Next federal government should discard harmful energy policies—tariffs notwithstanding

Over the last decade, the Trudeau government missed countless opportunities to reduce Canada’s heavy reliance on the United States and instead introduced regulatory hurdles that hindered our energy sector and limited access to new markets

While the full extent of the damage from President Trump’s trade war remains unknowns, Canadians should understand that, with a federal election looming, shortsighted policies here at home have left Canada in a vulnerable position.

Oil and gas are Canada’s main exports and the U.S. is their primary destination. In 2023, nearly 97 per cent of Canada’s oil exports went to our southern neighbour, and the U.S. is our sole foreign market for our natural gas. This concentration of exports to a single destination has given the U.S. significant leverage. For example, Canada exports natural gas at discounted prices—up to 60 per cent lower than what American producers receive in U.S. markets. Similarly, our oil has been sold for less than what U.S. producers receive, with price differences exceeding 40 per cent in recent years. Selling our energy at discounted prices to the U.S. has cost Canadians tens of billions of dollars in lost revenues.

And yet, over the last decade, the Trudeau government missed countless opportunities to reduce Canada’s heavy reliance on the United States and instead introduced regulatory hurdles that hindered our energy sector and limited access to new markets. To unleash Canada’s oil and gas sector, the next government must reverse a whole set of harmful energy policies.

For example, the Northern Gateway pipeline designed to transport crude oil from Alberta to British Columbia’s coast. In 2016, one year after taking office, the Trudeau government cancelled this previously approved $7.9 billion project, which would have greatly expanded Canada’s access to Asian markets.

Then there’s the Energy East and Eastern Mainline pipelines from Alberta and Saskatchewan to the east coast. The Trudeau government effectively made the project economically unfeasible by introducing new regulatory hurdles, ultimately forcing the TransCanada energy company to withdraw from the project, which would have expanded access to European markets.

The record is equally bleak for liquified natural gas (LNG) export facilities, which could open access to overseas markets. Regulatory barriers and long approval timelines under the Trudeau government significantly hindered the development of the Énergie Saguenay LNG project in Quebec, the Repsol LNG plant in New Brunswick and the Pacific NorthWest LNG facility in B.C.

And when opportunity knocked to diversify our trading partners, the government failed to seize it. Following the Russian invasion of Ukraine, political leaders from Latvia, Ukraine, Germany, Greece and Poland turned to Canada seeking new LNG supply, but Trudeau insisted there was “no business case for LNG” and missed the chance to open new markets.

Finally, the Trudeau government’s Bill C-69 created massive uncertainty in project reviews and approvals by introducing vague assessment criteria including “gender implications” for major energy projects including pipelines and LNG export facilities. In fact, according to a recent report, which analyzed 25 major projects that entered the federal government’s review process between 2019 and 2023, almost every project submission remained stuck in the early stages (phase 1 or 2) of the four-phase process, underscoring the inefficiency of the review process.

Meanwhile, the Trudeau government’s Bill C-48 restricts Canadian exports to Asia by banning large oil tankers from B.C.’s northern coast. And its targeted emissions cap, which requires only the oil and gas sector to cut greenhouse gases by 35 per cent below 2019 levels by 2030, is designed to curtail energy production, further limiting Canada’s ability to meet global energy demands.

During the upcoming election campaign, Canadians should demand to hear how (or if) each party will remove barriers that hinder the development of energy projects and streamline approvals to unlock Canada’s untapped potential. Tariffs or not, Canada can’t afford to keep undermining its key export sector with regulatory barriers.

Julio Mejía

Policy Analyst

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute

Related Topics:#CanadaOilAndGas #ElmiraAliakbari #FraserInstitute #JulioMejía CanadaEnergyPolicy

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Fracking a win-win for workers and the environment in New Brunswick

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Economy

Fracking a win-win for workers and the environment in New Brunswick

Published on September 5, 2025

Todayville

From the Fraser Institute

By Alex Whalen

Wayne Long, MP for Saint John-Kennebecasis, waded into the long-standing debate on natural gas development in New Brunswick recently, bluntly telling Brunswick News “we need to frack.” Fracking refers to hydraulic fracturing, a process used to recover underground natural gas deposits. Long is right, and it’s important that New Brunswickers understand the economic opportunity inherent in natural gas, while separating fact from fiction when it comes to risks.

Estimates of New Brunswick’s Frederick Brook shale formation, a large underground deposit stretching from roughly Hampton to Sackville, suggest the province sits on approximately 80 trillion cubic feet of recoverable natural gas. At current market prices, the total value of this resource, if fully recovered, ranges from $186 billion to $221 billion. To be sure, such estimates are inherently uncertain and would materialize over a long period of time. However, even the province’s own estimates project $21 billion in investment with a “moderate” level of gas development.

