Historical Canadian E&P profitability has been low in comparison to that of the world's other major producing regions, according to a new report. The Canadian Oil and Gas Industry Competitiveness and Financial Performance Report was prepared by ARC Financial Group Ltd., a Calgary financial research firm, for the Canadian Association of Petroleum Producers (CAPP). It found that the average return on capital employed in the Canadian upstream business since 1990 was 4.4%. Pierre Alvarez, CAPP president, says, "To remain viable as an industry, we must demonstrate adequate financial performance over time. Although we recognize we operate in a world of cyclical oil and natural gas prices, if our relative financial performance is not competitive, investors will divert their capital to other Canadian industries or to other regions of the world." Canadian producers continue working to remain competitive by using and demanding new technology and by increasing their efficiency with safe and environmentally responsible practices, according to CAPP. It suggests governments can help promote a more competitive upstream, with competitive fiscal regimes. -Nick Snow