CDN NEWS | 
US NEWS 
A key question heading into trade talks with the U.S. is how to safeguard the integrated nature of energy flows, while also looking to expand exports into other markets
By This Article and More by Chris Varcoe Here
Before travelling to the United States to discuss the future of the North American trade deal, federal cabinet minister Dominic LeBlanc sat down for nearly two hours with oil and gas industry officials, including Cenovus Energy executive vice-president Jeff Lawson.
The session, which included federal Natural Resources Minister Tim Hodgson, delved into the role of energy ahead of an upcoming review of the Canada-U.S.-Mexico (CUSMA) trade agreement.
And coming out of Monday’s meeting in Ottawa, the industry and the Carney government appeared to be firmly on the same wavelength.
“We’re perfectly aligned with the federal government,” Lawson said in an interview.
“The energy trade is so important to both countries, and it’s been such a long-standing, mutually beneficial relationship, where both sides are benefiting . . . We want to do everything we can to preserve that, and I think that we can.”
The meeting also included AltaGas CEO Vern Yu, South Bow CEO Bevin Wirzba and executives from six other companies.
Before his trip to Washington on Tuesday, LeBlanc sent a note to his counterparts in the United States and Mexico, with the Canadian government recommending the trade agreement be renewed for another 16 years.
Energy remains Canada’s largest export product to the United States. Canada is the top foreign supplier of oil and gas to the country, while the U.S. is the largest international supplier of energy to Canada.
After some early concerns last year, oil and natural gas exports have almost entirely avoided U.S. tariffs under the existing CUSMA agreement, which is up for renewal next month.
A key question heading into the next round of trade discussions with the U.S. is how to safeguard the integrated nature of energy flows, while also looking to expand exports into other markets.
“I want our energy and natural resources sector to play the strategically important role it should be playing, as Canada’s strongest cards in the CUSMA renegotiation,” Hodgson said in a speech in Toronto in April.
A recent report from the Canada Energy Regulator (CER) highlights the importance of trade between the two countries.
Canadian sales of oil, gas, refined petroleum products and natural gas liquids to the U.S. totalled $158 billion last year. These energy products made up 20 per cent of Canada’s total goods exported globally, it noted.
With the startup of the Trans Mountain expansion and LNG Canada in the past two years, Canada exported 6.5 million barrels of oil equivalent per day of hydrocarbons in 2025 to more than 100 countries, with the U.S. receiving nearly 91 per cent of the total.
Overt attempts to use energy as leverage during the CUSMA review would be “totally foolish,” said Robert Skinner, former director of policy at the International Energy Agency and an executive fellow at the University of Calgary’s School of Public Policy.
“I don’t think Canada should come up with any kind of notion . . . that we can use Alberta’s energy or Newfoundland and Labrador’s electricity as a negotiating card,” he said.
“What are we going to do with it if we don’t sell it to the United States?”
Lawson said the energy discussions should focus on the long-term upside of trade for both sides.
“The card we’re playing is that we’ve got a 30-year, long-term relationship where both countries have benefited,” he said.
This doesn’t mean that Canada can’t also look to promote trade diversification.
Canada has one LNG facility operating on the B.C. coast and two more under construction.
As part of the new energy MOU between Ottawa and Alberta, the province is proposing a greenfield bitumen pipeline that can transport up to one million barrels per day to the Pacific Coast for export to international markets.
A note this week by the Business Council of Alberta said crude oil is Canada’s biggest export diversification opportunity.
With the Carney government striving to double exports outside of the U.S. within a decade, a new oil export pipeline to the Pacific Coast could help reach 13 per cent of the prime minister’s diversification goals in one step, it noted.
“I don’t think we should be pitting potential growth in U.S. energy exports against international, non-U.S. energy exports,” said council president Adam Legge.
“Frankly, there is enough energy in Canada and Alberta — oil and natural gas — to satisfy all markets.”
Carlo Dade, director of international policy at the University of Calgary’s School of Public Policy, said Canada is going to increase energy exports south, and “the fact that we’re going to other markets does not mean we’re leaving the U.S.”
“We need to increase the rate of growth to other markets faster than the rate of growth to the U.S.,” he added.
It’s a tricky time in the trade relationship, as Canada seeks to boost energy sales to the United States and the rest of the world, added Gitane De Silva, who previously served as Alberta’s senior representative to the U.S. and is the former head of the CER.
“It is an important moment for Canada to figure out this balance,” she said.
“It’s an all-of-the-above — every form of energy and every market.”
Chris Varcoe is a Calgary Herald columnist.
[email protected]
Share This:
PEPSPECTIVE: Is Ottawa Turning Alberta’s Pipeline Into a Taxpayer Trap? – Lennie Kaplan