Energy
Natural resources remain backbone of Canada’s trade and prosperity
From the Fraser Institute
By Jock Finlayson and Elmira Aliakbari
It’s hard to overstate the importance of energy to our economy. In its latest “scorecard” report, the Coalition for a Better Future notes that “over the past decade, Canada recorded a cumulative trade gap of $130 billion. Had it not been for energy, our trade gap would have been about $1 trillion.” By any measure, the energy sector punches above its weight when paying Canada’s bills.
Canada is a mid-sized economy accounting for roughly 2 per cent of global production. Within North America, we represent less than one-tenth of the collective output of the three national economies. Canada is also an “open” economy that relies on cross-border flows of trade, investment and knowledge to sustain our high living standards.
To pay our way in an unforgiving and very competitive world, Canada must produce and sell exports to customers in other markets. Among other benefits, these exports furnish the financial means to pay for the vast array of imports that enhance the wellbeing of Canadian households and allow many of our businesses to operate efficiently and grow.
In 2022, Canada exported $779 billion of goods to other countries, and $161 billion of services, for a total of $940 billion. About three-quarters of Canada’s exports are destined for a single market—the United States. Canada also sources the bulk of imports from the U.S.
A hard truth about Canada’s trade is the outsized role of natural resource-based products in the export mix. Added together, energy, non-metallic minerals (and related products), metal ores, forest products and agri-food (i.e. food produced from agriculture) comprise roughly half of Canada’s international exports of goods and services—a notably larger share than in other countries with advanced economies (apart from Australia and New Zealand).
Energy alone accounted for 27 per cent of Canada’s merchandise exports in 2022, generating $212 billion for Canadian businesses, workers and governments. Mining contributed $85 billion in export revenues, followed by forest products ($60 billion) and agri-food ($57 billion).
Within the broad energy basket, oil and oil-based products dominate, accounting for more than three-quarters of all energy-based export revenues. Despite innumerable speeches and press releases issued by the federal government, energy’s contribution to Canada’s exports is poised to increase in the next few years—due not to growing exports of “clean tech” goods, carbon-free electricity or hydrogen, but to pending liquefied natural gas (LNG) production in British Columbia coupled with rising volumes of Western Canadian oil shipments following the completion of pipeline expansion projects.
It’s hard to overstate the importance of energy to our economy. In its latest “scorecard” report, the Coalition for a Better Future notes that “over the past decade, Canada recorded a cumulative trade gap of $130 billion. Had it not been for energy, our trade gap would have been about $1 trillion.” By any measure, the energy sector punches above its weight when paying Canada’s bills. The same is true, albeit to a lesser extent, for the other major resource sectors.
Many Canadians, huddled in increasingly unaffordable urban communities that have few evident connections to the country’s natural resource economy, may be puzzled by the continued vital importance of resource extraction and processing to Canada’s prosperity.
Ultimately, any trading country has a ledger showing the trade surpluses and trade deficits of its industry sectors. In Canada’s case, a handful of sectors generate significant trade surpluses, which help finance the large trade deficits incurred in other parts of the economy.
The story is a simple one—positive trade balances in the energy, mining, forestry and agri-food sectors offset chronic—and in some cases fast-growing—trade deficits in consumer goods, chemicals and plastics, motor vehicles/parts, and industrial and electronic goods. Canada also runs a smallish deficit in our overall services trade.
The sectoral trade data are informative. Among other things, they tell us where Canada has a “comparative advantage” in the global context. For a market economy, a pattern of positive trade balances is evidence that it has a comparative advantage in industries that reliably report trade surpluses.
Armed with such information, smart policymakers should create and sustain a business and investment climate that champions and bolsters the commercial success of industries that underpin the export economy. This is a message the Trudeau government has had trouble digesting, perhaps because it relies heavily on the votes of a few large metropolitan areas while most rural and resource-dependent regions remain a political afterthought.
Authors:
From LifeSiteNews
Trump to impose 25% tariffs on Canada, Mexico this Saturday
U.S. President Donald Trump has confirmed that he will implement 25% tariffs on all imports from Canada and Mexico this Saturday.
During a January 30 interview, Trump announced that, beginning February 1, he will impose 25% tariffs on all imports from Canada and Mexico while Canada’s Parliament remains suspended thanks to an order by Prime Minister Justin Trudeau.
“Number one is the people that have poured into our country so horribly and so much,” Trump told media. “Number two are the drugs, fentanyl, and everything else that have come into the country; and, number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of deficits.”
It’s unclear if Canada’s oil will be exempt from the tariff as Trump told reporters that oil “has nothing to do with it.”
Trump’s tariffs aim to force Canada and Mexico to take serious action against illegal drug smuggling and immigration which occurs at their borders.
Initially, the tariff was to take effect on his first day of office, January 20, but was postponed until February 1, leaving Canadians under two weeks to respond to his demands.
However, because Trudeau prorogued Parliament until March 24, little action has been taken by Canadian politicians to respond to Trump’s threats.
Trudeau, who is slated to resign once a new Liberal leader is selected, has told Canadians that Liberals are considering all options, including retaliatory tariffs.
“We will not hesitate to act,” Trudeau said at a meeting of the Council on Canada-U.S. Relations on January 17. “We will respond and, I will say it again, everything is on the table.”
