Canada will host the 51st Group of Seven (G7) summit in Kananaskis, Alberta, from June 15 to 17, 2025. During last year’s meeting in Italy, G7 leaders issued a declaration stating that members would “remain committed to strengthening the rules-based multilateral trading system.” Since then, G7 countries have faced one of the most challenging geopolitical landscapes since the group’s inception in 1975, primarily due to the trade war the United States has launched on allies and adversaries alike. While a temporary pause of some of the steepest tariffs is in place, the uncertainty surrounding future tariffs means that an economic slowdown, job losses and stalled investments have become the new normal.
Canada has the opportunity to use the G7 as a platform to strengthen trade relationships and call for a renewed commitment to rules-based trade.
The G7’s presidency rotates annually from member to member, with the presiding nation setting the agenda and hosting the meeting. This year, a time of great uncertainty, Canada is taking the helm. The calendar of ministerial meetings is bare, with only two entries: the G7 Foreign Ministers’ Meeting and the G7 Finance Ministers and Central Bank Governors’ Meeting. During last year’s summit, Italy hosted 23 such meetings. This year, keeping the agenda minimal may be in Canada’s best interest, as trade tensions could usurp any other items.
One item that will weigh heavily on G7 leaders will be the (temporarily cooled) trade war between China and the United States. While the duel between the two superpowers has come to a détente, the potential for re-escalation looms fewer than 90 days away. Likewise, the potential for G7 countries to suffer collateral damage in a trade war between the world’s two largest economies is a source of stress for G7 leaders thanks to their trade dependencies on both countries (see figure 1).
Excluding Canada and Japan, China and the United States capture a fairly even share of imports to G7 countries, but the United States is a larger export market for most G7 countries. For nations around the globe, maintaining a cordial relationship with two squabbling superpowers could become challenging. For two G7 countries, however, the picture is less murky. For Canada, the United States far exceeds China’s influence on the Canadian market. For Japan, the opposite is true. However, other factors beyond trade, such as defence and critical minerals, play a role in the relationships countries have with the U.S. and China. The United States is still a clear military superpower and fellow member of NATO with most G7 countries. China is the world’s largest manufacturer and processes almost all of the world’s critical minerals, providing Chinese policymakers with control over critical supply chains.
Figure 1: G7 trade linkages with China and the U.S.: Imports and exports as a per cent of total goods trade (US$)
We need look only to Canada for an example of how difficult balancing these relationships can be. Because Canada followed the United States’ policy of imposing a 100 per cent surtax on Chinese electric vehicles in 2024, China retaliated this March by imposing a 100 per cent tariff on canola and a 25 per cent tariff on seafood and pork, among other exports. Meanwhile, Saskatchewan Premier Scott Moe is pressing Prime Minister Mark Carney to negotiate a reduction in Chinese agri-food tariffs, and Ontario Premier Doug Ford is most concerned with resolving the United States’ auto sector tariffs.
Trade diversification has been on Canada’s to-do list for decades but is now more urgent, and this year’s G7 meeting offers an opportunity to shore up new trading relationships. Canada currently has 15 free trade agreements (FTAs) in force with 51 countries (see figure 2 and figure 3). Twelve more free trade agreements are in the negotiation stage, though many of these have not seen any development over the last five years. Meanwhile, Canada is in exploratory talks with China and Turkey but there have not been developments within that same time frame. Finally, negotiations with Indonesia have been concluded. With the Carney government slating trade diversification as a top priority, there is hope that trade discussions will develop into something more concrete.
Figure 3. Free trade agreements by status and country
During this June’s G7 meeting, Canada will have the opportunity to make headway in its talks with the United Kingdom. Currently, a continuity agreement remains in place, meaning the previous FTA applies while a new agreement is negotiated, but trade negotiations have stalled over disputes on agricultural trade. While the United Kingdom was able to reach a trade agreement with the United States, tariffs of 10 per cent remain in place on some goods and will continue indefinitely. It is in both the United Kingdom’s and Canada’s interests to solidify an agreement soon. Canada could also continue pressing France and Italy to ratify the Canada-European Union trade agreement, which remains provisionally in place. There is also significant scope to continue deepening economic and military ties.
Canada’s G7 presidency is also an opportunity to champion the rules-based multilateral trading system, including institutions such as the World Trade Organization. It could also promote trade diversification as a way to strengthen and expand alliances. As Prime Minister Carney recently stated, “If the United States no longer wants to lead, Canada will.” At the G7 in June, Carney will have his first opportunity to do exactly that.
This study explores the potential impact of generative AI on the Canadian workforce over the next five years. Through two novel approaches — using ChatGPT to evaluate the generative AI automation risk of occupations and employing the recently established Occupational and Skills Information System (OaSIS) database — we analyze how generative AI might transform work activities and skill requirements across different sectors and regions of the Canadian economy.
We do this by evaluating the estimated technical ability of generative AI to handle the various skills and work activities associated with all occupations in Canada. Importantly, this does not account for the full set of considerations that might go into a firm’s decision to automate a particular job. Automation of some occupations might, for example, be constrained by the need for large capital investments, new technologies, or changes to laws and regulations. However, by focusing only on the technical feasibility of generative AI, our estimates can be used to anticipate a wider spectrum of risks and opportunities.
Our analysis reveals three significant patterns that have important implications for productivity enhancement and workforce development. First, the impact of AI varies substantially across different types of skills and work activities, with clerical and data-processing tasks showing the highest automation risk due to generative AI. Skills involving human interaction, social perception, and instruction demonstrate markedly lower vulnerability.
Second, rather than eliminating entire occupations, generative AI is more likely to transform the composition of work activities within jobs. This is indicated by our results which show that occupations representing 50 per cent of total Canadian employment exhibit a moderate automation risk from generative AI, suggesting partial rather than complete automation.
Third, significant variations exist across industries and regions, based on the type and number of occupations present. Sectors like transportation and warehousing show the highest share of at-risk occupations (56.4 per cent), while others like educational services demonstrate greater resilience (3.1 per cent). These differences are more pronounced in certain regions, like Nunavut and the Northwest Territories, where manufacturing, mining, and transportation exhibit higher shares of high-risk employment than in the rest of the country.
Automation risk also varies by region when looking at the kinds of occupations that are currently in high demand. In Ontario and Manitoba, for example, in-demand occupations have a higher average automation risk from generative AI when compared to those in Prince Edward Island and Newfoundland & Labrador.
These findings have important implications for policymakers and business leaders seeking to leverage generative AI for productivity growth. Geographic and industry variation suggests the need for targeted approaches to workforce development and AI adoption. Additionally, realizing productivity benefits from generative AI will require addressing significant implementation challenges, particularly in developing the necessary workforce skills.
While generative AI could help address Canada’s productivity challenges, capturing these gains requires a coordinated approach to infrastructure development and workforce preparation. Our results suggest that upskilling and retraining initiatives should prioritize developing complementary skills — those skills that show low automation risk but high value in an AI-augmented workplace. This includes social, managerial, and leadership skills that our analysis shows are least at risk from automation due to generative AI. The study thus contributes to an understanding of how generative AI can be deployed to boost Canadian productivity while supporting broader workforce adaptation.
Canada stands at a critical economic crossroads. From the urgent transition to net-zero emissions, to the pursuit of secure supply chains in critical minerals and energy technologies, to addressing a national productivity crisis, the opportunities for transformation are vast — but remain unevenly distributed.
