The CEOs of Canada’s largest oil and gas companies are using the fear of U.S. tariffs to unshackle themselves from government regulation and profit from crisis, the country's federal energy minister said.
In an interview with BIV, Minister of Energy and Natural Resources Jonathan Wilkinson pushed back against the CEOs of the 10 of the largest oil and gas companies and the four largest pipeline companies in Canada, after they wrote an open letter to federal political leaders detailing their plan to strengthen the country’s economy.
The plan included declaring an “energy crisis” and using emergency powers to speed up development of key projects in the “national interest.”
The executives also called on Ottawa to eliminate the federal government’s cap on emissions; reassess the West Coast limit on oil tankers; and perhaps most significantly, repeal the carbon levy on large industrial emitters.
“Ottawa’s elected eco-extremists have done everything they can to keep our oil and gas in the ground — that has to change now,” wrote Alberta Premier Danielle Smith in her own open letter Thursday.
Wilkinson said the comments represent an about-face by industry leaders, who had spent years publicly backing the industrial price on carbon as a mechanism to modernize high-emitting industries.
Company executives and Alberta's premier are using U.S. President Donald Trump as an excuse to say: “We don't care about climate change. We don't care about carbon emissions. We just want to be able to do whatever it is that we're going to do,” said the minister.
Oil and gas executives flip positions on industrial carbon pricing
In his own letter to CEOs, Wilkinson pointed out comments Suncor president and chief executive officer Rich Kruger made at a hearing at the House of Commons in June 2024.
“I do support a price on carbon across the economy," Kruger said at the time, “because I believe that will drive the innovation, the economic incentives on all of our part to continue to improve our business."
Derek Evans, executive chairman of the Pathways Alliance oil industry group also took a very different stand in previous comments.
"The advice I would give Pierre Poilievre is carbon policy is going to be absolutely critical to maintain our standing on the world stage," Evans said last year.
"We've talked for 40 years about climate change. And we've done very, very little about it."鈥�
鈥媁ilkinson said he had no warning the CEOs were going to flip their position and is “frustrated” they weren’t honest with him. He said they seemingly looked “to profit from actions being taken south of the border — to the long-term detriment of your shareholders and Canadians generally.”
“After spending millions of dollars over the past few years speaking to your sector's commitment to environmental sustainability — you arrive here,” as he put it in his letter.
Barrelling toward 'moment of conflict'
Kathryn Harrison, a political science professor studying climate policy at the University of British Columbia, said Wilkinson’s move to oppose oil and gas executives comes as several undercurrents in climate policy come to a head with realities on the ground.
Canada has committed to reducing its overall emissions 40 per cent below 2005 levels by 2030. Oil and gas operations make up about a third of the country’s overall emissions, meaning federal targets would be nearly impossible without changes to the fossil fuel industry.
“It creates this moment of conflict,” said Harrison. “How do we meet our Paris agreement target without impacting production from the oil and gas industry?”
At the same time, support for climate policy has weakened across Canada in the past five years as voters looked to other crises like the COVID-19 pandemic and inflation, said Harrison. Even the floods and heat dome that killed more than 600 people in 2021 seems like a distant memory for some, she said.
“I've honestly been shocked by how short term the memory is, and I think it's because, you know, many people are struggling financially,” Harrison said.
Conservative Party Leader Pierre Poilievre's push to “axe” the consumer price on carbon further undermined support in federal climate policy.
Then came 2025 and the U.S. administration’s move to threaten, impose and dangle tariff after tariff on goods from Canada.
Pushing back against the threats, the Liberal Party's polling numbers have surged, especially under Prime Minister Mark Carney. The former banker immediately eliminated the consumer carbon tax.
In response, Poilievre has focused his political attacks on Carney and expanded his opposition to other aspects of federal climate policy. On Monday, the Conservative leader vowed to if elected. Two days later, the calling for the same thing.
“There is an understandable push to diversify Canada's export markets, and the oil and gas industry is seizing this moment to call for the unravelling of everything,” Harrison said.
A pillar of Canada's climate and industrial policy
After meeting with premiers from across Canada Friday, Carney said his government would move to enact a policy of “free trade by Canada Day” and set up a “one project, one review” system to fast-track the approval of major infrastructure projects.
Carney also said his government, if re-elected, would keep the carbon emissions cap and focus on major investments in carbon capture technology. Draft regulations tabled by Ottawa would require producers to cut emissions by about one-third over the next eight years.
Little was said about Canada’s industrial price on carbon, which is expected to account for a third of a national decline in greenhouse gasses in the coming years.
Past has revealed many of Canada's largest oil and gas emitters have paid the lowest price for their carbon under the industrial output-based pricing system. Multi-year have also been provided to big LNG projects in B.C., documents have shown.
Despite those shortcomings, there are few programs that rival industrial carbon pricing, said Dave Sawyer, principal economist with the Canadian Climate Institute.
“It’s the single biggest emission-reducing program — provincial or federal — in Canada,” said Sawyer. “Pick a policy and it’s bigger.”
