Canada’s energy sector, long a cornerstone of North American prosperity, is at risk from federal policies that could weaken a century of cross-border cooperation, according to a new report released by the Montreal Economic Institute (MEI).“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 49th parallel,” said MEI researcher Taylor MacPherson. “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. Exports of hydrocarbons to the United States alone totaled C$169.8 billion in 2024, or 22% of all Canadian exports. Imports of U.S. hydrocarbons reached C$33.4 billion, or 4% of all goods imports. Total two-way energy trade exceeds C$200 billion annually, outstripping Canada’s entire trade with China, which stood at C$118.7 billion in 2024..The sector accounts for 10.3% of Canada’s GDP and 3.4% of employment, supporting nearly 700,000 jobs with average annual compensation in oil and gas reaching roughly C$200,000 — nearly triple the national average. Government coffers benefit too, with tens of billions collected in 2024-2025, including almost C$22 billion from Alberta alone.MacPherson warned that recent legislation has made energy development increasingly difficult. Laws such as the 2019 Impact Assessment Act, the proposed federal oil and gas emissions cap, and the Oil Tanker Moratorium Act on B.C.’s north coast have all introduced uncertainty or outright barriers to development. He said these policies risk undermining Canada’s position as a North American energy leader and could derail the government’s “energy superpower” ambitions.“This is not just money on a spreadsheet,” MacPherson said. “It is what funds our schools, our hospitals, and the services Canadians rely on. The government risks weakening our communities with its recent actions.”The MEI report underscores the importance of maintaining a strong, integrated North American energy market to safeguard both economic prosperity and energy security.Read the full report here.