Much of the country’s innovation policy infrastructure remains concentrated in major urban centres such as Toronto, Vancouver and Montreal.
However, many of the individuals with the practical experience, land-based knowledge, and incentive to drive innovation are based in rural Canada. Moreover, rural communities are on the front lines of the very challenges that Canada must urgently confront.
Consider the following: whatever the device you are using to read this, trace the flow of electricity powering it back to its source. Whether that electricity was generated from fossil fuels or clean sources, it most likely originated in a rural community.
Effective theories of change management underscore the importance of providing real and ongoing support to those most directly impacted by societal transitions. Without such support, large-scale changes are unlikely to succeed.
Rural communities are foundational to Canada’s economic capacity, yet their innovation potential remains significantly underutilized.
The Southeast Techhub (SETH), located in Southeast Saskatchewan, is demonstrating how that can change. By combining grassroots resilience with a clear alignment to forward-looking policy objectives, SETH is offering a replicable model for rural innovation that can inform a truly pan-Canadian strategy — provided that federal and provincial governments are willing to engage rural leaders on their terms.
In Southeast Saskatchewan, innovation has long been a necessity rather than a luxury. When equipment breaks down or challenges arise, there is no quick trip to a nearby store to find a replacement. The closest urban centre, Regina, is a two-hour drive away — and even it lacks many of the services and amenities typical of a major metropolitan area.
As a result, residents in this region have developed a deeply ingrained culture of self-reliance. You learn to repair what is broken; you learn to build what is missing. You find creative, workable solutions using the resources at hand.
In this context, innovation is not labelled as such. It is not a buzzword or a strategic pillar. It is understood simply as “getting it done.”
The Southeast Techhub did not emerge from a government directive. It was born of necessity by a community navigating economic transition.
When the federal government announced the phaseout of coal-fired power in Saskatchewan, the city of Estevan and the broader Southeast Saskatchewan region were confronted with an uncertain economic future. Rather than retreat in the face of this disruption, the region mobilized.
As former Mayor Roy Ludwig stated, “With environmental restraints on our coal industry, we were being forced to pivot to other areas that will create sustainable, well-paying jobs. One of these areas is tech. We must move, embrace, and accept this change in a positive posture, or we will lose opportunities and get left behind.”
Southeast Saskatchewan is home to significant figures in the global innovation ecosystem. These include Dr. Eric Grimson, former Chancellor and current Academic Chancellor at the Massachusetts Institute of Technology (MIT), and Jeff Sandquist, former Vice President at Microsoft and Twitter and now Head of Product for Developer Productivity and Generative AI at Walmart.
Despite this high-calibre talent, launching SETH required more than vision — it required funding. At the time, there were no dedicated programs to support rural innovation hubs in Canada. The turning point came when the Government of Saskatchewan introduced the provincial Coal Transition Fund, designed to assist communities directly affected by the retirement of coal power. Estevan successfully leveraged this fund as seed capital for SETH’s formation.
This was not a case of rebranding an existing economic development office. The creation of SETH represented a genuine coalition, bringing together educators, municipal leaders, city councillors, local business owners and concerned residents. Their shared objective: to build a diversified regional economy rooted in technology and innovation.
What distinguishes SETH is its bottom-up foundation. It did not arise from institutional mandates, but rather from the community itself, reflecting the values, needs and entrepreneurial spirit of the region.
Today, SETH operates with a diversified funding model that includes public support, such as multi-year contributions from SaskPower, as well as growing financial commitments from industry partners, member organizations and philanthropic donors.
The Southeast Techhub is grounded in a clear and purposeful mission:
This mission is operationalized through three core pillars:
The innovation gap between rural and urban Canada, and the need to bridge this gap as a national policy priority, has been the primary motivation behind the devising of these three pillars, and the mission itself, from inception.
At SETH’s opening ceremony in May 2022, students from St. Mary’s Elementary School participated in a pitch competition, showcasing imaginative technology solutions. One standout project came from some Grade 8 students. The young women had designed a system consisting of soil moisture sensors placed in household plant pots. These sensors were connected to Amazon Alexa, enabling the virtual assistant to verbally notify users when their plants required watering.
Despite their ingenuity, these students had no path to advance their skills. At the time, in the entire stretch of Saskatchewan south of the Trans-Canada Highway — from Alberta to the Manitoba border — there was not a single accessible institution where youth or adults could study computer science.
This highlights a glaring contradiction. In the spring of 2023, the Bank of Canada identified a national productivity crisis, underscoring the need for a more skilled workforce and increased innovation. Yet current education and innovation policy frameworks continue to overlook rural students, many of whom are eager and capable contributors to Canada’s future economy. Involving rural youth in comprehensive innovation and technology education will play a critical role in solving Canada’s productivity crisis. To put it bluntly: Canada cannot solve its productivity crisis without equitably involving rural youth in comprehensive innovation and technology education.
This is why SETH’s mission explicitly includes a commitment to technology-based education. It represents not just a regional initiative, but a broader call to action: to provide rural youth with access to the tools and opportunities they need to participate in Canada’s innovation economy.
SETH’s involvement in economic development stems from the local identity of Estevan as “the Energy City.” With deep expertise in energy production, Estevan is well positioned to play a leadership role in Canada’s energy transition.
Despite this, Canada does not currently have a dedicated national Centre for Energy Development. This raises an urgent question: how can the country successfully manage its energy transition without robust engagement from communities like those found in Southeast Saskatchewan?
Saskatchewan has limited hydroelectric capacity and little feasible potential for further development. A 2010 study by Bigland-Pritchard and Prebble identified a potential addition of approximately 125 MW of hydroelectric capacity by 2020, but most remaining sites are in remote areas and are cost-prohibitive due to infrastructure and transmission challenges.
In contrast, Southeast Saskatchewan possesses considerable renewable energy assets. It is among the sunniest regions in Canada, with solar potential approaching 1,400 kilowatt hours per installed kilowatt, according to a study in Ecological Economics. It also sits atop some of the hottest geothermal formations in the country and enjoys strong, sustained winds, making it ideal for wind power development.
In addition, the region’s geological profile is well suited for Carbon Capture and Storage (CCS) and emerging technologies such as underground CO₂ “batteries,” for storing excess electricity. Harsh environmental conditions — ranging from winter temperatures of -40°C to summer highs of +40°C — make Southeast Saskatchewan an ideal real-world test bed for applied research and product development related to energy resilience and adaptation.
If innovations can be developed and proven under these extreme conditions, they can be scaled to other parts of Canada and exported to international markets facing similar energy and climate challenges.
Despite this potential, efforts by the community — through both SETH and the Estevan Chamber of Commerce — to engage the federal government have met with limited response. It often appears that Ontario, Quebec and British Columbia receive the majority of funding, despite enjoying access to low-cost hydro power and fewer transitional risks. Rather than imposing solutions on communities like Estevan, the federal government should co-create strategies with those most affected by national energy policies. In doing so, the government could turn the “disrupted” into the “disruptors,” unlocking local solutions to national problems.
The final pillar, startup incubation, addresses another critical gap: the lack of accessible resources for rural entrepreneurs. If a rural innovator wants to commercialize an idea, develop a business plan or seek mentorship, their only option is often to travel to a distant urban centre.
