Some political leaders north of the border have been floating the idea of Canada becoming an energy superpower because of its large reserves of natural resources, such as oil and gas. That rhetoric has become more frequent since President Donald Trump began levying tariffs on Canadian products and his talk about the country becoming the fifty-first state.
In response, Ottawa and the provinces have been moving, albeit slowly, towards weaning the country from energy dependence on the U.S.
Among the first aspects of the new strategy is to remove provincial trade barriers. They include regulatory differences, transportation restrictions, provincial taxation and labor mobility, which all lead to higher costs and less economic activity.
But since the Trump tariffs, the provinces have been working to haul down those barriers. And over the past couple of days, two of Canada’s powerhouse provinces have done just that. Ontario and Alberta have signed two significant memoranda of understanding. Here’s Alberta Premier Danielle Smith.
“We’ll work together to explore ways to improve the networks and corridors that better connect our energy and critical minerals to markets here at home, as well as international markets around the globe,” Smith said. “We’ll focus on industry efforts to build oil and gas pipelines, refining, processing and supply chains for energy and critical minerals between Alberta and Ontario. That means we’re seeking to add more rail lines to increase capacity and enhance access to ports, including James Bay and southern Ontario.”
Smith said the plan is to increase the markets for homegrown energy and minerals across Canada and to the rest of the world. Alberta will also help Ontario’s auto sector by having all provincial government vehicles made in Canada, which means in Ontario. Premier Doug Ford said the agreements will also help to create thousands of new jobs.
“Ontario and Alberta are working together to build new energy and trade infrastructure, including pipelines and rail lines. Built using Ontario steel, new pipelines would connect western Canadian oil and gas to existing and potential new refineries in southern Ontario,” Ford said. “They will also expand export opportunities, bringing western oil and gas to new tidewaters right across the world, including by way of a potential new James Bay deep-sea port in northern Ontario.”
Ford said the two provinces will soon launch a joint feasibility study to determine the best route for economic and energy corridors and what money will be needed. But the two premiers agree it can’t be done without the federal government.
“Ottawa must answer our calls and remove all federal barriers that have harmed Canada’s ability to grow the energy sector and other industries such as mining and manufacturing,” Smith said. “This includes, but is not limited to, repealing or amending the Impact Assessment Act and the oil tanker ban. We’re also working to repeal the net-zero power regulations and the proposed oil and gas production cap.”
There is progress. A tanker set off from Canada’s west coast bound for Asia with the country’s first-ever shipment of liquefied natural gas. Canada’s first LNG plant went operational in Kitimat, B.C., a facility financed by British, Japanese, Malaysian, South Korean and Chinese interests.
So, the question remains about whether Canada can become an energy superpower. Jeff Rubin is a Canadian economist and author.
“Canada certainly has the natural resource endowments to become an energy superpower. Whether it has the political will to do so is not quite so clear,” Rubin said.
New data from Statistics Canada shows that exports to the U.S. are continuing to decline, but Canadian exports to other countries have reached a record high. Still, many businesses are struggling with the challenges brought by the tariffs.
