Canada's Energy Industry Caught in Crossfire of US Trade Dispute

Canada's trade dispute with the United States has sparked an unusual alliance between federal NDP Leader Avi Lewis and former Alberta Conservative Premier Jason Kenney. Both are advocating for export taxes on oil and gas as a way to strengthen Canada's hand in negotiations.

According to Lewis, who has been calling for this policy for months, Canada's energy industry is its 'biggest piece of leverage' in the trade war. He believes that imposing an export tax would give Canada more bargaining power against the US.

Kenney, who initially opposed this idea, now thinks Ottawa should consider a prospective export tax on oil, natural gas, and potash if the US escalates the dispute further. However, Alberta workers and producers will bear the brunt of this policy, making it a contentious issue.

Experts warn that an export tax would make Canadian oil more expensive, weakening its competitiveness and inviting American retaliation. It could also undermine Canada's reputation as a reliable energy supplier and lead US refiners to seek crude from other sources, such as Venezuela.

Premier Danielle Smith has criticized the proposal, saying it would be 'a disastrous policy decision' that could lead to Washington retaliating against gasoline and diesel shipments to Central Canada. Alberta exported nearly $111 billion worth of oil to the United States in 2025.