This matters deeply. Rural Canadians have already demonstrated their capacity to create companies and innovations of national significance — from the founders of SkipTheDishes to world-renowned researchers in nuclear fusion and cancer therapies. How many more transformative ideas are sitting dormant in rural communities — unrealized not for lack of potential, but for lack of infrastructure and support?
Based on over two decades of leadership in successful innovation initiatives, I define innovation as “the disruption of a process to make it better.” At the heart of this definition is the concept of disruption — a term that, while often considered a buzzword, is pivotal to understanding how meaningful change occurs. When brought into relation with another commonly used but equally important term, resilience, a deeper truth about innovation emerges.
Disruption inevitably introduces instability into established systems. It creates uncertainty and discomfort, not only within the processes being altered but also among the people who operate those systems. Human beings have a natural tendency to resist such change.
As a result, individuals who lead change frequently encounter opposition and criticism. Successfully driving innovation under these conditions requires more than technical knowledge — it demands personal resilience.
This is where rural Canada stands out. As discussed earlier, rural communities are already rich in innovative practices born of necessity. But equally important — and perhaps underrecognized — is the vast reservoir of resilience embedded within rural culture.
Dr. Eric Grimson, Chancellor for Academic Advancement at the Massachusetts Institute of Technology (MIT) and a native of Estevan, Saskatchewan, captured this sentiment during a 2023 visit to Southeast Saskatchewan. He remarked:
The reason, he explained, is resilience.
This insight speaks volumes. While innovation policy discussions in Canada often focus on infrastructure, investment and intellectual property, they tend to overlook the human dimensions of innovation — particularly the importance of resilient leadership in periods of transition.
As Canada confronts complex national and global challenges, there is a compelling case for incorporating rural resilience into the very DNA of our innovation frameworks.
Why are so many rural communities resisting the energy transition? Beyond the fact that these decisions are often made in distant urban centres and then imposed on rural regions, it is also because the framing itself is flawed — typically presented as a binary: fossil fuels or clean energy.
Instead, true innovators embrace the “Genius of the AND,” the ability to pursue multiple, sometimes contradictory, objectives at once.
One example I often share is my own experience owning an electric vehicle (EV) for the past four years while living in a coal town in the heart of Saskatchewan’s oil patch. It is an illustrative example for people who subscribe to the “OR” mindset.
I like to point out to both sides of the divide that my EV is made from approximately 30 per cent oil and gas products and 70 per cent mining products. It drives on a road made of oil, and when I plug it into the grid to charge, I am employing a coal worker.
SETH recognizes this complexity. Southeast Saskatchewan is ground zero for the coexistence of legacy and emerging energy systems. It is home to the world’s only operational coal-fired power plant with a CCS facility, a major hub for oil and gas, and the site of expanding geothermal, wind and solar developments. Soon, it will also host two GE Hitachi Small Modular Nuclear Reactors (SMRs).
One project led by SETH that embodies this integration is the coal-to-graphite initiative, known as Prairie Graphite, developed in partnership with George Washington University. This initiative is reimagining lignite coal as a feedstock for battery-grade graphite — positioning Estevan to become one of only two graphite producers in North America.
This innovation is not just economic — it is strategic. In 2024, China produced approximately 78 per cent of the world’s natural graphite, according to the U.S. Geological Survey (USGS), and over 90 per cent of spherical graphite — the form required for lithium-ion batteries. This gives China considerable control over global battery supply chains. The Prairie Graphite project disrupts this dependency and contributes to Canada’s national and energy security.
But the “OR” mindset argues that coal has no future in a clean energy economy. By embracing the “AND,” SETH is helping to turn a perceived liability into a national asset.
Another initiative demonstrating this principle is SETH’s Certified Clean Hydrogen Power Project, developed in partnership with a local First Nation and Hydrogen Principia. This project leverages existing CCS infrastructure to generate low-emission hydrogen.
It utilizes proven gasification processes that produce two liquid streams, hydrogen and CO₂. Because the CO₂ is already in liquid form, there is no need for post-combustion carbon capture; the CO₂ can be directly transported to Whitecap Resources for permanent geological storage.
As a result, the hydrogen produced meets or exceeds the clean fuel standards set by both the U.S. GREET model and Canada’s Carbon Intensity Score for clean hydrogen.
Importantly, because the technology is well established and commercially available, the project’s Levelized Cost of Electricity (LCOE) at Front-End Loading 2 is estimated at 8 to 10 cents per kilowatt hour.
SETH is now pursuing additional partnerships to convert this clean hydrogen into electricity on-site, using existing fuel cell technologies. Once again, this initiative shows how the “AND” approach can generate clean, dispatchable power in a region without access to hydropower.
In April 2025, the Southeast Techhub hosted the inaugural Critical Resources, Innovation, and Technology (CRIT) Conference in Estevan. The event focused on Canada’s future in critical minerals and featured speakers from Arizona Lithium, the Saskatchewan Research Council, and applied researchers exploring coal fly ash extraction and rare earth elements.
One of the conference highlights was a presentation by Zach Maurer of Arizona Lithium. His team is applying oil and gas drilling technologies to access lithium-rich subsurface brines. They are already producing small quantities of lithium carbonate and are nearing the stage where they could provide Canada with a new domestic source of lithium — an essential input for battery manufacturing and energy storage systems.
Following the conference, CRIT initiated Saskatchewan’s first battery cluster session, held on April 30, led by the Battery Metals Association of Canada. The session convened representatives from the federal and provincial government, industry and non-governmental organizations to assess current assets and identify the critical gaps that need to be addressed to strengthen Saskatchewan’s battery supply chain ecosystem.
In this way, CRIT was more than just a conference; it served as a demonstration that small centres can lead national conversations. With more than 150 attendees from across the country, the event underscored Southeast Saskatchewan’s potential not only as a resource extraction region, but as a future hub for value-added processing and technology-driven innovation.
Each June, rural schools celebrate the achievements of the students graduating and heading off to pursue post-secondary education in technology — almost always in urban centres. According to Statistics Canada, more than 60 per cent of rural youth leave their home communities to access technology-focused education. The underlying message is clear: “Your future is not here.”
SETH is working to change that narrative.
Through its partnership with Southeast College, SETH co-developed the Computer Science Training Through Projects initiative. This program enables students to apply their skills by developing real-world solutions for local industries. A prime example is the AI-powered conference app, designed and built by students, that was successfully deployed during SETH’s ICED Rural Conference in the fall of 2024.
In 2025, SETH formally launched R.I.S.E., establishing a dedicated support structure for rural tech startups that includes infrastructure, mentorship and access to funding.
The 2023 rural pitch competition awarded $22,250 in startup funding to two Grade 12 students who designed an automated irrigation system, a practical solution rooted in agricultural innovation. Notably, the program already has three years of secured funding, ensuring sustained support for the next generation of rural innovators.
Innovation is not solely a technical endeavour, it is also psychological. For innovation to be adopted and sustained, people must trust it. SETH actively builds that trust by engaging the public in accessible, community-driven initiatives, including:
These are not superficial initiatives or marketing gimmicks. Rather, they serve as meaningful platforms for education, empowerment, and informed dialogue. By making technology visible, hands-on, and locally relevant, SETH fosters both literacy and confidence in innovation, key prerequisites for long-term community adoption and support.
