Canada’s position as an energy exporter is its “strongest card” in trade talks with the United States, Energy and Natural Resources Minister Tim Hodgson said Friday as the clock ticks down to the review of the Canada-U.S.-Mexico Free Trade Agreement (CUSMA).
Ensuring Canada uses its energy sector as leverage in trade talks is going to be a priority going into his second year in office, Hodgson said at an event in Toronto.
“I want our energy and natural resources sectors to play the strategically important role it should be playing – as Canada’s strongest cards in the CUSMA renegotiation,” Hodgson said.
“I spent my whole life doing deals. Ultimately, it is about knowing which cards are your best and playing them effectively. Energy, electricity, forest products, minerals — these are our best cards.”
Canadian energy exports are critical for the U.S. energy security, analysis from TD Bank shows. In 2024, Canadian exports of energy products (oil, natural gas, power) to the U.S. amounted to nearly $170 billion.
The analysis shows that any tariffs on Canadian crude oil could lead to an immediate jump in U.S. gasoline prices of as much as $0.30-0.70 per gallon.
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In 2023, Ontario alone directly supplied electricity to 1.5 million U.S. homes across Michigan, Minnesota and New York, TD Bank analysis shows.
“Remove Canadian energy exports from the equation and the trade story flips. Ex-energy, the U.S. enjoys a trade surplus with Canada of around C$60 (US$45 billion),” the TD Bank report said.
Canada is also a key supplier of critical minerals to the U.S., it added.
Last week, U.S. President Donald Trump issued several pipeline permits to facilitate the transportation of crude oil and petroleum products between the U.S. and Canada, including a permit for constructing new pipeline infrastructure.
In his second year as energy minister, Hodgson said he will focus on creating a “coherent strategy” for electricity and nuclear energy.
“Because every major ambition we have, from AI to advanced manufacturing to mineral processing, depends on reliable and affordable electricity,” he said.
By spring of 2027, the federal government plans to have at least five to 10 new major projects either reach the final investment decision stage or even break ground on construction, Hodgson said.
Ottawa will also advance work on the Canada-Alberta pipeline deal.
Prime Minister Mark Carney and Alberta Premier Danielle Smith signed the memorandum of understanding (MOU) in November last year, laying the groundwork for a new pipeline.
The flagship proposal in the MOU is a bitumen pipeline from Alberta to Canada’s West Coast that would carry an additional 300,000 to 400,000 barrels per day destined for Asian markets.
The project “could add an average of $31.4 billion to our GDP every year for the next decade, equivalent to increasing Canada’s GDP by 1.1 percent annually,” Hodgson said.
“The MOU also includes plans for nuclear and AI data centres in Alberta, and new export infrastructure across western Canada,” he added.
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