of Canada in so many ways.
Ladies and gentlemen, thank you for the opportunity to pitch. I'm happy to take questions for most of the next hour. I understand that's not the case.