In April, the University of Regina, Southeast College and SETH signed a memorandum of understanding (MOU) to create the Innovation Centre for Energy Development (ICED). The MOU outlines a five-year commitment to collaborate on opportunities in energy generation and storage, the SMR supply chain, battery supply chains and advanced manufacturing. The partnership will also focus on attracting investment, supporting startups and building a workforce equipped with hands-on, industry-relevant skills.
ICED can be seen as Canada’s National Energy Innovation Centre, amalgamating all the above-mentioned forms of energy generation and storage. But ICED needs policy that provides the resources to make it happen.
Despite its demonstrated success, SETH continues to face significant structural challenges:
SETH has established collaborative relationships with key federal partners, including PrairiesCan, Natural Resources Canada (NRCan), the National Research Council, and Investment Canada. However, meaningful progress will require more than co-operation — it demands stronger alignment, policy flexibility and recognition that a win in Southeast Saskatchewan reverberates across the entire country.
Rural innovation is not a franchise model; it cannot simply be copied and pasted. It can, however, be replicated, if tailored to local assets and realities. What is required is not a rigid blueprint, but an adaptable approach grounded in:
Regional Development Agencies and Community Futures organizations are well positioned to serve as delivery partners. SETH has demonstrated proof of concept; the imperative now is to scale it.
Federal and provincial governments can strengthen rural innovation ecosystems by:
Rural-led, shovel-ready projects are already underway across the country. What remains missing is the political and financial will to unlock their full potential.
Southeast Saskatchewan is not waiting for Ottawa. It is actively building its own future. But both federal and provincial governments have a choice: to observe from the sidelines or to become true partners in this transformation.
Rural Canada is not a peripheral actor in the innovation economy — it is central to it. These regions possess the natural resources, the cultural resilience and the community-driven motivation to lead. With the right support, rural Canada also has the roadmap.
At the head of the Douglas Channel, on British Columbia’s northwest coast, lie the ancestral lands of the Haisla people. Land, water and fishing have long been central to their way of life.
The arrival of European settlers ushered in a period of disease, oppression and discrimination from which the Haisla people are still recovering. But the Haisla have recently taken control of their destiny by dreaming bigger than others thought possible.
The area, which includes the municipality of Kitimat and the Haisla Nation’s Kitamaat Village, has attracted big industrial projects for decades because of its deepwater port that provides ready access to global markets.
The region has been a hub for industrial development since Alcan first arrived in the early 1950s to build an aluminum smelter and hydroelectric facility. More recently, LNG Canada, led by a consortium of companies, has built a $40-billion liquefied natural gas processing and export facility on the doorstep of the Haisla Nation.
The Haisla historically saw little benefit from industry, and significant harm. That changed when they negotiated a share of natural gas from the Coastal GasLink pipeline feeding the LNG Canada terminal and embarked on their own LNG project. Construction of Cedar LNG, a floating LNG processing facility that is majority owned by the Haisla Nation, is now underway and is expected to launch in late 2028, three years after LNG Canada’s project.
As Canada faces a changing trade relationship with the U.S., the prospect of reaching Asian markets is making Kitimat an increasingly appealing location. There have been suggestions of reviving the idea of oil exports from there, a prospect that the Haisla and others in the community say they would oppose.
The Haisla Nation has thrown its support behind the burgeoning LNG industry because it says it displaces coal power in Asia, helping to reduce global greenhouse-gas emissions. Others in the community and province have argued that the new projects will hinder the attainment of climate-change goals.
The success of these major projects shows that big things can get built in Canada, and in ways that provide lasting benefits to Indigenous Peoples and limit environmental harm. But the delicate balance achieved may be tested if growth expands.
And some have raised concerns about whether the renewed industrial activity will increase Kitimat’s reliance on a boom-and-bust economy.
The winding 300-kilometre Cabot Trail that loops around the rugged coastline of the northern tip of Cape Breton Island offers views of rolling green hills, steep cliffs and the vast expanse of the Atlantic Ocean. Originally know as Unama’ki by the Mi’kmaq, the island has seen significant turmoil over the years as the industries on which it once depended — steel, cod and especially coal — have declined.
The region, once synonymous with coal mining, seems to be on the cusp of another major change as the province moves toward phasing out coal-fired power plants by 2030 and generating 80 per cent of its electricity from renewable energy sources.
Coal is still used to generate about 40 per cent of the province’s electricity, including at three generating stations on Cape Breton Island.
As part of its electricity transformation, the Nova Scotia government has announced plans to boost various clean-energy developments including offshore wind. An assessment of the province’s offshore wind potential identified several areas, including one off the northeast coast of Cape Breton. The development, if it proceeds, could kickstart a whole new industry in the region, the province and the country, and support the development of other low-carbon fuels, notably green hydrogen.
Cape Breton’s First Nations communities, once excluded from major development projects, are equity partners in several clean-energy initiatives and are poised to be significant contributors to the burgeoning sector.
And, after decades of decline, the region’s population appears to be on a rebound, largely because of an influx of international students who have brought a new vibrancy to the area.
Still, there are challenges ahead. The proposed offshore wind and green hydrogen developments will require significant capital investments to get them off the ground and it’s unclear what impact the decision by U.S. President Donald Trump to suspend new offshore wind leases south of the border will have on Canada’s plans.
Despite the potential, Cape Breton remains one of Canada’s poorest regions, with a child poverty rate and an unemployment rate above the national average.
Residents acknowledge that the coming transformation will require a shift in mindset too. But most see the renewable energy potential as an opportunity rather than another blow to their way of life.
As part of the IRPP’s Community Transformations Project, we’ve thought a lot about how external shocks can disproportionately affect local workforces. Even when the shock seems manageable at the national level, it can significantly disrupt economic activity in certain communities across the country, with potentially long-lasting social and economic consequences.
Our work has largely focused on the potential for workforce disruption from global and domestic efforts to reduce greenhouse-gas emissions. Using a new methodology and interactive map, we identified communities where a large proportion of the workforce is employed in sectors or industries most likely to be affected by the global energy transition. We are also publishing a series of related community stories and policy briefs that provide recommendations to governments.
We focused on communities because the potential for workforce disruption is greatest in areas with higher concentrations of employment in certain sectors. In these communities, it is not just workers directly employed at affected companies that face disruption; it can include everyone from local suppliers to restaurants.
With the emergence of an escalating trade battle with our largest trading partner, we adapted our methodology to look at community susceptibility to workforce disruption from tariffs. U.S. tariffs could have significant impacts on workers in communities with high proportions of employment in sectors dependent on exports to the U.S.
While uncertainty looms over tariff levels and the goods to which they could apply, our dashboards allow users to identify communities with concentrations of employment in the targeted sectors. Governments can use this information to inform programs that soften the blow of tariffs and to help communities diversify their economies and reduce their exposure.
The analysis
The two dashboards below show the results of our analysis. We used census divisions as a proxy for communities. Workforce exposure to U.S. exports refers to a community’s average industry exposure, weighted for share of employment in each industry. Industry exposure is equal to the value of an industry’s U.S. exports as a share of output in 2021 for goods-exporting industries, and 0 for all other industries. Employment data is derived from the 2021 census (table 98-10-0592-01) and industry data is derived from the supply and use tables (tables 12-10-0100-01 and 36-10-0488-01).
