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 the Daily Caller News Foundation
During the latest marathon cabinet meeting on Dec. 2, Energy Secretary Chris Wright made news when he told President Donald Trump that “The biggest determinant of the price of energy is politicians, political leaders, and polices — that’s what drives energy prices.”
He’s right about that, and it is why the back-and-forth struggle over federal energy and climate policy plays such a key role in America’s economy and society. Just 10 months into this second Trump presidency, the administration’s policies are already having a profound impact, both at home and abroad.
While the rapid expansion of AI datacenters over the past year is currently being blamed by many for driving up electric costs, power bills were skyrocketing long before that big tech boom began, driven in large part by the policies of the Obama and Biden administration designed to regulate and subsidize an energy transition into reality. As I’ve pointed out here in the past, driving up the costs of all forms of energy to encourage conservation is a central objective of the climate alarm-driven transition, and that part of the green agenda has been highly effective.
Dear Readers:
As a nonprofit, we are dependent on the generosity of our readers.
Please consider making a small donation of any amount here.
Thank you!
President Trump, Wright, and other key appointees like Interior Secretary Doug Burgum and EPA Administrator Lee Zeldin have moved aggressively throughout 2025 to repeal much of that onerous regulatory agenda. The GOP congressional majorities succeeded in phasing out Biden’s costly green energy subsidies as part of the One Big Beautiful Bill Act, which Trump signed into law on July 4. As the federal regulatory structure eases and subsidy costs diminish, it is reasonable to expect a gradual easing of electricity and other energy prices.
This year’s fading out of public fear over climate change and its attendant fright narrative spells bad news for the climate alarm movement. The resulting cracks in the green facade have manifested rapidly in recent weeks.
Climate-focused conflict groups that rely on public fears to drive donations have fallen on hard times. According to a report in the New York Times, the Sierra Club has lost 60 percent of the membership it reported in 2019 and the group’s management team has fallen into infighting over elements of the group’s agenda. Greenpeace is struggling just to stay afloat after losing a huge court judgment for defaming pipeline company Energy Transfer during its efforts to stop the building of the Dakota Access Pipeline.
350.org, an advocacy group founded by Bill McKibben, shut down its U.S. operations in November amid funding woes that had forced planned 25 percent budget cuts for 2025 and 2026. Employees at EDF voted to form their own union after the group went through several rounds of budget cuts and layoffs in recent months.
The fading of climate fears in turn caused the ESG management and investing fad to also fall out of favor, leading to a flood of companies backtracking on green investments and climate commitments. The Net Zero Banking Alliance disbanded after most of America’s big banks – Goldman Sachs, J.P. Morgan Chase, Citigroup, Wells Fargo and others – chose to drop out of its membership.
The EV industry is also struggling. As the Trump White House moves to repeal Biden-era auto mileage requirements, Ford Motor Company is preparing to shut down production of its vaunted F-150 Lightning electric pickup, and Stellantis cancelled plans to roll out a full-size EV truck of its own. Overall EV sales in the U.S. collapsed in October and November following the repeal of the $7,500 per car IRA subsidy effective Sept 30.
The administration’s policy actions have already ended any new leasing for costly and unneeded offshore wind projects in federal waters and have forced the suspension or abandonment of several projects that were already moving ahead. Capital has continued to flow into the solar industry, but even that industry’s ability to expand seems likely to fade once the federal subsidies are fully repealed at the end of 2027.
Truly, public policy matters where energy is concerned. It drives corporate strategies, capital investments, resource development and movement, and ultimately influences the cost of energy in all its forms and products. The speed at which Trump and his key appointees have driven this principle home since Jan. 20 has been truly stunning.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
From Resource Works
Innovative housing solution minimizes community impact while supporting the massive labour force needed for the Woodfibre LNG project.
The Woodfibre LNG project — a national leader in Indigenous partnerships and a cornerstone of global energy security — relies on a large construction workforce that drives economic prosperity across the region. For many of these workers, “home” is a ship.
Refitted from a cruise liner into a dedicated accommodation vessel, or “floatel,” this innovative solution houses up to 600 workers near Squamish, B.C., while keeping pressure off local housing and minimizing the project’s community footprint.
These exclusive images, captured a year ago, offer a rare retrospective look inside the original floatel. MV Isabelle X. With a second accommodation ship, the MV Saga X, recently arrived, this photo essay gives a timely, ground-level view of life aboard: individual cabins, a full-service dining hall, recreation spaces and custom laundry facilities. It’s a glimpse into the offshore dormitory that anchors daily life for the crew bringing this vital energy project to completion.
