DC – In opening remarks Jonathan Wilkinson, Minister of Energy and Natural Resources, at the “Canada and the U.S.: Partnering for Prosperity in Energy and Beyond” panel discussion, said:
“Thank you, Christopher [Christopher Sands, Director, Canada Institute, Wilson Center], and thank you very much for the invitation to be here and for hosting, and it’s certainly great to have Heather [Heather Reams, President, Citizens for Responsible Energy Solutions] here. We just had an opportunity to meet yesterday to talk about some of these issues.
“I’m going to maybe provide some framing and remarks for the conversation that we’re going to have after this. We have all, I’m sure, heard many times the adage that Canada and the United States are each other’s best friend, closest allies and most important economic partner. Though it may feel a bit cliché to repeat those words, the statements are undeniably true.
“And beyond friendship and our economic partnership, we are steadfast partners on the world stage — which is ever more important these days, given the increasingly aggressive behaviour of certain international actors, including China. Beijing poses an increasing threat to our collective security and to our economies, given its control of key commodities such as critical minerals and given its ability to flood our markets with cheap products that are produced with lax labour and environmental standards.
“On these fronts and many more, Canada has been and is a close partner of the United States on the world stage. We see that presently in the wildfire response in California, where Canadian water bombers and firefighters are being deployed on an urgent basis to help our friends. But Canada is indeed a separate and sovereign nation. Canada’s national game is ice hockey, we wear toques and get our coffee and donuts from Tim Hortons — which is itself named after a hockey player.
“We are a country that is proud of having two official languages — French and English. Nous sommes très fiers d’avoir les deux langues officielles – le français et l’anglais. Our political institutions are Parliamentary, and we are enormously proud of the social safety net that we have collectively built over the past century. We Canadians respect our American friends, and we certainly admire the entrepreneurial spirit that exists in this country.Having spent 20 years in the technology community, I can tell you that that is something that Canadians think about a lot in — in the context of the productivity of our various economies.
“But Canadians are Canadians — and we will remain Canadian. Any suggestion to the contrary is, in my mind, a distraction from the challenges we both face from an increasingly aggressive China and a distraction from the real work we should be doing to build on existing mutual benefits that our relationship produces: to seize the enormous additional economic and security-related opportunities that are available moving forward. Presently, the U.S. and Canada work very effectively together in a whole range of different areas.
“Certainly, one such area is the management of our shared border, which is the world’s longest non-militarized border. On the ground, Canadian and American officials work together every day to secure and efficiently manage the flow of goods and people across the border while certainly identifying and addressing potential threats. Such co-operation is essential to both countries’ prosperity and to their security.
“And while active collaboration on border matters has been going on for many, many years, we certainly recognize and certainly — as does the incoming Trump administration — that more can be done to further address issues of illegal migration, the shipment of drugs and, in the case of Canada, the movement of illegal firearms from the United States into Canada.
“While the scale of these issues at the Canada–U.S. border is orders of magnitude lower than the challenges that are faced at the southern border, there is indeed more that can be done by intensifying collaborative efforts between ours.
“Further to conversations that we have been having with the incoming Trump Administration, Canada recently announced an enhanced border plan which includes additional investments of over US$1 billion in areas like deploying additional helicopters, drones, mobile surveillance towers and officers with new canine teams to strengthen the border.
“Another area of longstanding mutually beneficial co-operation lies in continental air defense through NORAD. Our two countries have been working together under the NORAD banner for 70 years. We are committed to building on these existing ties and increasing collaboration in the defence space — and this includes a commitment on the part of Canada to achieving the two percent of GDP Nato target.
“With respect to our economic partnership, the Canada–US relationship is the envy of the world.
- There is about US$2.7 billion worth of goods and services that go across that border each day in 2023.
- Thirty-six U.S. states rely on Canada as their number-one export market.
- Canadian consumers and businesses purchase more goods from the United States than China, Japan and Germany combined.