Why use interactive figures? Canada has 293 census divisions and most of them employ at least one worker in more than 10 goods-exporting industries. The dashboards are the easiest way to explore and convey our findings. Uncertainty over which products will be impacted and by how much also favour the use of more flexible tools.
Some caveats
Many of the caveats described in our methodology for measuring susceptibility to workforce disruption apply here too. Our industry exposure metric is based on national averages, which don’t necessarily reflect actual trade in census divisions. Some communities may have a lot of employment in highly exposed industries at the national level, but these same industries may not be as exposed at the local level.
Census data also has its limitations. Some census divisions are too large and sparse to be good proxies for communities, and employment counts for certain industries are not available in disaggregated form (like crop and animal production).
Dashboard 1: Map of workforce exposure to US exports by census division
This dashboard shows a map of Canadian provinces and territories by census divisions, coloured according to their estimated workforce exposure to US exports in 2021. Clicking on the names of provinces or territories on the right will filter the view on it (holding control will let you pick more than one). The bar chart next to them shows the share of their total workforce living in census divisions across the 6 exposure categories.
The table below lists all census divisions in the province or territory selected, ordered by workforce exposure to US exports. To learn more about a census division, click on it on the map and the table will expand to show the top 4 industries contributing to the census division’s workforce exposure score. You can view the dashboard in full screen by clicking the button in the bottom right corner, next to ‘Share’.
Dashboard 2. Breakdown of workforce exposure to U.S. exports by census division
Based on the same data set, this dashboard shows all 293 census divisions in Canada.
Each square represents a census division. Its size is determined by the metric selected. By default, it is set to show workforce exposure to U.S. exports, but users can also choose to arrange the data by the number of workers or share of the local workforce.
Users can focus on specific industries or groups of industries by clicking on their names. Industries were selected because of a combination of high exposure and large concentrations of employment across census divisions. Top industries are all goods-exporting industries for which U.S. exports compromised more than 40 per cent of output in 2021
Click on a census division (square) to learn more. Search for a census division in the map by using the search bar on the bottom right. You can view the dashboard in full screen by clicking the button in the bottom right corner, next to ‘Share’.
Box 1. Finding your community
All census divisions are identified by a four-digit number referred to as a “census division unique identifier,” or CDUID. To find the CDUID of the census division you reside in, you can use the following form. For more information, consult Statistics Canada’s GeoSearch tool.
U.S. President Donald Trump may have thought tariffs would push Canada toward greater integration with the U.S., but they have done the opposite. Canadians are avoiding American products, cancelling vacations and even selling their properties down south.
Some still hold out hope for negotiations with the Trump administration despite the continually changing goal posts, broken promises and threats to Canada’s sovereignty.
Others are convinced that Canada can win concessions by fighting back with counter-tariffs and other punitive measures despite the challenge of meaningfully affecting an economy more than 10 times the size of ours.
Canada may not be able to control what the U.S. does, but we can start to do the work needed to reduce the economic leverage the U.S. has over us. While buying Canadian can help, our internal market is not big enough to support our economy. Diversifying the countries we export to and the products we export will be critical.
This will not be easy. It will be particularly challenging for the people in the communities most affected by tariffs.
Governments can help these communities weather the short-term impacts while working to reorient local economies and, at the same time, build national resilience.
Canadians feel betrayed by a country that, for many of us, includes family members, friends and colleagues. Canada has signed multiple free trade agreements with the U.S. in good faith, allowing private companies on both sides of the border to pursue mutually beneficial transactions. The current situation also feels different from previous trade disputes, since President Trump is openly undermining our sovereignty.
Most Canadians do not want to be American and will do whatever it takes to defend our sovereignty.
Reducing the economic leverage the U.S. has over us will be critical. We have put most of our eggs in one basket with U.S. free trade, expecting our long-time ally to hold up its end of the bargain.
Since we can no longer count on the U.S., we need to find more eggs and more baskets. Even if the U.S. dropped its tariff threats tomorrow, our eyes will have been opened to the risks. Preserving Canada’s sovereignty means working with the private sector to reduce our dependence on the U.S.
But export diversification will be hard — like fighting against gravity. We live next door to the biggest economy in the world, and selling to the U.S. has been easy, convenient and lucrative.
In the short term, Canada’s economy could become smaller, and Canadians could have a lower standard of living. But in the medium to long term, changing both what we produce and who we produce it for could result in a stronger and more resilient economy – and country.
Canada sold $547 billion worth of goods to the U.S. in 2024 (see figure 1). That same year, we sold $173 billion to other countries. That means that 76 per cent of Canada’s goods exports went to the U.S. Rebalancing that equation so that the U.S.’s leverage is reduced is going to take a lot of work.
Figure 1. The baskets: 76 per cent of Canada’s goods exports went to the U.S. in 2024
Oil and gas, vehicles and auto parts make up our top exports to the U.S. (see figure 2). These exports account for a major share of Canada’s GDP and employment. In 2022, 74 per cent of oil and gas produced, and 54 per cent of transportation equipment manufactured in Canada went to the U.S.
Canada has already taken a major step toward exporting our oil and gas to other markets with the opening in 2024 of the expanded Trans Mountain oil pipeline, or TMX, that runs from Alberta to the West Coast and the Coastal GasLink pipeline that runs from northeast B.C. to the LNG Canada facility in Kitimat, which is set to begin shipping in 2025. However, the maximum capacity of TMX is only around 18 per cent of November 2024 Canadian crude oil production, with the potential to reach 23 per cent if changes are made, such as adding pump stations. There is also the possibility of building a northern leg of the TMX pipeline to ship oil to Kitimat, though there would likely still be fierce opposition to oil tankers in the Douglas Channel. The LNG Canada facility will have the capacity to process around 11 per cent of Canada’s natural gas production, and several other LNG facilities are planned that could dramatically increase Canada’s ability to export to non-U.S. markets.
Shifting auto manufacturing to non-U.S. markets is more challenging given the close integration of the Canadian and U.S. sectors. However, auto parts suppliers, such as Magna International, Linamar and Martinrea International, could potentially grow exports to other markets.
Figure 2. The eggs: Top 15 products Canada exported to the U.S. in 2024 and the corresponding imports of those products from the U.S. into Canada (CAD billions)
Selling Canada’s dominant sources of exports to other countries will not be enough to improve our resilience, as the oil, natural gas and auto sectors are also susceptible to global market disruption. For example, Canada could build multiple oil pipelines to its East and West Coasts only to face a decline in global oil demand as China, Europe and other countries move to electric transportation and clean energy. Electric vehicle battery technologies are also evolving, which could bring disruption to manufacturing plants focused on lithium-ion battery manufacturing. Resilience requires both diversifying whom Canada sells to and what it sells.
In looking at options for whom we sell to, a 2021 analysis by Export Development Canada provides some helpful insights. It identified substantial possible export opportunities for Canada, assuming that policy risks, free trade agreements and cultural proximity remain unchanged (which is obviously no longer the case). The total non-U.S. opportunities that Export Development Canada identified would add up to less than one-third of the value of current Canadian exports to the U.S. (see figure 3). Still, capturing those opportunities could double Canada’s exports to non-U.S. markets. But there are geopolitical considerations in non-U.S. markets as well, with China and India representing some of the largest opportunities.
