Energy trade with the U.S. alone is over C$80 billion more than all merchandise trade between Canada and China

Canada’s energy sector is a cornerstone of North American prosperity, but a number of federal policies have weakened its foundation over the past decade, observes a new MEI publication released this morning.

“For a century, this North American energy machine kept churning, irrespective of political winds and to the betterment of everyone on both sides of the 49^th parallel,” says Taylor MacPherson, associate researcher at the MEI and author of the report. “But we can’t take it for granted; we must be steadfast in protecting this unique, mutually beneficial relationship.”

Canada is the world’s fourth-largest oil producer, fifth-largest natural gas producer, and third-largest hydroelectric generator.

Canadian exports of hydrocarbons—commodities such as crude oil, natural gas, natural gas liquids, and refined petroleum—to the United States alone totalled C$169.8 billion in 2024. This represents 22 per cent of all goods Canada exported that year.

Canada imported C$33.4 billion in U.S. hydrocarbons, representing 4 per cent of all goods imports.

“This partnership is a genuine two-way lifeline,” said Mr. MacPherson. “In the winter, U.S. gas backs up Ontario during the frigid months, while Canadian gas feeds Californian power plants in the summer, so neither country is exposed to excessive price shocks.”

The two nations have complementary market structures: for instance, Canada produces heavy crude ideal for America’s complex refineries. In the meantime, U.S. shale fields produce light oil that eastern Canadian refineries can use.

Two-way energy trade stands at over C$200 billion annually, equalling 13 per cent of all Canadian merchandise trade. This is larger than Canada’s entire two-way merchandise trade with China in 2024, which stood at C$118.7 billion.

The energy sector accounts for 10.3 per cent of Canada’s GDP in 2023 and 3.4 per cent of employment, totalling 697,000 jobs.

Employment in the sector is among the best paid in the country, with average annual compensation in oil and gas reaching roughly C$200,000, compared to just over C$75,000 across all industries.

Total contributions to government coffers from the industry are substantial, with tens of billions of dollars collected in 2024-2025, including close to C$22 billion by Alberta alone.

“This is not just money on a spreadsheet,” says Mr. MacPherson. “It is what funds our schools, our hospitals, and the services Canadians rely on. The government risks weakening our communities with its recent actions.”

Recent legislation has made the development of the energy sector increasingly difficult, which risks undermining this integration, to everyone’s detriment.

In 2019, the Impact Assessment Act replaced earlier legislation, and uncertainty created by its adoption has been reported to be a contributor to the drop in Canadian investment.

Another emerging threat has been the federal government’s proposed oil and gas emissions cap. If Ottawa were to remove it, as has been suggested, it would be removing what has long been perceived as a production cap by the industry.

Canada’s 2019 Oil Tanker Moratorium Act bans large crude and “persistent” oil tankers from B.C.’s north coast, effectively shutting the door on any major export terminal at Prince Rupert, Kitimat, or nearby ports.

“North American energy integration is a marvel of pipelines and power lines,” says Mr. MacPherson. “A confluence of harmful legislation risks toppling Canada as an energy leader, and will leave us a far cry from becoming the ‘energy superpower’ promised by Prime Minister Carney.”

You can read the Economic Note here.

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

Kelsi Sheren

How the 2025 Federal Budget Demands More From Those Who’ve Already Given Everything

I’ve lived the word sacrifice.

Not the political kind that comes in speeches and press releases the real kind. The kind Mark Carney wouldn’t know if it slapped him in the face. The kind that costs sleep, sanity, blood. I’ve watched friends trade comfort for duty, and I’ve watched some of them leave in body bags while the rest of us carried the weight of their absence. So when the Prime Minister stood up this year and told Canadians the new budget would “require sacrifice,” I felt that familiar tightening in the gut the one every veteran knows. You brace for impact. You hope the pain lands in a place that makes sense.

It didn’t.

Six months into Mark Carney’s limp imitation of leadership, it’s painfully clear who’s actually paying the bill. The 2025 budget somehow managing to bleed the country dry while still projecting a $78-billion deficit shields the political class, funnels money toward his network of insiders, and then quietly hacks away at the one department that should be sacrosanct: Veterans Affairs Canada.

If there’s one group that’s earned the right to be spared from government-imposed scarcity, it’s the people who carried this country’s flag into danger. Veterans don’t “symbolize” sacrifice they embody it on the daily And when Ottawa tightens the belt on VAC, the consequences aren’t abstract. They’re brutal and direct, causing nothing but more death and destruction. But Mark Carney doesn’t lose sleep over veterans killing themselves.

Punishment disguised as budgeting for a veteran means the difference between keeping a roof or sleeping in a truck. Punishment disguised as budgeting means PTSD left untreated until it turns a human being into another suicide statistic. Punishment disguised as budgeting means a veteran choosing between groceries and medication because some number-shuffler in Ottawa wants to pretend they’re being “responsible.”

This isn’t fiscal restraint it’s political betrayal wrapped in government stationery. Ottawa sells it as hard choices, but the hardness always falls on the backs of the same people: the ones who already paid more than their share, the ones who can’t afford another hit. Carney and his cabinet won’t feel a thing. Not one missed meal. Not one sleepless night. Not one flashback.
But the men and women who already paid in flesh? They’re the ones being told to give more.

That’s not sacrifice.
That’s abandonment dressed up as fiscal policy.