An arcade room is seen on a “floatel” that Woodfibre LNG plans to use to house 600 construction workers at a liquefied natural gas export facility being built near Squamish, during a media tour in Vancouver, on Thursday, May 9, 2024. The ship arrived in B.C. waters in January after a 40-day journey from Estonia, where it had sheltered Ukrainian refugees, but the District of Squamish council voted three to four against a one-year permit for its use last week.
A dining area is seen on a “floatel” that Woodfibre LNG plans to use to house 600 construction workers at a liquefied natural gas export facility being built near Squamish, during a media tour in Vancouver, on Thursday, May 9, 2024. The ship arrived in B.C. waters in January after a 40-day journey from Estonia, where it had sheltered Ukrainian refugees, but the District of Squamish council voted three to four against a one-year permit for its use last week.
A cabin is seen on a “floatel” that Woodfibre LNG plans to use to house 600 construction workers at a liquefied natural gas export facility being built near Squamish, during a media tour in Vancouver, on Thursday, May 9, 2024. The ship arrived in B.C. waters in January after a 40-day journey from Estonia, where it had sheltered Ukrainian refugees, but the District of Squamish council voted three to four against a one-year permit for its use last week.
Bridgemans Services Group president Brian Grange stands at the stern on a renovated cruise ship known as a “floatel” that Woodfibre LNG plans to use to house 600 construction workers at a liquefied natural gas export facility being built near Squamish, during a media tour in Vancouver, on Thursday, May 9, 2024. The ship arrived in B.C. waters in January after a 40-day journey from Estonia, where it had sheltered Ukrainian refugees, but the District of Squamish council voted three to four against a one-year permit for its use last week.
A custom built heat pump unit that allows the ship to avoid using diesel while docked and at anchor is seen on a “floatel” that Woodfibre LNG plans to use to house 600 construction workers at a liquefied natural gas export facility being built near Squamish, during a media tour in Vancouver, on Thursday, May 9, 2024. The ship arrived in B.C. waters in January after a 40-day journey from Estonia, where it had sheltered Ukrainian refugees, but the District of Squamish council voted three to four against a one-year permit for its use last week.
The main entry and exit area for workers is seen on a “floatel” that Woodfibre LNG plans to use to house 600 construction workers at a liquefied natural gas export facility being built near Squamish, during a media tour in Vancouver, on Thursday, May 9, 2024. The ship arrived in B.C. waters in January after a 40-day journey from Estonia, where it had sheltered Ukrainian refugees, but the District of Squamish council voted three to four against a one-year permit for its use last week.
A renovated cruise ship known as a “floatel” that Woodfibre LNG plans to use to house 600 construction workers at a liquefied natural gas export facility being built near Squamish, is seen at anchor in the harbour in Vancouver, on Thursday, May 9, 2024. The ship arrived in B.C. waters in January after a 40-day journey from Estonia, where it had sheltered Ukrainian refugees, but the District of Squamish council voted three to four against a one-year permit for its use last week.
A tugboat and water taxi are seen docked at a renovated cruise ship known as a “floatel” that Woodfibre LNG plans to use to house 600 construction workers at a liquefied natural gas export facility being built near Squamish, at anchor in the harbour in Vancouver, on Thursday, May 9, 2024. The ship arrived in B.C. waters in January after a 40-day journey from Estonia, where it had sheltered Ukrainian refugees, but the District of Squamish council voted three to four against a one-year permit for its use last week.
All photos credited to THE CANADIAN PRESS/Darryl Dyck
Resource Works News
Canadians will soon be versed in massive West Coast LPG mega-project
Keynote address of Premier Danielle Smith at 2025 UCP AGM
Canada Needs an Alternative to Carney’s One Man Show
Net Zero goal is a fundamental flaw in the Ottawa-Alberta MOU
-
Energy1 day agoCanada following Europe’s stumble by ignoring energy reality
-
International15 hours agoFBI may have finally nabbed the Jan. 6 pipe bomber
-
Business1 day agoCanada’s climate agenda hit business hard but barely cut emissions
-
COVID-199 hours agoUniversity of Colorado will pay $10 million to staff, students for trying to force them to take COVID shots
-
MAiD2 days agoFrom Exception to Routine. Why Canada’s State-Assisted Suicide Regime Demands a Human-Rights Review
-
espionage15 hours agoDigital messages reportedly allege Chinese police targeted dissident who died suspiciously near Vancouver
-
Business2 days agoCarney government should privatize airports—then open airline industry to competition
-
Censorship Industrial Complex1 day agoConservative MP Leslyn Lewis slams Liberal plan targeting religious exemption in hate speech bil