There could be greater potential if Canada also diversifies and expands the goods we produce. Markets that have more growth certainty over the course of the century could be good bets. These include critical minerals, battery materials, agriculture and agri-food, uranium and potash.
Figure 3. Canadian export opportunities in 2030 for goods and services (USD billions)
Another good bet is that global defence spending will grow, including in Canada. Canadian companies could capture some of these opportunities, which often lead to civilian applications.
Technology is an additional area where there is room to better capture global market opportunities, including in clean technology, biotechnology and artificial intelligence.
And we should not forget about the potential for growth in service exports, where Canada has done a better job of diversification over the past decade.
Canada is the 10th largest economy in the world but ranks 37th in terms of population. We will not be able to maintain our standard of living without a significant focus on exports. That means that it is in our interest to champion unfettered, rules-based trade around the world. Trade agreements come with an understanding: each country benefits from a reduction in trade barriers and increased access to the others’ market. When Canadians are open to buying international goods, our market is more attractive for trade agreements. We do not want that to change.
For example, Canada is on the cusp of a comprehensive trade agreement with the European Union that offers enormous economic potential. With the agreement provisionally implemented in 2017, Canada’s exports to Europe increased by 31 per cent between 2016 and 2023. Our imports from Europe increased by 56 per cent over the same period. Ten European Union countries, including France and Italy, have yet to ratify the agreement. Strong Canadian demand for their products could help seal the deal.
When a country — such as the U.S. — threatens to violate existing trade agreements, it may be possible to benefit from a “buy Canadian” sentiment to shift consumption away from U.S. imports toward Canadian alternatives. It could be particularly helpful to Canadian companies that lose business from tariffs. The most significant impact would come from governments and large businesses shifting suppliers, but individual consumers can collectively have an impact too by shifting purchases of food, alcohol and household products.
Of course, it would be much easier to buy Canadian if we were to accelerate the reduction of interprovincial trade barriers. According to a 2019 International Monetary Fund report, Canada’s internal trade barriers are equivalent to a tariff of around 21 per cent. The Canadian Free Trade Agreement, launched in 2017, established several areas to tackle, including labour mobility, procurement, regulatory reconciliation and co-operation and trade in alcoholic beverages. There have been some notable successes, such as the agreement to harmonize energy efficiency requirements for appliances, but progress in other areas, such as alcoholic beverages, has been slow.
Following the threat of U.S. tariffs, Anita Anand, the federal minister responsible for internal trade, promised to accelerate the removal of internal trade barriers and recently announced the removal of almost half of the remaining federal exceptions to the internal trade agreement.
Buying Canadian can and will help, but we should not lose sight of the strategic importance of strong trade linkages with countries around the world.
IRPP research undertaken for our Community Transformations Project shows the importance of thinking not just about affected companies and their workers but also about communities.
Communities with a high concentration of employment in one sector can see significant impacts when a major employer suffers. There could be worker layoffs, cancelled contracts for suppliers and lower spending at local restaurants and businesses. Municipal governments can also struggle if tax revenues decline substantially, and non-profit service providers might see reduced donations at the same time as they experience an increase in demand for their services. Home prices can also drop, making it more difficult for families to afford to move.
The consequences for people in these communities are not just economic. Families can also face significant financial and mental stress.
This means that any plan to reorient Canada’s trade patterns needs to build in a range of community supports that cover economic, financial and social needs.
Rather than looking at the implications of specific tariff proposals, which are still in flux, we look at community susceptibility to U.S. tariffs using a similar approach to our analysis of susceptibility to the energy transition. We select sectors with significant exports to the U.S. and identify communities (or census divisions) with more than 5 per cent of their workforce employed in those sectors (see figure 4).
For example, communities with high concentrations of employment in oil and gas production include Fort McMurray and Cold Lake in Alberta and Fort Nelson in British Columbia. Communities with high concentrations of employment in auto manufacturing include Ingersoll and Windsor in Ontario. Sault Ste. Marie, Ontario and Sept-Îles, Quebec have high concentrations of employment in steel and aluminum, respectively — sectors that could face tariffs of up to 50 per cent.
While the Trump administration has proposed a 10 per cent tariff on energy and minerals, lower than the 25 per cent he has threatened to place on manufactured goods, there is no guarantee that he will stick to that. It has become clear that any sector that depends on exports to the U.S. could be vulnerable to an unpredictable president.
Of course, impacts on these communities could be reduced if the U.S. decides to implement lower tariffs, if U.S. buyers struggle to find alternatives or if Canadian companies have ready access to alternative export markets.
The biggest impacts of the trade dispute may be felt as companies reduce investment in Canada, U.S. buyers adjust supply chains or businesses in Canada decide to relocate. Even if there is a reprieve from tariffs, the uncertainty could significantly dampen investment for some time.
Figure 4. Canadian communities with high concentrations of employment in sectors susceptible to the impacts of U.S. tariffs
If the U.S. tariffs are implemented, a certain amount of short-term harm will be unavoidable. But federal and provincial governments can help reduce the magnitude and duration through several key measures:
With the support of governments at all levels and the engagement of the private sector and communities, Canada can eventually emerge from the current turmoil with a stronger and more resilient economy that supports a high standard of living across the country for decades to come.
The following is a chapter from the 1979 IRPP-Harvard University book, The Future of North America: Canada, the United States, and Quebec Nationalism. Edited by Elliot J. Feldman and Neil Nevitte. Walter Gordon (1906-1987) was an influential Canadian accountant, businessman, philanthropist and politician who served as Minister of Finance under Lester B. Pearson.
Two central issues concern Canada today, one domestic and one foreign. The domestic issue is the “Quebec problem”; the foreign issue is economic, especially foreign ownership of Canadian companies and resources.
Let me begin with the foreign problem. The annual merchandise trade between our two countries is the highest of any two countries in the world. Adding imports and exports together, it amounted to over $50 billion last year. However, Canada’s exports to the United States (more than two-thirds of Canada’s total exports) are to a large extent made up of industrial raw materials, whereas U.S. exports to Canada (close to one-quarter of total U.S. exports) are largely in the form of manufactured goods. In other words, the United States has a considerable advantage in the labor content of exports.
When we take into account such invisible items as interest and dividend payments on U.S. investments in Canada, freight and travel charges, etc., Canada has incurred a deficit in its current account transactions with the United States in every year over a very long period. These deficits have been reduced to some extent by surpluses with some other countries and, much more importantly, by the capital that has come to Canada, largely from the United States.
The Canadian economy is extremely sluggish at the present time; Canada is, in fact, on the verge of a recession:
It is true that all the oil-importing countries, including the United States, have had balance of payments problems since the oilproducing countries (OPEC) raised their prices so dramatically in 1973, but that does not make the Canadian problem any easier. It is not much wonder that the Canadian dollar, which in 1976 was at a premium in terms of the U.S. dollar, was in July 1978 down to about 88 cents U.S.
There is no doubt that foreign capital (mostly American) helped to develop the Canadian economy much more rapidly than would otherwise have been the case. (By foreign capital, I mean a package that apart from money, included management, scientific and technological know-how, and in many cases an assurance of markets for the raw materials or goods to be produced.) The economy of the United States was developed in much the same way with the aid of foreign capital in the nineteenth century (mostly from Britain). But in those days, the capital came in the form of bonds and other fixed-term securities which the United States was able to pay back out of profits.
