Workers check solar panels installed on a lake in Tianchang, east China's Anhui province, on Jan. 12.-/AFP/Getty Images
Shawn Barber is a retired foreign service officer and ambassador. He is the former head of the task force on economic security at Public Safety Canada.
Canada’s economic security is more exposed and more vulnerable to protectionist U.S. decision-makers than at any point in modern history. That’s why the energy framework signed in Beijing may matter far more in the long term than the headline‑grabbing EV‑canola deal.
Canada and China are finding their energy interests unexpectedly converging – a direct result of the Trump administration’s threats, tariffs and coercive approach to economic policy. This is a rare moment with the potential to deliver far‑reaching economic gains, and we can’t afford to let it pass.
As Energy Minister Tim Hodgson noted after meeting with Chinese energy officials last week, they were “very clear they would like more Canadian energy products” and are seeking partners who “don’t use energy for coercion.” The new energy framework reflects a genuine alignment of interests and offers Canada a strategic opportunity to reduce its dependence on a single, increasingly unpredictable buyer.
Andrew Coyne: No, Canada is not selling out to Beijing
An expanded Canada-China energy partnership would be wholly consistent with the new geopolitical strategy Prime Minister Mark Carney so eloquently laid out in his Davos speech earlier this week. In the emerging world order where great powers have weaponized economic integration, reducing vulnerability to economic coercion is no longer optional.
Currently, approximately 93 per cent of Canada’s crude oil exports go to the U.S. Crippling tariffs on steel and aluminum, mounting pressure on the auto sector, and uncertainty surrounding the renewal of the USMCA have all underscored a simple truth: Access to the U.S. market is now precarious and subject to the whims of an increasingly erratic U.S. President.
The Trump administration’s push to revive Venezuela’s oil industry is another warning sign. If U.S. Gulf Coast refineries can source more heavy crude from Venezuela, demand for Canadian supply could fall – weakening our pricing power and exposing the risks of relying on a single buyer.
Meanwhile, U.S. sanctions have sharply reduced Venezuela’s oil exports to China, which until recently averaged 642,000 barrels a day. And now President Donald Trump has threatened to levy 25-per-cent tariffs on any country doing business with Iran. China buys nearly 90 per cent of Iran’s oil. Beijing clearly understands its vulnerability, which is why it seeks long‑term, stable supply through infrastructure investment, financing and binding offtake agreements.
Canada faces the mirror image of that problem. We need new markets and new infrastructure. China needs reliable supply. That’s where our interests align.
Tony Keller: Mark Carney calls on Canada to wake up to ‘the world as it is’
For example, potential Chinese participation in the financing of a second pipeline to our Pacific coast – paired with long‑term purchase commitments – could finally make that project viable. The same applies to additional LNG export capacity. This would reduce our dependence on the U.S. market and strengthen our economic resilience.
Importantly, this opportunity extends well beyond hydrocarbons. The potential for co-operation with China on battery technology, solar, wind and hydrogen power, EV components, grid-infrastructure carbon capture, as well as nuclear engineering technologies is enormous. This collaboration has the potential to accelerate Canada’s transition to a low‑carbon economy.
But deeper co-operation with China on energy is not without risk. China remains Canada’s premier geopolitical competitor and allowing it a larger role in our energy sector raises legitimate concerns about leverage, security and the potential for political pressure down the road. We need to be clear-eyed about the dangers. Beijing has a track record of using economic ties as strategic tools, and Canadians must be wary of creating new dependencies even as we try to escape old ones.
Campbell Clark: Carney calls for resistance in a world of ravenous powers
There is also the unavoidable question of how Washington will react. Any new and significant Chinese investment in Canadian energy infrastructure could be viewed negatively by the U.S. national security establishment. Canada cannot ignore these risks either, but as Mr. Carney has emphasized, the world has changed and we simply have no choice but to adapt to the new reality.
The United States is no longer a reliable partner. Bullying and economic intimidation are now preferred tools of U.S. economic and foreign policy. The only rational response for Canada to this new America First policy is clear: Negotiate aggressively to preserve access to the U.S. market where we can, while at the same time acting with urgency to open new export markets for Canadian goods and services and working to attract new investment and new talent to make Canada more competitive on world markets.
The EV‑canola agreement deserves applause. Now Canada must apply the same pragmatic approach to energy – where the stakes for our long-term economic security could be far higher.