Interprovincial collaboration – Counteracting Eight years of opposition to oil and gas
It’s not easy to consider Canadian energy policy post-Trudeau after a little over eight years of a federal government that enacted policies that were punishing to the oil and gas industry.
However, it may be possible to see some resolution of policies that are oppositional to oil and gas as collaborations develop from the meetings to address the threat of U.S. tariffs.
After meetings of the Council of the Federation – 13 provincial and territorial Premiers in January 2025, a group of value propositions has emerged. After spending a week in Washington DC meeting with Donald Trump and with his administration, Premier Smith stated in a press conference on January 21st that Canadian provinces have very strong value propositions. She noted that British Columbia can leverage germanium – a critical mineral essential in national defence applications, which China will no longer export to the U.S. Saskatchewan can leverage its uranium supply. With America relying on Kazakhstan and Russia for a portion of their supply, the U.S. could substitute Saskatchewan-sourced uranium. Canadian provinces could leverage their products that sync up with the U.S.’s aspiration to be energy-dominant in both traditional forms of energy and critical minerals. Of course, provincial solutions would have to involve effective action on the other key priorities that the U.S. has asked Canada to address – not just energy-related solutions for North American energy security and support of U.S. energy dominance.
However, to address the first and most urgent U.S. request, energy security … several Canadian federal energy policies that are impediments to Canadian energy development must be addressed as they will frustrate collaboration.
Policies like the clean energy regulations (CER), the emissions cap or the Oil and gas sector greenhouse gas pollution cap, and the net zero vehicle mandate which is set to take place starting in January of 2026. These are definite roadblocks to Canadian and U.S. energy security goals. The provinces can collaborate and lobby to reverse some policies and make sure others that are in progress will not survive the next federal election. In the case of the clean energy regulations (CER), Alberta and Saskatchewan have already pushed back.
The Oil and gas sector greenhouse gas pollution cap is still in proposed status – but as mentioned on the Canadian government website, it is … “part of a broader suite of policies” that also need to be reviewed to ensure they do not “roadblock” other mutual Canadian and U.S energy security goals such as:
- Carbon pollution pricing
- Methane Regulations
- Clean Fuel Regulations
- Carbon Capture, Utilisation, and Storage (CCUS) Investment Tax Credit (ITC)
- Emissions Reduction Fund
- Clean Growth Program
- Draft Best in Class Guidance for new oil and gas projects subject to a federal review.
In addition, the realities of U.S. production favor cooperative solutions. Since Americans consume approximately 20 million barrels a day of oil but only produce 13 million barrels a day there’s an opportunity for Canada to supply the difference. To do so, trade barriers between the Canadian provinces would need to be removed with a clear effort to build major infrastructure projects across provinces to the East and West coasts. Collaboration has begun with meetings of the Council of the Federation but could also continue one-on-one between provinces. Already common agreement is starting to emerge. Premier Andrew Fury of Newfoundland and Labrador – an oil-producing province- has said that Canada should not play its hand too early by blocking or limiting energy exports. As Fury said… I see energy as Canada’s queen in the game of chess we don’t need to expose our queen this early the opposition needs to know that the queen exists but they don’t need to know what we’re going to do with the queen.”
Both Saskatchewan Premier Scott Moe and Alberta Premier Daniel Smith have rejected the idea of any measures that would affect Canada’s energy exports to the U.S. “When you look at the pipeline system how oil is actually transported into the US and back into Canada,” Moe said “…it would be very difficult and I think impossible operationally to even consider.”
Manitoba Premier Wab Kinew said that he would not want to see actions taken that would undermine national unity when asked about the idea of cutting off or limiting energy exports to the U.S. Ontario Premier Doug Ford stated that the tariffs would be damaging, costing Ontario about 500,000 jobs. Prince Edward Island Premier Dennis King said that the tariffs would cost his province 25% of its GDP and upwards of 14,000 jobs- a catastrophic loss for PEI.
A growing consensus across the provinces emerged from their discussions on the following points:
- There is an immediate need to visibly demonstrate Canada’s commitment to tighter border security and to accelerate Canada’s 2% GDP NATO commitment
- The importance of building more oil and gas pipelines East and West to diversify Canada’s customer base is key, with the removal of interprovincial trade barriers thereby increasing Canada’s competitiveness and access to markets
- The necessity to consult and secure consent from individual provinces before cutting off or placing export tariffs on key exports from those provinces.
In general, there is emerging provincial agreement that there is a need to focus on constructive proactive diplomacy with U.S. lawmakers rather than escalating rhetoric.
Maureen McCall is an energy professional who writes on issues affecting the energy industry. She writes here for the Frontier Centre for Public Policy