In Canada’s case, the capital came in the form of equity which ensured continuing control in the future to those who put up the funds (mostly enterprising American corporations). It is this continuing foreign control of the most dynamic industries that concerns Canadians, especially as these industries continue to expand. Many Canadians believe that non-residents control too much of their resources and their business enterprises. Foreign control accounts for approximately 60% of all manufacturing companies, 70% of all mining enterprises, 99% of petroleum refining, 80% of the oil and gas industry (including exploration and development), 95% of the automobile industry, 90% of the rubber industry, 80% of the chemical industry, three-quarters of electrical apparatus, and so on.
In an article in the August 1977 issue of Fortune, entitled “Why the Multinational Tide is Ebbing,” it is asserted that “some kinds of American corporations are still powerhouses abroad, but the basic attractions of overseas investment have vanished.” The article suggests that the urge for U.S. corporations to make direct investment abroad is declining.
In a reference to Canada, the article states:
Ironically, Canada, which among advanced nations is perhaps the most rabidly opposed to American investment, may have the most to lose from discouraging this investment. It can be argued that the more foreign investment a country has, the more it is likely to benefit from additional investment. The inflow of foreign capital raises the productivity of domestic labor by increasing the amount of capital per worker. Hence real wages rise. At the same time, the new foreign investment should increase domestic competition, driving down prices and thereby lowering the returns to capital. If the capitalists are mostly Americans, which is overwhelmingly the case in Canada, then additional U.S. foreign investment would logically transfer income from American business to Canadian labor and consumers-a circumstance that most Canadians should applaud.
I have three comments to make about these assertions:
The article reads like an apologia for U.S. multinational corporations. It is unconvincing to a Canadian like myself. There are many reasons why I believe excessive foreign control of the Canadian economy is not in Canada’s best interests. But here I will concentrate on only two of them.
As I have said, some 60 % of all Canadian manufacturing is controlled abroad. A typical Canadian subsidiary may be encouraged or directed by its parent corporation to import parts or materials from its parent or the latter’s associates instead of developing alternative sources of supply in Canada. Moreover, a typical Canadian subsidiary frequently is not permitted to develop export markets for its products, including markets in the United States, in competition with its parent. While this prohibition is quite understandable, it tends in both cases to reduce job opportunities in Canada and to increase the deficit in the balance of payments.
The largest manufacturers in Canada, as in the United States, are the automobile companies whose operations come under the U.S.Canada auto pact. According to a recent review of the financial statements of General Motors Corporation (worldwide) and General Motors Canada, the Canadian subsidiary assembled 8.3% of all the vehicles produced by the corporation. However, it does considerably less actual manufacturing than is done in the United States. Consequently, it accounts for only 4.2% of worldwide employment and 4.5% of worldwide payrolls. The Canadian company’s payroll represents only 12.5% of the manufactured cost of a car in Canada compared to 33.9% worldwide. It follows that while General Motors is assembling a large number of vehicles in Canada, it is not doing a satisfactory job in terms of employment opportunities.
Consider also the influence of the principal oil companies in Canada, most of them subsidiaries of large U.S. corporations. Prior to 1970, Canadians were informed that they had conventional reserves of crude oil and natural gas that would last 900 and 400 years, respectively. Then, some four years later, new estimates warned of shortages. While both sets of estimates were announced by the Canadian government authorities, inevitably they were based on data supplied by the oil companies. The earlier estimates presumably were based on optimistic expectations of the amount of oil that would prove available in the Alberta basin. They came at a time when the oil companies were urging the Canadian government to persuade the United States to accept more imports from Canada. However, the hopes about the quantities of oil available in Alberta were not substantiated by drilling results. By the time the much lower estimates were announced, and with the new information available, the objectives of the oil companies had changed. By that time, they were urging the Canadian government to approve very substantial price increases, ostensibly to provide them with additional funds with which to step up their exploration activities in Canada.
Perhaps Canadian officials were naive in accepting data supplied to them by the oil companies; they at least might have told the public of the assumptions on which the estimates were based and the uncertainties surrounding such assumptions. Such caution regarding the accuracy of the estimates was of particular importance, as in both cases the reserve estimates supported the objectives of the oil companies at the time; in the first place, to justify increased exports to the United States, and in the second, to justify substantial increases in prices in order to stimulate exploration in the light of serious shortages. This may have been only a matter of coincidence. If so, it was a remarkably favorable coincidence for the oil companies.
There are several alternatives for dealing with the foreign control problem. The one I have suggested from time to time is that members of the Canadian Parliament should express by resolution the view that the foreign owners of the larger Canadian subsidiary companies should gradually over a period of years sell out to Canadians. By “larger” I mean foreign-controlled companies with assets in excess of $250 million. At the end of 1973, there were only 32 of them, which would make the problem manageable. The seven or eight thousand other foreign-controlled Canadian companies would be left alone unless and until their total assets reached the $250 million mark.
I have suggested that the transfer of ownership should take place in stages over a period of years, beginning with companies in the oil and gas and other resource fields. An estimate of the total cost of the 32 companies in question would come to perhaps as much as $15 billion to be paid by Canadian investors (not the Canadian government) over a period of 10 years. This amount would be well within Canada’s financial capabilities.
It would be up to the owners to decide how the changes in control should be accomplished. In many cases, it would simply be a matter of selling the shares of their Canadian subsidiaries for cash through underwriters. In some cases, the Canada Development Corporation or some new federal or provincial agencies established for the purpose might buy control. In still others, it might be necessary to sell control not for cash but for some form of debentures redeemable over a period of years.
The advantages of this proposal would be that:
I should make it quite clear that the Canadian government has shown no disposition to do anything along the lines suggested. Nevertheless, the American Ambassador to Canada, Thomas Enders, has explained United States policy regarding such possible changes as follows:
The United States believes the free flow of private investment capital between countries can make a major contribution to the prosperity of each country, and should be interfered with as little as possible.
However, should a foreign country nationalize or buy into U.S. enterprise for an authentic public purpose, the United States would not oppose the transaction provided full, effective and prompt compensation is made.
Let us consider some other specific matters that are now, or could in the future become, the cause of tension between our two countries.
There are no very serious or basic differences between Canada and the United States in the fields of defense and foreign policy at the present time. The U.S. government would have liked Canada to take an active part in the war in Vietnam and no doubt would like Canada to spend more money on defense. But from a Canadian point of view, this would not make sense.
Occasionally, Canada has taken initiatives in its foreign policy, which at the time may have appeared to be contrary to the then current posture of the United States. For example, after long negotiations, Canada established diplomatic relations with the People’s Republic of China in 1971. As things turned out, this was a useful prelude to the wholly identical relations that now prevail between the United States and China. However, in this world of superpowers, there are decided limits to what a country like Canada can do. Moreover, as your closest friends and neighbors, we think it fair to say that, as a rule, Canadian and American views and objectives are much the same. I do not expect serious tensions to arise in this general field.
There is the question of a common energy policy for North America which, from time to time, your government authorities have suggested. Canada has not thought this would be desirable from its standpoint. The amount of our conventional reserves of oil and gas is limited, and, even if Canada were to increase exports to the U.S., it would have only a marginal effect on U.S. requirements. Canadians who have any knowledge of the subject will expect their government authorities to safeguard Canada’s reserves for domestic use.
