Canada is one of the world’s leading producers of oil and natural gas. The extraction of the large assets of oil sands in Alberta leads to major environmental damage and makes it difficult for Canada to meet the climate targets that the country promised to meet. The country is also rich in minerals and is a leading producer of uranium, pot ash, nickel, zinc and asbestos. There are also large deposits of copper, cadmium, aluminum, salt, gold, diamonds and cobalt. The mining sector is especially important in Alberta, but also in British Columbia, Saskatchewan, Ontario and Quebec, the Northwest Territories and Nunavut.
Canada has the world’s largest oil reserves, after Saudi Arabia and Venezuela. In 2018, the country was the world’s fourth largest crude oil producer and the fourth largest oil exporter (as much as 96 percent is exported to the United States). Large oil fields are found in western Canada, mainly in Alberta and in the seas off the Atlantic coast. Most of all the oil produced comes from the large deposits of oil sands in northern Alberta. But the extraction process is dirty and so expensive that it is only profitable when the oil prices are really high. In addition, large amounts of water and energy are required to utilize the oil sands. A number of serious environmental problems surrounding the recovery have been reported, including arsenic and mercury leaking into the rivers. In order to reduce the environmental impact, the regulations have been tightened in recent years, but monitoring of compliance with the rules is considered to have major shortcomings. According to the government’s figures, greenhouse gas emissions associated with the extraction of oil sands have decreased by 28 percent per barrel of oil.
COUNTRYAAH: Major exports by Canada with a full list of the top products exported by the country. Includes trade value in U.S. dollars and the percentage for each product category.
Natural gas is also available in Alberta, British Columbia, Saskatchewan, Nova Scotia and the Northwest Territories. Canada was the world’s fourth largest gas producer in 2018 and the world’s sixth largest exporter. From Alberta, the world’s longest natural gas pipeline, just over a thousand miles long, goes to Toronto and Montreal consumers. Almost half of the natural gas extracted is exported to the United States, but plans are also underway to start exporting gas to Asian countries. Shale gas deposits are also found in Alberta, British Columbia and Quebec.
The low world market prices of oil and natural gas in recent years have led to lower revenues despite higher volumes being exported.
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Coal is mined in British Columbia, Alberta and Saskatchewan.
Contested oil and gas pipelines
Chinese companies, such as PetroChina, as well as several other large international companies, not least American ones, have made extensive investments in the oil industry in Alberta. Protests from environmental groups, but also delays in the construction of new pipelines, have led to fewer people wanting to invest in oil sands projects in Alberta.
Also in the US, there is resistance to continued import of oil extracted from oil sands due to the damage it causes to the environment. Former US President Barack Obama urged the United States to do more to combat climate change in order for the United States to approve a 190-mile, Keystone XL pipeline for transporting oil from Alberta to the United States. The US Senate gave the go-ahead for the building in 2015, but Obama vetoed it. This was asserted in early 2017 by his successor Donald Trump, a decision openly supported by Canadian Prime Minister Justin Trudeau. But continued opposition to Keystone XL on the US side of the border has delayed the start of construction. At the same time, the United States no longer has the same need for cheap crude oil from Canada as before.
The lack of capacity in the oil pipelines led to an increasing proportion of oil being transported by rail, both in Canada and on the US side of the border. That this posed major risks was shown in 2013 when a freight train loaded with oil derailed in Québec, an accident that claimed 47 lives. In recent years, reduced exports have led to less and less oil being transported by train.
There are also plans to build a pipeline from Alberta to the Pacific coast to reach the Asian market from there. The Conservative government gave the go-ahead in 2014 for the project, which goes by the name Northern Gateway, to start, but the project was halted after the change of power in 2015. However, in the fall of 2016, the Liberal government approved two other oil pipelines: Trans Mountain Expansion, from Edmonton in Alberta to a port near Vancouver in British Columbia (see also Calendar), and Line 3, from Alberta to Wisconsin in the United States. Another controversial project is called Energy East and is a pipeline that would transport oil from Alberta to the Atlantic coast. However, it was canceled in the fall of 2017, partly for financial reasons.
In the spring of 2017, it was also uncertain whether the Trans Mountain Expansion project could continue due to opposition from the provincial government of British Columbia, parts of the indigenous peoples in the area and environmental groups (see Calendar). In the spring of 2018, the Ottawa government decided it would buy the oil pipeline from the US oil company Kinder Morgan. Following a ruling in the Federal Court of Appeals, construction was halted indefinitely, pending government to do more to consult the indigenous peoples affected, and the National Energy Agency (NEB) to investigate how increased tanker traffic would affect wildlife and the marine environment around Vancouver. NEB gave the go-ahead for the project in early 2019, but also provided a long list of requirements that the government must fulfill, as well as several recommendations.
