Can Canada afford to play hardball with its largest trading partner? Experts warn Canada has more to lose than the U.S. in an energy war
For interview requests, click here
Canada is waking up to a stark reality: the United States is no longer the reliable trade partner it once was. The shift has been sudden, with tariff threats and protectionist policies forcing Canada to rethink its economic strategy.
Prime Minister Justin Trudeau has said “all options are on the table,” including export taxes, as Canada considers how to respond to Trump’s tariffs.
A Nanos Research poll for Bloomberg News conducted between Jan. 31 and February 2024 found strong nationwide support for an export tax on Canadian goods shipped to the U.S., including oil, as retaliation for American tariff threats. The poll found 82 per cent of Canadians supported raising the price of oil exported to the U.S. Support was particularly high in Atlantic Canada, where nearly 90 per cent of respondents backed the idea.
Even in the Prairie provinces, where Canada’s oil resources are concentrated, 72 per cent of respondents supported an export tax—despite opposition from their premiers. Alberta and Saskatchewan’s leaders have publicly rejected the idea, suggesting the survey results put them at odds with most of their constituents.
 Canada’s energy supply is more vulnerable than most realize. A trade war with the U.S. could cut off oil and gas to Ontario and Quebec. |
| Recommended |
| Canada sabotaged its own oil industry and is now paying the price
|
| Eastern Canada’s energy security at risk as U.S. imports surge
|
| Here’s why Trump’s tariffs on Canada and Mexico will backfire
|
Beyond oil, the poll also found that 79 per cent of Canadians supported retaliatory tariffs on U.S. imports, even if it meant higher prices for consumers.
But can Canada afford to play hardball with its largest trading partner?
Energy remains one of Canada’s most powerful bargaining chips in a trade standoff. However, some experts warn that using it as leverage could expose Canada’s vulnerabilities rather than strengthen its position.
Energy security is becoming an increasingly critical issue as U.S.-Canada trade tensions rise, said Jackie Forrest, an energy researcher at the ARC Energy Research Institute. Speaking on a recent episode of the ARC Energy Ideas podcast, Forrest said the issue is not well understood across Canada.
“The concern is that in the worst-case scenario where the Americans want to hurt our country, they have the ability to stop all crude oil flows to Ontario,” she said. That action would also cut off most of the oil supply to Quebec.
This vulnerability stems from Canada’s dependence on U.S. infrastructure. The Enbridge Mainline, a key pipeline system transporting crude from Alberta to refineries in Ontario and Quebec, flows through the United States. Originally built in 1950, it connects Edmonton to Superior, Wis., before extending into Canada via Line 5—the segment delivering crude to Sarnia, Ont.
If the U.S. shut off the valve at Superior, Alberta oil would be unable to reach Eastern Canada, creating supply shortages. The Canadian Association of Petroleum Producers has warned that this is a serious strategic risk.
In 2020, Michigan’s governor attempted to shut down Line 5, citing environmental concerns about potential oil spills in the Straits of Mackinac. Although the pipeline remained operational after legal battles, the case highlighted how easily Canada’s oil supply could be disrupted.
Natural gas presents a similar problem. Ontario and Quebec rely on U.S. producers for nearly half of their natural gas consumption. As ARC Energy co-host Peter Tertzakian pointed out during the podcast:
“Tariffs or no tariffs, there is a real vulnerability there.”
Ontario Premier Doug Ford has threatened to cut off energy exports to the U.S. in response to American tariff threats.
“It would turn off the lights to a million-and-a-half Americans,” Ford said.
However, energy analysts caution that Canada may have more to lose than the U.S. in an energy war.
Drew Fagan, a professor at the Munk School of Global Affairs and Public Policy, told Global News that Canada should think carefully before escalating the situation.
“I’d be very careful about trying to get into a full war where they have a gun and we have a knife,” Fagan said.
Even in electricity trade, Canada’s leverage is weaker than it appears.
BC Hydro imported 13,600 gigawatt hours of electricity in 2024 at a cost of nearly $1.4 billion. Much of this power came from the U.S. and Alberta, where it was generated by fossil fuels.
While three U.S. states—Michigan, New York and Minnesota—do import electricity from Ontario, their reliance is limited.
Michigan imported 7,718 gigawatt hours from Ontario but produced 120,656 gigawatt hours domestically. New York imported 4,149 gigawatt hours while producing 124,039 gigawatt hours locally. Minnesota received just 66 gigawatt hours from Ontario in 2023.
This data suggests that if Canada cut off electricity exports, it would hurt U.S. states but not cripple them. Meanwhile, Canada remains highly dependent on American energy imports.
Canada has limited cards to play in this growing trade conflict. While there is widespread public support for export taxes and tariffs, retaliatory measures could backfire if not carefully planned.
Rather than reacting impulsively, Canada must diversify its trade relationships and reduce dependence on the U.S. over the long term. Relying on a single partner is no longer viable.
The key question isn’t whether Canada can retaliate, but whether it should. Playing tough without a solid strategy could weaken Canada’s economy more than it strengthens it.
Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.
Explore more on Trump administration, Energy security, Trade, Canadian economy
The views, opinions, and positions expressed by our columnists and contributors are solely their own and do not necessarily reflect those of our publication.
Troy Media is dedicated to empowering Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in fostering an informed and engaged public by delivering reliable content that strengthens community connections, enriches national conversations, and helps Canadians better understand one another.
