Economy
Canada as an energy superpower would empower thousands of families for generations
From Resource Works
By Geoff Russ
What does the future hold if Canada can become an energy superpower?
For the past 40 years, the fortunes of countless Canadian communities have risen and fallen with the strength of our energy sector. Oil booms in Alberta generated enormous prosperity and created hundreds of thousands of jobs, invigorating resource towns and rural Canada more generally. The existence of nuclear energy in Ontario requires thousands of workers, and its future expansion will generate thousands more. Energy is the economic lifeline for thousands of young and maturing families, but they are not invulnerable.
Global market swings have buffeted these jobs, as have changing provincial and federal policies, as well as international political shifts.
In the middle of the 1980s, oil prices collapsed and shocked Alberta and employment rose from four to 10 per cent as oil and gas jobs disappeared overnight. This was echoed in 2008 and 2014 when lurches in oil prices hit communities in places like Fort McMurray in Alberta, Fort St. John in northern British Columbia, and Estevan, Saskatchewan.
Every cycle of boom and bust was accompanied by hardship, but the people in these communities proved their resilience by rallying and holding onto their livelihoods.
Today, the Canadian energy sector still supports about 200,000 workers with direct employment and up to 400,000 more indirectly. However, as in years past, these workers and their families are subject to global tides, and none has been dictating those flows more than President Donald Trump and his wielding of tariffs to reshape the world economy.
The correct response is for Canada to diversify its trade and expand its energy infrastructure to grow the reach of Canadian energy, our most valuable and important export, and one of the most plentiful job creators in our arsenal. Fortunately, both of Canada’s two major parties, the Liberals and Conservatives, have reached a strong measure of agreement on this matter.
Our rookie prime minister, Mark Carney, has put forward a plan to transform Canada into an “Energy Superpower”. His plan is intended to ensure Canada’s economic security through new trade partnerships around the world and make all forms of Canadian energy competitive.
Some provinces are already charging ahead, with Ontario’s provincial government announcing plans to build Canada’s first small modular reactor (SMR) by 2030, which is projected to power over 300,000 homes and create up to 18,000 jobs. The existing Bruce Power facility in Kincardine already supports 4,200 jobs, and is a pillar of the province’s energy grid.
Crucial to Carney’s plan are faster, streamlined project reviews paired with true Indigenous partnerships, along with plans for a national energy corridor. This could have a transformative impact on the security and health of energy-centric communities. Moving beyond the debate about questioning the obvious need for new projects towards focusing on execution is a welcome breath of fresh air.
There are concerns in some communities about how shortcutting the consultation process and existing oversights may impact local communities, especially Indigenous groups. Resolving these in an equitable and permanent manner will be part of this positive transformation, setting new precedents for economic development in Canada that includes meaningful considerations and involvement for the growing Indigenous economies in BC and across the country.
When it comes to people, however, the mounting job losses over the uncertain economic climate make it imperative to protect jobs and clear the way for new ones. The impact of resource projects on communities like Hope have demonstrated how a reliable industry empowers families. Over 5,400 jobs are created for every $1 billion spent in the oil and gas sector.
The route of the Trans Mountain pipeline ran through Hope, and it revitalized the local economy with job creation and renewal. Pipeline workers not only brought money into Hope, but sprang into action to assist in local firefighting and flood repairs, revealing how the energy sector brings far more to communities than money.
Emulating this across the board is a complicated but essential task. The tightrope between environmental protections and resource development is a delicate one, but Canada has no choice but to walk it with purpose.
Prime Minister Carney’s pledge to make Canada an “Energy Superpower” will mean making choices about economic power, job creation, and locking Canada into its seat at the global energy table.
That means collaboration with people, respecting Indigenous rights, and anchoring policy in the experiences of workers and their families. Trump’s shakeup of the global economy is fraught with peril, but for Canada, it should bring opportunity for a fresh start.
Most importantly, however, it would ensure that hundreds of thousands more Canadians and their families, as well as their communities, can look forward to a bright future.
From the Fraser Institute
Prime Minister Carney recently unveiled his new cabinet, and he made some changes in some key policy areas including Energy and Natural Resources, Environment and Climate Change, and Transport and Internal Trade. What do these cabinet picks tell us about the potential policy focus of Carney’s government moving forward?
At the helm of the Energy and Natural Resource portfolio, Carney appointed Timothy Hodgson, a former banker and chair of Ontario’s massive Hydro One electricity utility. A quick search of Hodgson’s previous experience and opinions on matters of energy and natural resource policy comes up rather dry—he is something of a cypher. Acquaintances are quoted in several articles suggesting he has a pragmatic, pro-business orientation, but that is about all we can glean.
Still, what we do know is that Hodgson is replacing Jonathan Wilkinson, previously a supporter of highly aggressive greenhouse gas emission reductions, and aggressive regulation in the energy and natural resource policy spaces when part of Trudeau’s cabinet. So, with a mostly blank slate to stand on, and an ostensibly pragmatic “banker” mentality, we can expect (hope?) that Minister Hodgson blazes a less extreme path forward on energy and natural resource issues, balancing in a more even-handed fashion protection of the environment and natural resources with Canada’s need for economic productivity.