And Canadians need to recognize it for what it is a government that demands loyalty while refusing to give any in return. The fine print in the government’s own documents reveals what the slogans won’t.

Over the next two years, VAC plans to cut $2.227 billion from its “Benefits, Services and Support” programs. [2] Broader “savings initiatives” reach $4.4 billion over four years, much of it through reductions to the medical-cannabis program that thousands of veterans rely on to manage chronic pain and PTSD. [3] Independent analysts estimate yearly losses of roughly $900 million once the cuts are fully implemented. [4]

To put that in perspective: no other department is seeing reductions on this scale. Not Defence, not Infrastructure, not the Prime Minister’s Office thats for damn sure. Only the people who’ve already paid their debt to this country are being asked to give again.

The government’s line is tidy: “We’re not cutting services we’re modernizing. Artificial Intelligence will streamline processing and improve efficiency.”

That sounds fine until you read the departmental notes. The “modernization” translates into fewer human case managers, longer waits, and narrower eligibility. It’s austerity dressed up as innovation. I’ve coached veterans through the system. They don’t need algorithms; they need advocates who understand trauma, identity loss, and the grind of reintegration. They need empathy, not automation.

This isn’t abstract accounting. Behind every dollar is a life on the edge, the human cost and toll is very real.

• Homelessness: Veterans make up a disproportionate number of Canada’s homeless population. Cutting benefits only deepens that crisis.
• Mental Health: Parliament’s ongoing study on veteran suicide shows rising rates of despair linked to delays and denials in VAC services. [5] Knowing MAID for mental illness alone in 2027 will take out a significant amount of us.
• Food Insecurity: A 2024 VAC survey found nearly one in four veterans reported struggling to afford basic groceries. That’s before these cuts.

We talk about “service” like it ends with deployment. It doesn’t. Service continues in how a nation cares for those who carried its battles, and this doesn’t include the cannabis cut to medication or the fight’s we have to fight when they tell us our injuries are “not service related”

The insult is magnified by the timing. These cuts were announced just days before November 11 Remembrance Day, when Canadians bow their heads and say, “We will remember them.”

Apparently, the government remembered to draft the talking points but forgot the meaning behind them, not a single one of the liberal government should have been allowed to show their faces to veteran’s or at a ceremony. They’re nothing but liars, grifters and traitors to this nation. Yes I’m talking about Jill McKnight and Mark Carney.

The budget still runs the second-largest deficit in Canadian history. [6]
Veteran cuts don’t fix that. They barely dent it. What they do is let the government say it’s “finding efficiencies” while avoiding the real structural overspending that created the problem in the first place. When a government chooses to protect its pet projects and insider contracts while pulling support from veterans, that’s not fiscal discipline it’s moral cowardice. The worst part is that This isn’t an isolated move. It fits a six-month pattern: large, attention-grabbing announcements about “reform,” followed by fine print that concentrates power and shifts burden downward. Veterans just happen to be the first visible casualty.

The same budget expands spending in other politically convenient areas green-transition subsidies, digital-governance infrastructure, and administration while the people who once embodied service are told to tighten their belts.

As a combat veteran, I know what it’s like to come home and realize that the fight didn’t end overseas it just changed terrain. We fought for freedom abroad only to watch bureaucratic neglect wage a quieter war here at home. Veterans don’t ask for privilege. They ask for respect, for competence, for follow-through on the promises this country made when it sent them into harm’s way.

Here’s what really needs to change, the liberal government has to go, thats step one. Restore VAC funding immediately. Any “savings” plan that touches benefits, services, or support should be scrapped. End the AI façade. Efficiency can’t replace empathy. Keep human case workers who understand the veteran experience. Audit and transparency. Publish a detailed breakdown of where VAC funds are cut and who approved it. Canadians deserve to see the receipts. National accountability. Every MP who voted for this budget should face veterans in their constituency and explain it, face-to-face.

Budgets are moral documents. They show what a country values. By slashing VAC while running record deficits, this government declared that veterans are expendable line items, not national obligations. The Prime Minister promised “shared sacrifice.” But the only people truly sacrificing are the ones who already gave more than most Canadians ever will.

Sacrifice isn’t about spreadsheets; it’s about service. It’s what every veteran understood when they raised their right hand. This government’s brand of sacrifice asking wounded soldiers to pay for political mismanagement isn’t austerity. It’s abandonment.

Canada owes its veterans more than a wreath once a year. It owes them respect written into every budget, not erased from it.

KELSI SHEREN

Footnotes

[1] The Guardian, “Canada’s 2025 Federal Budget Adds Tens of Billions to Deficit as Carney Spends to Dampen Tariffs Effect,” Nov 5 2025.
[2] True North Wire, “Liberal Budget to Cut $4.23 Billion from Veterans Affairs,” Nov 2025.
[3] StratCann, “Budget 2025 Includes Goal of Saving $4.4 Billion in Medical Cannabis Benefits,” Nov 2025.
[4] Canadian Centre for Policy Alternatives, “Where Will the Federal Government Cut to Pay for Military Spending and Tax Cuts?” Nov 2025.
[5] House of Commons Standing Committee on Veterans Affairs, “Study on Veteran Suicide and Sanctuary Trauma,” ongoing 2025.
[6] CBC News, “Federal Budget 2025 Deficit Second Largest in Canadian History,” Nov 2025.