- Nearly half of the goods the U.S. buys from Canada are raw materials that are used by American manufacturers, contributing to jobs in the United States and to North America’s overall competitiveness.
“Our economies are so integrated in terms of partnership that I would say they are effectively hardwired. This is true in many sectors. For example, the auto sector — where parts will go back and forth multiple times before you have a finished product to sell. But there is no area in which the integrated nature of our economies is clearer than in energy and key resources such as critical minerals. For example:
- Canada supplies significant quantities of low-cost hydroelectricity to several U.S. states across fixed transmission lines. Canadian electricity powers the equivalent of six million American homes, which is more than every home in the state of Ohio
- Canada and the U.S. have an integrated pipeline system that creates jobs and energy security. We supply about four million barrels a day through this network. That is primarily heavy crude, which is not produced in the United States, and U.S. firms have invested heavily in complex refineries to process low-cost Canadian heavy crude. This creates cost-related benefits for American companies and for American consumers.
- For mid-western U.S. refineries, there are no real economically viable alternatives. And for U.S. Gulf refineries, there is an alternative with respect to heavy crude. It’s Venezuela — hardly a friendly or stable partner.
- This relationship is also reciprocal: American oil flows to Canada’s east coast, where it contributes to energy security and to our economy there.
- With respect to natural gas, Canadian gas supplies parts of the U.S. where local supply simply doesn’t exist, such as the Pacific Northwest and California. And Canadian gas that is shipped to the United States enables LNG processing and export facilities in the United States.
- Canada is the largest supplier of potash, meeting the demand of the majority of American farmers for use as a fertilizer. Canadian potash limits transportation costs and enables low cost for the foods that American families put on their tables. It also enables the U.S. to avoid purchasing from less reliable and more adversarial countries, including Russia.
- Uranium for nuclear power plants is also supplied in significant quantities by Canada. In fact, Canadian uranium presently powers the equivalent of almost 20 million American homes. Once again, this enables the U.S. to reduce exposure to less reliable uranium producers such as Russia.
- And Canada supplies significant quantities of critical minerals, including germanium, zinc, nickel, copper and graphite, which are used in a range of American economic sectors — including defence-related applications. In the area of critical minerals, typically, the alternative source of supply is China.
“In the area of energy and natural resources, the U.S. needs Canada and Canada needs the USA. The economic relationship between Canada and the U.S. is indeed well balanced. If one looks at non-energy related trade, the U.S. actually has a trade surplus with Canada of over $50 billion USD.
“And, in the specific case of energy, the U.S. leverages the resource abundance that Canada possesses for energy and minerals that its economy requires. And it obtains low-cost energy and low-cost minerals, which allows the U.S. to access energy at a discount; then thousands of American workers work to refine and transform it, and eventually sell it at higher prices to the rest of the world. It is a very good deal for the United States. In 2023, the U.S. exported $122 billion worth of refined oil products and roughly equal to crude imports from Canada. Put simply, the U.S. cannot be energy-dominant without Canadian energy.
“Canada and the U.S. presently derive significant mutual benefit from the free trade that exists between our respective countries — and it is important for Canadians and for Americans that this continue.
“The discussion of U.S. tariffs being levied on Canada is thus, for me, a bit difficult to understand. The imposition of tariffs against the U.S.’s closest friend and economic partner will cause financial pain for Canadian families, no doubt. But it will also increase prices of energy and food for American consumers. In the Midwest, for example, gas prices could increase by up to 75 cents a gallon with the imposition of 25 percent tariffs. And, as a sovereign democratic nation that must protect its own national interests, the unwarranted imposition of tariffs on Canada will necessarily require a response — and it is ultimately the people of our respective countries who will pay the cost.
“Rather than going down a path that will inevitably be lose-lose, I would suggest something completely different. I would argue that we should in fact underline and recognize the enormous benefits that are created from the economic flows that already exist, and that we should build further upon current success:
- to create additional value and jobs;
- to further enhance the energy prosperity of our two nations; and
- to collectively reduce the dependence that we presently have on non-aligned international actors including China
… by developing a U.S.–Canada Energy and Minerals Alliance. This alliance could be an early priority between the incoming administration and Canada to enable us to achieve our shared vision of affordable energy bills for people, strong and secure economies, and North America as its own energy supplier and as an energy supplier to the world.
“Let me give you a just a few specific examples of how we can move, in the near term, to create further mutual benefit, benefit that will create value all across the United States and Canada:
- In the area of critical minerals which are needed for energy, for defence and aerospace applications, and are mined in Canada’s North and in several provinces:
- There is an opportunity to jointly invest in a project that will enable greater germanium supply, which can displace germanium the U.S. has been purchasing from China. And opportunities also exist with respect to gallium, another key mineral that China recently indicated it will not sell to the U.S. moving forward,
- We can also work to enhance, in the near term, scandium and titanium supply from Quebec, which are both important for defence-related applications.
- And we can jointly work on rare earths processing and the augmentation of rare earths supply, once again reducing exposure to and dependence on China, which presently controls virtually all the processing of rare earths around the world.
- With regard to uranium, there is an opportunity to work together to expand access to Canadian uranium and to jointly work to complete the nuclear fuel cycle — reducing dependence on Russia and enhancing continental security. Ontario has expertise here in the form of small modular reactor development and uranium enrichment.
- And similar opportunities exist with respect to reducing reliance on Russia for potash. Saskatchewan has the potential to help even more in terms of U.S. farmers with many projects that are already underway in Saskatchewan to ramp up production.
- We can enhance the flow of Canadian crude oil from Alberta to assist with the Trump administration’s goal of energy dominance globally by working together on projects such as enhancing the capacity of the Enbridge Mainline and others.
- And we can work to jointly resolve issues around Line 5, which would enhance energy security for several midwestern states.
“Of course, there is work ahead here, too. We in Canada, as folks in the U.S., must make permitting of major projects more efficient and build on the opportunities for Indigenous Peoples to benefit economically from such projects. There is much opportunity here that can benefit both countries. But none of this is possible if we get into a tit-for-tat exchange.
“Both countries have a strong interest in the same goals or outcomes, and there is an impetus for renewed and enhanced cooperation in an era of geopolitical uncertainty. Let our two independent and sovereign countries look to use this renewed joint effort as a basis on which to enhance co-operation and enhance mutual benefit in a range of other areas. There is indeed enormous potential if we work together to collectively strengthen onshore production and manufacturing; to concurrently ensure that access to critical energy and materials exists within our collective borders; and to ensure that we cannot be held hostage by countries and actors that do not share our values and that can be inherently unreliable.
“I started my remarks by mentioning that Canada is a hockey nation. In hockey there have been dozens of dynamic duos: Gretzky and Kurri for the Edmonton Oilers, Phil Esposito and Bobby Orr with the Boston Bruins, Sidney Crosby and Evgeni Malkin with the Pittsburgh Penguins. But on the world stage there is really only one partnership that truly stands out. And that is Canada and America.
- Our economic interties support jobs on both sides of the border.
- We fought in two world wars alongside each other.
- And we regularly respond to actively help address crises that take place in the other country — as is the case presently with the terrible wildfires in California.
“Whether it’s hockey, or perhaps football, the collective effort of a team is often what determines its success or failure on the ice or on the field. While a single, talented player certainly can make a difference, a well-coordinated team is typically unstoppable. Such is the energy and minerals relationship between Canada and the United States.
“Rather that looking to erect barriers that will impede trade flows, increase costs for citizens on both sides of the border and make both countries less secure, let us engage a conversation that is focused on seizing the enormous opportunities that presently exist to create additional shared value and to enhance collective security. Or in other words, we should form a true energy and minerals alliance. So thank you once again for the invitation to speak with you today, and I look forward to the conversation that will come.
Thank you.”