Hodgson’s partner on the energy, natural resource environmental policy front will be Julie Dabrusin, new Minister of Environment and Climate Change, replacing Uber-environmentalist Steven Guilbeault. Dabrusin was previously Secretary to the Minister of Environment and Climate Change, and Secretary to the Minister of Natural Resources in the Trudeau government. The most logical expectation would be to expect she will continue to champion Trudeau-esque policies, tempering any hopes we might have for the potentially more moderate Minister Hodgson as bellwether of Canada’s energy, natural resource and environmental policies.
Finally, Carney appointed Chrystia Freeland as Minister of Transport and Internal Trade. Freeland is a strong believer in the climate crisis, an intense regulator thereof, and seems to believe that transportation must be electrified, pedalized and mass-transificated (okay, I made that last term up) to save the planet. So, anyone hoping for a move away from the green-transportation agenda, away from an all electric-car, mass-transit oriented future, and back to something favouring (or at least not-demonizing) an automobile-centric lifestyle might want to rein in their expectations.
Unfortunately, in Carney’s cavalcade of cabinet officials, he did not create a new Minister of Regulatory Reform and Right-Sizing (again, my term). One of Canada’s biggest public policy illnesses is its plague of regulations. Canada is drowning under a mountain of regulatory red-tape and badly needs a minister with scissors. Canada wants no part of a U.S.-style Department of Government Efficiency (DOGE), but a Minister of Regulatory Reform and Right-Sizing, akin to what British Columbia had briefly in 2001, would be a policy tonic Canada needs badly.
Little is known about exactly where the bulk of Prime Minister Carney’s new cabinet will take us, but the safe betting—in areas of environment, natural resources, climate change and transportation—is that we’re likely to see a continuance of Trudeau-era policies, though promulgated by somewhat more bland less-obviously-zealous eco-warriors. Time will tell.
Kenneth P. Green
From the Fraser Institute
By Jake Fuss and Grady Munro
Some analysts compare Canada’s fiscal health with other countries in the Group of Seven (G7) to downplay concerns with how Canadian governments run their finances. And while it’s true that Canada’s finances aren’t as bad some other countries, the data show Canada’s finances are deteriorating fastest in the G7, and if we’re not careful we may lose any advantage we currently have.
The G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) represents seven of the world’s most advanced economies and some of Canada’s closest peer countries. As such, many commentators, organizations and governments use Canada’s standing within the group as a barometer of our fiscal health. Indeed, based on his oft-repeated goal to “build the strongest economy in the G7,” Prime Minister Carney himself clearly sees the G7 as a good comparator group for Canada.
Two key indicators of a country’s finances are government spending and debt, both of which are often measured as a share of gross domestic product (GDP) to allow for comparability across jurisdictions with various sized economies. Government spending as a share of GDP is a measure of the overall size of government in a country, while government debt-to-GDP is a measure of a country’s debt burden. Both the size of government in Canada and the country’s overall debt burden have grown over the last decade.
This is a problem because, in recent years, government spending and debt in Canada have reached or exceeded thresholds beyond which any additional spending or debt will most likely harm economic growth and living standards. Indeed, research suggests that when government spending exceeds 32 per cent of GDP, government begins to take over functions and resources better left to the private sector, and economic growth slows. However, the issues of high spending and debt are often downplayed by comparisons showing that Canada’s finances aren’t as bad as other peer countries—namely the rest of the G7.
It’s true that Canada ranks fairly well among the G7 when comparing the aforementioned measures of fiscal health. Based on the latest data from the International Monetary Fund (IMF), a new study shows that Canada’s general government (federal, provincial and local) total spending as a share of GDP was 44.7 per cent in 2024, while Canada’s general government gross debt was 110.8 per cent of GDP. Compared to the G7, Canada’s size of government ranked 4th highest while our overall debt burden ranked 5th highest.
But while Canada’s size of government and overall debt burden rank middle-of-the-pack among G7 countries, that same study reveals that Canada is not in the clear. Consider the following charts.
The first chart shows the overall change in general government total spending as a share of GDP in G7 countries from 2014 to 2024. Canada observed the largest increase in the size of government of any G7 country, as total spending compared to GDP increased 6.34 percentage points over the decade. This increase was nearly three times larger than the increase in the U.S., and both France and Italy were actually reduced their size of government during this time.
The second chart shows the overall change in general government gross debt as a share of GDP over the same decade, and again Canada experienced the largest increase of any G7 country at 25.23 percentage points. That’s considerably higher than the next closest increases in France (16.97 percentage points), the U.S. (16.36 percentage points) and the U.K. (14.13 percentage points).
Simply put, the study shows that Canada’s finances have deteriorated faster than any country in the G7 over the last decade. And if we expand this comparison to a larger group of 40 advanced economies worldwide, the results are very similar—Canada experienced the 2nd highest increase in its size of government and 3rd highest increase in its overall debt burden, from 2014 to 2024. Some analysts downplay mismanagement of government finances in Canada by pointing to other countries that have worse finances. However, if Canada continues as it has for the last decade, we’ll be joining those other countries before too long.
Jake Fuss
Director, Fiscal Studies, Fraser Institute
Grady Munro
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