Conservative Party leader Pierre Poilievre has demanded that Trudeau immediately reconvene Parliament on an “emergency” basis so Canada can deal with the looming tariffs.
“Canada is facing a critical challenge. On February 1st we are facing the risk of unjustified 25% tariffs by our largest trading partner that would have damaging consequences across our country,” wrote Poilievre in a news release Tuesday.
Meanwhile, polls have revealed that 77 percent of Canadians want an immediate election to deal with the tariff threat.
Ontario Premier Doug Ford has done just that, calling a snap election to take place on February 27. The election, according to Ford, allows him to secure a new “four-year” mandate from Ontario voters to respond to Trump’s tariffs.
News that the tariffs are to take effect also come after Trump has repeatedly suggested that he would like to annex Canada and make the country the “51st state” of America.
While Trump’s comments were initially passed over as a joke or trolling, Trump has persistently referred to Canada as the “51st state” and even threatened to use “economic force” to overtake Canada.
Trump claimed that there is a $200 billion trade deficit between Canada and the U.S. regarding spending on “subsidies” and the fact that the U.S. military is there to also “protect Canada.”
Just last week, Trump told the World Economic Forum (WEF), “We love Canada, but they might be better off as part of the United States.” He made the comments to suggest that Canada, as a way of avoiding the tariffs he is threatening, should just up and join the United States.
Trump’s repeated threats have drawn the ire of many Canadians, who boldly tell the president that Canada will remain its own country. Others have warned that the move to annex Canada would bring about the beginning of a one-world government.
Conservative Party of Canada leader Pierre Poilievre, who is likely to become prime minister in the next election, has had choice words for Trump. He has said Canada will “never” become a U.S. “state.”
“We are a great and independent country,” he continued. “We are the best friend to the U.S. We spent billions of dollars and hundreds of lives helping Americans retaliate against Al-Qaeda’s 9/11 attacks. We supply the U.S. with billions of dollars of high-quality and totally reliable energy well below market prices. We buy hundreds of billions of dollars of American goods.”
North Dakota Gov. Doug Burgum speaks to the Republican National Convention, July 17, 2024. (Screen Capture/CSPAN)
From the Daily Caller News Foundation
By Adam Pack
Senate Overwhelmingly Confirms Doug Burgum As Trump’s Interior Secretary
The Senate confirmed former North Dakota Gov. Doug Burgum in a bipartisan fashion to lead President Donald Trump’s Department of Interior Thursday evening.
Senators overwhelmingly approved Burgum’s nomination 79 to 18. Three senators did not vote. Under the prior administration, we went from a nation of energy dominance to a nation of energy dependence.
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America is an energy superpower. We should act like it. @DougBurgum and @ChrisAWright_ are America’s energy all-stars. I strongly support their nominations. pic.twitter.com/3o4xuan31r
— Sen. John Barrasso (@SenJohnBarrasso) January 30, 2025
Senate Republicans endorsed Burgum’s nomination, saying he was committed to reversing the work of his predecessor, former Interior Secretary Deb Haaland, to restrict energy resources. Haaland worked to block oil and gas leasing in development in Alaska.
“Governor Burgum knows that America’s natural resources are our greatest national asset,” Senate Majority Leader John Thune said Wednesday on the Senate floor prior to Burgum’s confirmation vote. “Too often, under the Biden administration, the Interior Department was the tip of the spear in restricting development of America’s resources.”
Burgum promised to prioritize energy abundance during his leadership over the Interior Department.
“The American people clearly placed their confidence in President Trump to achieve Energy Dominance,” Burgum wrote in his opening remarks to the Senate Energy and Natural Resources (ENR) Committee during his confirmation hearing on Jan 16. “Energy Dominance is the foundation of historic American prosperity, affordability for American families, and unrivaled national security.”
“President Trump’s Energy Dominance vision will end wars abroad and make life more affordable for every family by driving down inflation,” Burgum added. “President Trump will achieve these goals while championing clean air, clean water, and our beautiful land.”
Burgum won the support of a majority of Senate Democrats, including Democratic New Mexico Sen. Martin Heinrich who serves as the lead Democrat on the Senate ENR Committee.
“I clearly do not agree with Governor Burgum on every issue,” Heinrich wrote in a statement on Jan. 23. “However, I voted to confirm Governor Burgum’s nomination for Interior Secretary because I have found that a healthy relationship with the Secretary of Interior is critical to securing the best outcomes for the State of New Mexico.”
Trump has tasked Burgum with leading a newly-created interagency National Energy Council to cut regulations affecting the energy sector and harness private sector investment related to energy innovation. The president also appointed Burgum to a seat on the National Security Council, a rare appointment for an energy secretary.
Burgum served two terms as North Dakota’s governor beginning in December 2016. He launched a presidential run in June 2023, but struggled to gain traction and suspended his campaign that December. He endorsed Trump in January 2024 and served as a campaign surrogate throughout the remainder of the race.
Thune teed up confirmation votes Thursday evening on energy executive Chris Wright to lead the Department of Energy and former Republican Georgia Rep. Doug Collins to lead the Department of Veterans’ Affairs.
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