While all the attention being paid in the media to the current trade negotiations between Canada and the U.S., and the ongoing Trump ultimatums proclaiming possible new tariffs on Canadian exports to the States, the real issue is that the U.S. needs access to Canadian goods and services. It’s not simply because there has been major integration in each country’s markets in numerous sectors, but also is due to the vast amounts of Canadian resources currently and in the future available to the U.S. These include those in the energy sector such as oil and gas and electricity, in the mining sector with respect to rare minerals, uranium and key minerals such as copper and iron ore, and in the vast availability of potash deposits.
One only has to look at electricity produced as a result of the massive James Bay and Churchill Falls projects completed decades ago. For the past two decades, Hydro‑Québec has been selling clean, reliable and competitively priced electricity into wholesale markets in northeastern North America. For example, Hydro-Québec has been selling electricity into New England since the 1980s. This U.S. region accounts for about half the company’s exports. In addition, Québec has a long history of supplying clean, renewable energy to the State of New York, beginning as far back as 1914. In the case of New York State, Hydro-Québec can contribute in the future to the long-term clean energy vision for New York which includes:
- 70% of the state’s electricity use to be met by renewables by 2030,
- 100% of New York City operations to be powered from renewable sources,
- retired nuclear plants replaced by other non-emitting generating facilities, and
- construction of a 1,000-MW interconnection between Québec and New York City and efforts to expand existing interconnections importing clean energy.
Just this week, an agreement was signed by Québec, Newfoundland and Labrador and the Federal Government to increase up to 14,000 megawatts of new and existing hydroelectric developments in Labrador and along the Churchill River. This mega project will represent the largest clean energy undertaking to date in North America. Once finalized later this year, the proposal would realize a long-sought goal in Newfoundland and Labrador to transmit power from Labrador — up to 985 megawatts — through Québec to markets in the U.S.
The U.S. also imports oil from the vast reserves in Alberta’s Tar Sands, representing about 30% of total American oil imports. Interestingly, the Trump administration has apparently linked the current possible looming trade agreement to the Keystone XL, a major pipeline project that would have transported oil from Canada to the Gulf Coast. There is speculation that a new project, closely mirroring Keystone XL, could return this year as a U.S. company filed an application in Montana to build a pipeline bringing in Canadian oil. Again, Canada had previously supported the proposed pipeline, only to have had the Biden administration scrap the project in 2021 due to environmental concerns. Obviously and notably, Trump wants to resurrect the project in light of the current problems with the supply of oil in the Middle East due to the war with Iran, resulting in higher gas prices for Americans.
When it comes to rare minerals, Canada’s rare earth companies span every stage of development — from Vital Metals’ operational Nechalacho mine in the Northwest Territories to early-stage ionic clay and projects across British Columbia, Québec, Saskatchewan, and Labrador. Canada ranks among the most important non-Chinese jurisdictions for “rare earth element” supply development, with federal and provincial governments actively co-funding projects through the Critical Minerals Strategy. Canada holds some of the largest known resources of rare earths globally, estimated in 2024 at over 15.2 million tonnes of rare earth oxide. Such resources would provide a stable and secure supply of critical minerals for not only U.S. industries, but also for NATO countries for use in crucial defence-related initiatives.
Given everything, it’s easy to see why Canadians were upset when Trump declared that the U.S.does not need anything from Canada. I’d like to strongly suggest that his assertion is totally wrong given all of the evidence. Without encumbering and unnecessary tariffs, Canada as a major trading partner ensures that the U.S. is that much stronger both economically and geopolitically.
FROLITICKS 