A recent issue of The Canadian Forum was devoted to a discussion of a gas pipeline from Alaska to the “lower 48,” i.e., to the central United States, through Canada. All the contributors opposed the construction of the pipeline at the present time. The reasons included the fact that, as far as Canada is concerned, only a disappointing amount of natural gas has been discovered so far in the Canadian Arctic; the prospects seem to be for greater discoveries in the south, in Alberta itself, than in the Mackenzie Delta. Other reasons for not proceeding with the project now are the desirability of settling the land claims of the native peoples before, not after, the construction of a pipeline, and the supposed damage the construction would do, both to the ecology of the region and the social mores of the natives. I have not agreed with these conclusions and, in a newspaper article published in June 1977, expressed my own views in the following terms:
An early decision on the pipeline issue is both necessary and desirable because the United States desperately needs the natural gas that has been discovered in large quantities in Prudhoe Bay, Alaska. From the point of view of the Americans, the best way of transporting this gas to the markets is by a pipeline through Canada.
Only limited quantities of Canadian gas have been discovered in the Beaufort Sea area (of Canada) so far, and the potential for further discoveries in the high Arctic may be less than in Alberta itself. It follows that Canadian requirements for natural gas can be taken care of from existing and potential reserves in the south for a good many years during which time the native land claims could be settled.
But the Americans are our friends and neighbors and surely it would be unthinkable for Canada to refuse them access to their gas in Alaska even if approval for a pipeline at an early date may complicate the settlement of native Canadian land claims. While it would be quite wrong for Canada to refuse permission for a gas pipeline to be built, we would be foolish not to point out to the U.S. the disadvantages to us in proceeding immediately rather than later and to make certain conditions to giving the necessary approvals.
In the first place, it should be agreed that any Canadian gas exported to the United States from now on under existing contracts should be repaid by equal quantities of Alaskan gas, at the same prices, as soon as the pipeline is completed.
Secondly, we should point out the effect a huge inflow of capital needed to finance the line would have on Canada’s balance of payments and the exchange rate for the Canadian dollar. This would be an ideal time to offset this inflow of capital by an equivalent outflow represented by the cost of acquiring control of some of the large foreign-owned companies in this country.
And thirdly, in the light of our present unemployment problem, we should insist that priority be given to Canadians and Canadian manufacturers in connection with all phases of the pipeline construction. There is no doubt that under present conditions, the construction of a pipeline from Alaska could do much to relieve the unemployment problem.
Finally, we should insist on measures to protect and safeguard the lives and social habits of the native peoples near the areas to be traversed by the pipeline.
Recently, President Carter and Prime Minister Trudeau announced that they had agreed upon the construction of a natural gas pipeline from Alaska through Alberta along the route of the Alaskan Highway. In doing so, they did not spell out the conditions as specifically as I for one might have thought desirable. However, it is now decided the pipeline will be constructed if it is approved by Congress and the Canadian Parliament. This removes what might have caused serious tensions between our countries.
Canada will be exporting large amounts of electric power to the United States when the huge development in James Bay is completed. Canadians do not seem to object any longer to the export of water power in the form of electricity. But any suggestion that Canada should consider the export of fresh water itself, even if at present it is being wasted in rivers or glaciers emptying into the Arctic or Pacific Oceans, would have Canadians up in arms. This may not seem logical to Americans. But then the United States’ tremendous arms exports to the Middle East and, formerly, Iran may seem to others to lack a certain common sense. In other words, the human animal is not always very rational in its thoughts or actions.
I suppose there will always be issues that affect particular industries in particular sections of the country and, therefore, provoke individual Senators or Congressmen to speech, if not to action. The recent row over Canada’s decision to disallow as deductions for income tax purposes payments to U.S. television stations for advertising beamed at Canadian audiences is a case in point. Two others that come to mind are disagreements over fishing rights and the question of pollution in the Great Lakes. But such issues are not of very serious proportions.
In conclusion, I always ask my American friends to keep in mind that, by and large, Canadians are your friends, your neighbors, and your allies. We are probably the best friends you have in this dangerous and troubled world.
But please remember that Canada is a separate, sovereign nation and wants to remain that way. We do not like it when American businessmen—sometimes with the best will in the world-treat Canada as if it were just another state of the Union.
I am not exaggerating when I say that we have great admiration for the United States and for all that Americans have accomplished. We acknowledge that we rely on the United States for our defense. We have no alternative, of course, in this age of superpowers.
But this does not mean we would like to become the fifty-first state of the Union. And it does not mean that the United States would have us, even if we did.
The best solution, I submit, is for each of us, Canadians and Americans, to respect one another’s independence—to try to understand each other’s problems—but whatever happens, to remain good friends.
NOTES
1 Personal conversation between the Hon. Thomas Enders and the author.
Editor’s Note (February 13, 2025): In early 2025, Jeremy Harrison, Saskatchewan’s minister responsible for SaskPower, said the province intends to refurbish its coal-fired power stations, including Estevan’s Boundary Dam and Shand power stations, and keep them operating beyond 2030. This is despite federal government regulations that require the phaseout of coal-fired electricity without carbon-capture technology by then. He said the provincial government would make a final decision on the future of its coal-fired plants by July 1, 2025.
This isn’t the first time Estevan has found itself at a crossroads.
With a history steeped in power generation and the production of coal, oil and gas, the city of 10,900 residents in southeastern Saskatchewan has felt the vagaries that come with its close ties to natural resources — the booms and the busts.
As Canada moves toward decarbonizing its electricity grid, the federal government has enacted regulations that require the phaseout of unabated coal-fired electric power by 2030, a move that is expected to affect the city’s coal miners and people who work at the coal-fired power plants. As the deadline approaches, many in Estevan are concerned about what effect the phaseout will have on their jobs, their incomes and their way of life.
Residents are also worried about the effects other climate policies will have on their community, particularly on the agriculture and oil-producing sectors.
At the same time, several emerging clean-energy projects — including a small modular nuclear reactor, a solar farm and a geothermal power facility — are providing hope and new opportunities.
The consistent message that emerged from our interviews with community members is that Estevan — “the Energy City” — has the cohesion, resilience, skills and assets to manage the transformation and build new sources of economic growth. But they are also concerned that their lives and livelihoods are about to be upended, that they have little say over the coming changes and that they lack the agency to chart their own course.
Nearly 10 per cent of the Canadian population lives in 68 communities that are susceptible to workforce disruption as Canada and the world reduce greenhouse-gas emissions. Workforce disruption can be driven by investments in new technologies, a decline in certain industries or growth in new opportunity sectors. It may be beneficial to some communities in the long run, but support will still be needed to manage the transformation.
Susceptible communities have on average smaller populations, and are generally more remote and less economically diversified. They face a range of challenges and opportunities, with unique local assets and circumstances. Tailored, community-driven strategies are more likely to succeed than top-down, one-size-fits-all approaches.
Existing federal, provincial and territorial economic development programs provide some support, but they are not equipped to guide communities through large-scale economic and societal transformations. Many programs also lack adequate community engagement and do not have a structured approach to consider community needs in decision-making.
To reduce community susceptibility and promote lasting resilience, the Institute for Research on Public Policy recommends the following:
