BMO Capital Markets CEO pledges continued support for energy deals

Canada’s big banks have come under increased pressure in recent years to suspend financial support for the oil and gas sector and redirect their resources to help lead the charge towards greener energy, but the head of BMO Capital Markets says there is has reason to support traditional and alternative energy companies.

While the transition to more environmentally friendly energy sources has accelerated, the world is still far from being able to completely abandon fossil fuels. That’s why Dan Barclay, CEO of BMO Capital Markets, says that until there is enough investment in what he calls “new” energy, financial support for oil companies and traditional gas can not be abandoned.

“What we’ve learned lately is that we haven’t invested enough in the ‘new’. And so we have to have a very, very thoughtful and gradual transition,” he said in an interview on Monday.

“Transition is how to move from the old to the new – and you have to reduce the amount you have in the old – but you have to have the equal and compensating amount in the new,” Barclay said.

He said he was encouraged by the way many companies are focusing on switching to greener energy sources, but acknowledged that significant work was needed on infrastructure to facilitate the transition.

“Simple things like the electrical grid to power [electric] cars – we have a long way to go to make this network robust enough… let alone charging stations,” he said.

“So the age of the death of the fossil-fuel car is far, very long.”

Barclay said it expects another strong year of mergers and acquisitions (M&A) activity in 2022, including in the energy sector, as commodity prices remain high.

And while there may be differences between major Canadian banks in their approach to financing oil and gas deals, Barclay said BMO is always willing to play a role.

“We believe in energy and we believe in the Canadian energy story in particular, and we believe in smart transition. We will therefore continue to support our customers in the energy sector, especially those making an intelligent transition to a low-carbon future. »