An industrial price on pollution works by applying an eight to 12 per cent levy on carbon released by large emitters. When a company in the program reduces its emissions, it receives credits — currently worth about $30 per tonne — that can be sold for cash on an open market to other companies so they can cover their own carbon pollution.
The system has proved cost effective since Alberta first rolled it out in 2007, said Sawyer. Since then, and Quebec have come up with their own version of industrial carbon pricing. The federal program applies to the rest of Canada's provinces and territories.
Across all jurisdictions, the prospect of credits has attracted billions of dollars of investment into Canada.
More than $60 billion at stake, says economist
Sawyer recently calculated that in Alberta alone, companies have banked $5 billion in credits. If the industrial price of carbon were eliminated, those assets would be wiped off the books.
The industrial price on carbon helps bankroll everything from small-scale agricultural projects to big investments in heavy industry, green energy projects, and decarbonization programs to make pulp mills and steel plants more efficient and more competitive.
If the system collapses, Sawyer calculated at least $57 billion in investment across more than 70 major projects would be put at risk.
“That’s a conservative estimate,” said the economist. “You basically flip the project’s economics.”
The price on large emitters is meant to reduce greenhouse gases, but it’s also an industrial policy that allows Canadian manufacturers and producers to modernize equipment and access markets that want low-carbon products.
Europe is in the process of rolling out carbon border adjustments — policies that will place tariffs on products whose manufacturing led to an out-sized release of emissions.
Sawyer analyzed about $3.8 billion in Canadian goods — mostly fabricated steel products — going to Europe. He said they would face up to $100 million in annual tariffs by 2026.
“That’s a lot in competitive markets,” said the economist.
Canada poised to be world's fifth largest gas exporter, says minister
While pushing back against oil and gas CEOs, Wilkinson said he remains a “staunch supporter” of Canada’s energy sector.
He pointed to his government’s record of purchasing the Trans Mountain pipeline expansion project and approving three LNG terminals in B.C.
On Friday, the minister said Ottawa would transfer another $200 million for the construction of , a floating gas liquefaction facility being built off Kitimat, B.C.
Wilkinson said there’s an “increasingly urgent” need to accelerate the diversification of trade, and that includes speeding up projects designed to export gas.
“Right now, almost every bit of gas that Canada sends outside of the country actually goes to the United States,” he said.
In B.C., Canada's approval of gas-processing plants — including LNG Canada Phase 1, Cedar LNG and Woodfibre LNG — is designed to divert some U.S.-bound gas to places like Japan, South Korea and other Asian countries, said Wilkinson.
If LNG Canada Phase 2 has its investment decision approved next year, the four combined projects would allow Canada to export 50 per cent more gas than it currently sends to the U.S, the energy minister claimed.
“I don't think many people actually understand the magnitude of the diversification that is taking place in the context of being able to shift gas exports away from the United States, if that becomes necessary,” he said. “Canada would actually itself become the fifth largest LNG exporter in the world.”
Critics question green gas claims, long-term demand
Critics of LNG have raised concerns that gas isn't as clean as some proponents suggest.
The main ingredient in gas is methane. When it leaks into the air, it acts as a greenhouse gas 80 times more powerful than carbon dioxide over the first 20 years in the atmosphere.
Research has increasingly found more methane leaks along the gas supply chain than once thought — such as during extraction, as gas runs along pipelines, or when it’s shipped overseas.
The International Energy Agency (IEA) — which commands a wide audience and has long advised countries around the world on their energy policies since its birth in the wake of the 1973 global oil crisis — first modelled paths for the world to achieve net-zero carbon emissions in 2021.
That year, it concluded companies would need to abandon future oil and gas exploration and scrap new LNG projects if the world wanted to avoid heating the world 1.5 degrees Celsius above pre-industrial levels. That’s the point where scientists say irreversible damage will be done to the Earth’s climate system.
Harrison said there also remain big questions over whether newly built oil and gas infrastructure will be competitive on a global market.
The latest World Economic Outlook from the IEA anticipated that global demand for oil, gas and coal would peak by 2030, and then decline.
Existing oil and gas infrastructure, found the fall 2024 report, would be enough to supply future demand if countries kept their promises to reduce carbon emissions.
“The implication is that even under stated policies, we can expect a glut in production relative to demand after 2030,” said Harrison. “That raises big questions about the profitability after 2030 of new LNG terminals or new oil pipelines.”
One big element of uncertainty is how countries will react following U.S. President Trump’s attempts to gut environmental agencies and “drill, baby, drill,” as he has put it.
“Will countries respond by relaxing their regulations in response to the Trump administration?” questioned Harrison. “That's exactly what these CEOs are asking Canada to do.”
“From the private sector's perspective, the way to make them profitable is to have government subsidize them. So they're asking for more, looking for more federal and provincial funding in this moment of crisis.”
Harrison worries that if big oil and gas projects start to fail as global demand declines, companies would look for another round of public investments to prop them up.
“They're in a strong bargaining position right now, and are presumably looking for more,” she said.
With files from the Canadian Press
