Ottawa: Highlighting Canadian Oil's Vital Role to the U.S.

In the wake of Donald Trump's threat to impose a 25-per-cent tariff on Canadian goods, Ottawa must emphasize the strategic importance of Canadian oil to U.S. energy security and economic growth. The Canadian Association of Petroleum Producers (CAPP) has urged Ottawa to take Trump's threat seriously and engage in open dialogue with the incoming U.S. administration.

The U.S. relies heavily on Canadian crude oil, with Canada accounting for 52 per cent of U.S. gross oil imports and 24 per cent of U.S. refinery throughput in 2023. Furthermore, Canadian crude oil exports to the U.S. contributed $124 billion to Canada's economy in 2023. Alberta, the leading Canadian province in oil production, contributed 87.4 per cent of Canada's crude oil exports to the U.S. in 2023.

Ottawa must stress the mutual benefits of Canadian oil exports to the U.S., highlighting the significant job creation and economic growth facilitated by the energy trade. Targeted outreach to key U.S. Petroleum Administration for Defense Districts (PADDs), such as PADD 2 (U.S. Midwest) and PADD 3 (U.S. Gulf Coast), which account for 61.8 per cent and 18.6 per cent of Canadian crude oil imports respectively, can underscore the importance of Canadian oil to regional economies.

Moreover, Ottawa should collaborate with local governments to showcase the positive environmental impact of Canadian oil, such as reduced emissions due to the use of cleaner-burning fuels. By demonstrating the mutual benefits of continued Canadian oil exports, Ottawa can foster a strong, bipartisan alliance with U.S. states and local governments to advocate for the importance of Canadian oil to the U.S. economy.

In conclusion, Ottawa must prioritize open dialogue with Washington to ensure Trump understands the strategic importance of Canadian oil to U.S. energy security and economic growth. By highlighting the significant economic and environmental benefits of Canadian oil exports to the U.S., Ottawa can help mitigate the risk of tariffs and promote a more balanced understanding of the Canada-U.S. energy relationship.