Economic opportunities of this scale are rare and badly needed in New Brunswick. According to a recent comparison of employment earnings, New Brunswickers had the second-lowest median earnings ($32,175) among residents of all 10 Canadian provinces and 50 U.S. states. According to data published by Statistics Canada, wages in oil and gas are the highest among 22 categories of industry in Canada, topping $125,000 per year.

While a modest level of gas development has occurred in New Brunswick around the Sussex area, this resource is largely untapped. One of the main reasons is the moratorium on fracking implemented by the Gallant government in 2014. This ban is not supported by the facts.

In a wide-ranging review of scientific literature published by the Fraser Institute last year, my colleague Kenneth Green found that fracking does indeed carry risks, but these risks are manageable. For example, air pollution and water contamination are important factors that must be closely monitored when fracking is in place. Yet jurisdictions across North America safely recover natural gas while managing these risks. In the process, they grow their economies and boost the incomes of workers.

Moreover, development of natural gas carries environmental benefits, since the emissions produced by the consumption of natural gas are much lower than dirtier fuels such as coal. Another recent study found that if Canada were to double its natural gas production and export the additional supply to Asia as liquified natural gas (LNG) to displace emission-intensive coal in power generation, global emissions could be reduced by up to 630 million tonnes annually . For context, this reduction would be the equivalent of 89 per cent of Canada’s total greenhouse gas emissions.

As New Brunswick’s natural gas opportunity comes back into focus, the facts are clear: the province has an enormous economic opportunity to join the growing number of jurisdictions developing their natural gas resources. Fracking represents a win-win for both workers and the environment in New Brunswick.

Business

Canada’s economy teeming with troubling stats

Published on September 5, 2025

Todayville

From the Fraser Institute

By Jock Finlayson

It’s striking that Canada has around 100,000 fewer entrepreneurs than two decades ago, even though the population has increased dramatically over that time.

Earlier this week, we marked another Labour Day, and Canada’s job market is losing steam. The slowdown is occurring against the backdrop of unprecedented tariff hikes, persistent geopolitical tensions, and a stagnant Canadian economy. Nationally, employment fell by 40,000 between June and July, with the job losses concentrated in fulltime private-sector positions. Total employment in July was scarcely higher than it was in January (measured on a seasonally adjusted basis). Manufacturing and construction are among the industries that have posted sizable job declines so far in 2025.

The picture is less gloomy on a year-over-year basis. Employment in Canada rose by 1.5 per cent from July 2024 to July 2025. But the month-to-month pace of job creation has been decelerating. Meanwhile, the unemployment rate has been ticking higher. In July, Canada-wide unemployment stood at 6.9 per cent, up from 5.7 per cent 18 months ago. Job vacancy rates have also been falling. Young adults are bearing much of the burden of Canada’s slumping labour market. Oddly, even amid a recession-bound economy, the federal government inexplicably continues to admit large numbers of temporary foreign workers.

Digging deeper into the data—and going back further to the pre-COVID years—yields insight into the dynamics of Canadian job creation. Looking at the period from January 2019 to July 2025 (roughly six-and-a-half years), we can track the trends in three broad employment categories: private-sector payroll jobs, public-sector jobs and the self-employed.

Since the start of 2019, public-sector jobs are up by almost one-quarter, while private-sector payroll positions have increased by 10 per cent. Meanwhile, the number of self-employed Canadians declined over the same period, suggesting a deterioration of the climate for entrepreneurship in the country. That’s troubling.

Entrepreneurs and startup businesses are the lifeblood of a dynamic market economy. Indeed, economists recognize that a key marker of a thriving economy is a healthy rate of business formation. New businesses are an important source of innovation and fresh ideas. They also help to inject competitive vigour into both local markets and the wider economy—something that’s clearly necessary in Canada, given years of subdued business growth and the cartelization of large swathes of our economy. Accelerating business formation should be a top priority for governments at all levels. Supporting the commercial success of existing young firms is also crucial, given the outsized contributions they make to the overall economic growth process.

For entrepreneurs and others who invest in startup companies, the risk of failure is ever present. Many new businesses don’t survive. In the goods-producing sector of the Canadian economy, about 70 per cent of new businesses survive for at least five years; in the broad services-producing sector, the rate is lower (56 per cent). Ten-year survival rates are around 50 per cent in goods-producing industries and just 35 per cent in service-based industries. Becoming a businessowner/operator is not for the faint of heart.

Canada urgently needs more high-growth businesses. This means building a robust pipeline of new entrepreneurial ventures.

Unfortunately, we have been falling short in this area, with the rate of business startups diminishing. It’s striking that Canada has around 100,000 fewer entrepreneurs than two decades ago, even though the population has increased dramatically over that time.

Canadian policymakers would be wise to ask themselves why entrepreneurship is faltering. Governments should act to modify their tax, regulatory and industrial policies to establish an economic environment that’s more conducive to entrepreneurial wealth-creation and the growth of small and medium-sized businesses.