In 2016, the government also gave the green light for a new natural gas pipeline, Pacific North West, to be built in northern British Columbia. It was to be drawn from Fort Saint John in Alberta through rainforest areas to the port of Port Edward in British Columbia. Several environmental organizations and representatives of indigenous peoples in the area criticized the decision, which they said made it difficult for the government to fulfill its climate promises (see below). There was also concern about how the project would affect fishing and other local industries. But there were also people from the indigenous peoples who welcomed the decision which they hoped would lead to economic development and new jobs in the region. According to the Canadian Environmental Assessment Agency (CEAA), the project would increase Canada’s greenhouse gas emissions by 0.75 percent.
Large forest assets
Canada has large forest resources and is also the world’s largest exporter of timber. Most of the timber is sold to China, Japan and the United States.
Energy
Energy consumption in Canada is high. Hydropower accounts for nearly 66 percent of electricity generation. Hydropower electricity is also exported to the United States. Five nuclear power plants accounted for almost 14 percent of electricity in 2019. Of a total of 19 reactors, 18 are located in Ontario and one in New Brunswick. There are also power plants that are powered by gas and coal as well as wind and other renewable energy sources.
Climate change
In 2002, Canada joined the Kyoto Agreement, which aimed at reducing industrialized greenhouse gas emissions by industrialized countries. According to this, the country undertook to reduce emissions by 6 percent by 2012 compared to the 1990 level. In 2007, emissions instead increased by over 26 percent, largely due to the oil boom in Alberta. In 2011, the then Conservative government decided that Canada should leave the agreement on the grounds that the costs were too high.
However, at the end of 2015, the Liberal government signed the climate agreement that 193 countries agreed in Paris. The Canadian government promised to reduce greenhouse gas emissions by 30 percent by 2030 compared to the 2005 level. The level had been set by the former Conservative government. Trudeau then emphasized that the promises should be seen as a “floor” and not a “ceiling” for Canada’s ambitions. The greatest responsibility for achieving the climate target was laid on the provinces, which were obliged to impose a special tax on greenhouse gas emissions. Such taxes have been introduced at the provincial level in, among others, British Columbia, Quebec and Alberta. In April 2019, however, the federal tax began to be levied in four conservatively governed provinces (see Calendar). After the parliamentary election, Trudeau promised that Canada will be climate neutral by 2050, that is, not to emit any greenhouse gases at all.
Researchers have warned that climate change means that major forest fires will become more common in the future. In connection with a major fire in Alberta in the spring of 2016, authorities were forced to evacuate 80,000 people from the oil city of Fort McMurray. In August 2018, the British Columbia government announced a state of Christianity as 560 forest fires raged in the province. At least 3,000 people had then been evacuated from their homes.
Twice as fast as in the rest of the world
In a new government report, Canada’s Changing Climate Report (CCCR), in April 2019, it was stated that climate change in Canada happens twice as fast as the world average. Since 1948, the average temperature had risen by 1.7 degrees throughout the country, but even more so in the northern parts of the country, in the prairie provinces and northern British Columbia. In northern Canada, the temperature had risen by an average of 2.3 percent. For the world at large, the corresponding figure was 0.8 percent, according to US NOAA. According to the report, the temperature rises are due to several things, but greenhouse gas emissions are one of the main factors.
FURTHER READING: learn more about Canada in the UI’s publication Foreign Affairs magazine:
Canada will be the first country to formally withdraw from the Kyoto Agreement, which aims to limit greenhouse gas emissions.
November
The Conservative Party is fined
November 10
The Conservative Party is fined for putting larger sums than allowed on its election campaigns. The party is required to pay 52,000 Canadian dollars. At the same time, the charges are laid against four high-ranking party members.
Canada tightens sanctions on Iran
November 21st
Canada, along with the United States and Britain, tightens its sanctions on Iran.
August
NDP leader Layton dies in cancer
22 August
NDP leader Jack Layton, the official opposition leader since May, dies in cancer after a period of illness.
May
The Conservative Party wins its own majority
May 2
The re-election results in the Conservative party gaining its own majority in the lower house, with almost 40 percent of the vote and 166 of the 308 seats. For the first time, the NDP will be the second largest party with 103 seats, ahead of the Liberals who will only receive 34 seats. BQ may retain only 4 of its 47 seats. Behind the NDP’s success lies largely the popular party leader Jack Layton who has led the party towards the political center. BQ leader Gilles Duceppe and Liberals leader Michael Ignatieff resign after the election, as they lose their seats in parliament. The turnout is just over 61 percent. At the end of the month, Bob Rae, former Ontario head of government, is appointed new temporary leader of the Liberal Party.
March
The government falls after a vote of no confidence
March 25th
After a budget dispute, the Harper government loses a vote of no confidence in the House of Commons and announces new elections until May.
February
The government is shaken by corruption scandals
Four Conservative MPs are charged with deliberately violating the rules on how much money one can receive for their election campaign in 2006. An investigation is being launched against a former close associate of Prime Minister Harper, who is suspected of having used his position to advance his significantly younger partner’s business project.
