April 05, 2016

Competing with friends: Canada and the United States

When we hear “Canada vs. USA,” many of us instantly think hockey. Maybe the 2010 Olympic gold medal game in Vancouver springs to mind. Or one of the countless epic battles from the World Junior Hockey Championships.

But our two-century-old relationship has traditionally been far less adversarial in matters of state, characterized by co-operation, not competition.

We’ve stood shoulder to shoulder with our American friends on the international stage, opposing tyranny and promoting peace across the globe. We’ve fought wars together We’ve increased free trade, creating upwards of 30 million jobs in our two countries through various trade pacts. The four pillars outside the Canadian embassy in Washington DC display the words “Friends, Neighbours, Partners, Allies.”

However, when it comes to energy, the ground has begun to shift.

The United States, once our largest energy customer, is evolving into our biggest competitor.

Once almost-entirely dependent on foreign oil - a healthy portion of which came from Canadian exports - the U.S. is now the world’s largest energy producing nation. Three years ago, it produced more oil than it imported for the first time in two decades. Last December, it lifted a 40-year crude oil export ban and American crude is now being shipped to France, Germany, Israel, China, Panama, and the Netherlands.

They’ve also built the pipeline infrastructure to support this change. Since 2010, the U.S. has built roughly 19,200 kilometres of new pipelines, or almost 14 times the length of TransCanada’s 1,400-km Keystone XL project.

Meanwhile, with our American market evaporating and the ongoing gridlock in the pipeline debate, Canada’s position in the global energy market is grim. Our high production costs combined with low commodity prices and an inability to move product means our long-standing partners to the south have lapped us on competitiveness.

Their rejection of Keystone was an exclamation point. It should be a wakeup call for Canada to change how we as a confederation support an industry responsible for thousands of jobs and billions of dollars in economic activity.

First, as obvious as it may sound, we must realize we’re now competing with the United States. While low commodity prices have translated into a recent surge in Canadian exports to the U.S., we can’t expect the single-customer strategy to work in the long-term. If and when demand returns and prices rebound, American crude will be market-ready while ours may be stuck.

It’s time to get out of our backyard and start reaching the world around us. By continuing to stifle pipeline projects and handicap our energy producers, we risk ceding billions of dollars of growth to the United States and doing permanent damage to the economic prosperity that has given Canadian families the best quality of life in the world. However, in order to make the case that we keep Canada competitive Canadians have to make this an issue. More than 35,000 Canadians have already signed our pipeline pledge at www.supportcanadianpipelines.ca. Take one minute and join them right now.