Trade threat makes clear to Canadians that 'energy is power'
Oil has been divisive. Alberta advocates hope this crisis sparks economic unity moment
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Nothing quite unites Canadians like a national sovereignty crisis, stoked by semi-serious musings about becoming the 51st state and more serious musings about devastating tariffs.
And for the first time in years, it appears people are acknowledging that a central part of Canada's current strength — even if it is a traditionally divisive issue — is the oil and gas sector.
Oil and gas exports are the nation's largest by far. Depending on whom you ask, oil and gas are now a powerful bargaining chip in a looming trade war with Trump, or a sector Canada must protect from tax or sanctions at all costs.
The two instincts are based on the same premise: the vital role energy plays in the North American economy. But they've led to divergent responses on what to do next in the face of 25 per cent tariffs, which could come into effect next month.
The industry has been beating the drum about its national significance for decades — through billions of dollars worth of lobbying, politicking, social licensing, legal challenging, carbon capturing and, some would argue, greenwashing.
The idea was even baked into the creation of Encana — both in its corporate name, a fusion of "energy" and "Canada," and in its mission to build a company strong enough to shield our energy assets from American interests.
But look where Encana, once the country's most valuable company, is now. The short answer is Denver (and it's now called Ovintiv).
The reasons are complicated. But the man who named and founded Encana, Gwyn Morgan, famously pointed the finger at Justin Trudeau in 2019.
Oil as a bargaining chip
Old wounds like this were picked afresh last week when Ottawa reportedly floated the idea of leveraging Alberta's oil and gas in a "Team Canada" strategy to counter Donald Trump's tariff threats.
Some critics quickly questioned why the federal government hadn't prioritized the sector before — especially when Alberta needed pipelines approved. Where was Team Canada then, a former energy minister asked on social media and in an email to supporters of Smith's party, the United Conservative Party.
Fully support Premier Smith protecting our oil and gas from a unilateral Ottawa export ban on energy. Some say we need Team Canada. That may have had more appeal if there had been a Team Canada to help us get our resources to market in the past. But that support wasn't there ⬇️ <a href="https://t.co/pcLXnOnGym">https://t.co/pcLXnOnGym</a>
—@sonyasavageIn response, Premier Danielle Smith refused to sign a pan-Canadian communique on the response to tariff strategy, distancing herself from the federal approach supported by other premiers.
Smith opposed any suggestion of reducing energy exports to the United States, Canada's largest trading partner, plainly stating her government will do everything to defend the sector.
"We will take whatever actions are needed to protect the livelihoods of Albertans from such destructive federal policies," Smith wrote on X.
Not the week to defend oil, but 'for oil to defend us'
Heather Exner-Pirot, director of energy, natural resources and environment at the Macdonald-Laurier Institute, a public policy think-tank based in Ottawa, says while she understands the "nuclear option" of cutting off oil would unfairly burden Alberta, she doesn't understand why Smith would try to reject the idea so early.
"Energy is power. And this [was] the week not to defend oil, but for oil to defend us," she told host Kathleen Petty on CBC's West of Centre podcast. "It's premature to be taking cards off the table."
- Cutting off oil is Canada's nuclear option. What would it mean if it happens?
- Watch this week's West of Centre with Kathleen Petty on YouTube
While some see oil as Canada's ultimate trump card, others question whether federal leadership can be trusted to wield it effectively.
Gary Mar, a former Alberta envoy in Washington, says there are legitimate reasons to be skeptical, pointing to what happened during another recent trade spat.
"For example, to support the EV industry and to be in lockstep with the United States, 100 per cent tariffs were placed on Chinese electric vehicles," he said on West of Centre, referencing the Canadian imposed surtax that came into effect last fall.
"How did the Chinese retaliate? They retaliated by putting restrictions on Canadian canola. Did anyone in Ontario care that this tradeoff was made? No. But was agriculture thrown under the bus in favour of manufacturing in Ontario? The answer is yes."
Beyond tariffs, a moment of reckoning
Disagreement over whether Canada should use oil to protect itself, or do everything it can to protect oil, may have created disharmony among leaders and the wider public, but it's not all bad, argues a political strategist who advised Naheed Nenshi on his recent successful campaign to lead the Alberta NDP.
"Right now, this threat, whether we should take it seriously or not, demonstrates why we need greater access for our energy, why we needed to build the infrastructure that this province and other federal governments have been advocating for decades," said Zain Velji, a partner with Northweather marketing agency.
Beyond what looks like a setback in the Team Canada approach, Velji says there are signs the tariff crisis could reopen old questions about pipelines, oilsands development and environmental goals.
"I feel like we're on this pathway of unity in which both grievances could have been aired and commitments could have been made about the future and what direction and why we need to be unified in the face of this massive threat in front of us," he said on West of Centre.
At the very least, Exner-Pirot says, this moment demonstrates just how big and important Canada's energy industry is. She hopes that, in time, Canadians can also realize oil is too vital of an asset to rely on only one customer — the U.S.
"We have been a complacent people, surely for the last decade, and it's been easy just to trade with the United States," she said. "I think we've been shaken out of our complacency at the very least.
"So beyond the tariffs, I'm much more hopeful about the ability of this country to build, to want to build things, to remove barriers to building, to focus on economic growth, to be strong with or without the United States, regardless of what Trump does."
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