Canada’s energy minister can remember the precise moment when he realized the United States had changed and that the shift would have far-reaching consequences for its closest trading partner and ally.
Last February, before he had been elected and sworn into Prime Minister Mark Carney’s cabinet, Tim Hodgson watched on television as U.S. President Donald Trump publicly berated Ukraine’s Volodymyr Zelenskyy in the Oval Office. Later, he would tell provincial premiers and colleagues, “Our job is to make sure that never happens to us.”
In the months since, the Mark Carney government has quickly moved to execute its plans to bolster Canada’s economic competitiveness and sovereignty, rolling out controversial legislation aimed at fast-tracking approvals for major projects deemed to be in the national interest.
A newly created Major Projects Office (MPO) is spooling up in Calgary under the leadership of former Trans Mountain Corp. chair Dawn Farrell, with a mandate to speed up regulatory approvals for infrastructure, energy and mining investments. The push has sparked concern among some Indigenous and environmental groups, while public-sector unions are fuming over reports the MPO is poaching private-sector talent, even as Ottawa moves to slash civil service jobs.
The moves signal a pivot on priorities for the federal Liberals under Carney, a “down-ranking of non-economic concerns and the moving up the priority list of economic outcomes,” University of Calgary economist Trevor Tombe said.
“Mining, oil and gas are exactly the right kinds of sectors to boost, not just because they’re high value, but because they’ve been kept smaller than they otherwise would be if it were just up to market.”
At the centre of the government’s efforts is Hodgson, a former Goldman Sachs Group Inc. banker who played a key role in negotiating Ottawa’s new memorandum of understanding (MOU) with Alberta, a landmark agreement laying out plans to work together on big-ticket energy projects, including a potential new oil pipeline to the West Coast and a multi-billion-dollar carbon capture and storage project.
Here, Hodgson talks about how the U.S. is “abdicating its leadership,” European leaders’ unease with Washington’s energy pressure and the opportunity for Canada if we play our cards right heading into 2026.
Financial Post: Your government’s MOU with Alberta has been described as a “formal reset” after more than a decade of friction over the province’s oil and gas industry. What made it possible for that deal to come together now?
Tim Hogson: The United States’ fundamental change in how it engages with the world has caused many challenges for many countries around the world. It’s caused particular challenges for Canada, given how tightly our economies are intertwined. But it’s also given us a gift. It’s (reminded us) what a great country we have and that it’s a country worth fighting for.
It’s that spirit that I saw when I went to the first First Ministers’ meeting in Saskatoon (last June) in my first real experience in federal-provincial politics in my new life as a politician. Sitting in that meeting with the prime minister and Premier Danielle Smith, I could just tell they have the same goal: the goal is to build Canada strong. They may have started at it from different starting points, but they had the same end goal, and they said, “We’re going to find a way to make this work.” It’s really that there’s a different atmosphere in this country today.
FP: Do you think that change in atmosphere is durable or does it risk falling apart before these major projects actually get built?
TH: I believe it is becoming clearer and clearer that we need to pull together as a country. Since that First Ministers’ meeting, we’ve seen waves of additional unjustified and unfair tariffs deliberately designed to undermine our economy. We’ve seen it levelled against steel workers, against aluminum workers, against auto workers, against farmers on the prairies, against fishermen on the coast, we’ve seen unprecedented attacks on our lumber industry. And if Canadians see that picture, they understand that it’s not gotten better.
If you read the National Security Strategy the Americans put out last week, as a proud Canadian, it’s a pretty disturbing document. And if Canadians are watching what’s happening, they understand what the prime minister says is: we can’t control what other countries are doing in the world, but we can be masters of our own house. We can give ourselves more than anyone can take away from us. And so we need to come together and build a stronger, more sovereign, more secure country.
FP: But familiar political battle lines are already re-emerging, particularly over Alberta’s proposed pipeline through B.C.
TH: I see premiers doing what they feel is their responsibility, which is to represent the interests of their provincial constituents. But I can tell you, in all of the conversations I’ve had with premiers, there’s a very clear understanding of what is going on. They all support the prime minister’s efforts to ensure Canada maintains access to the largest market in the world, the U.S. But we would be crazy not to actively seek to diversify our markets and give ourselves more cards to play. Every premier understands that.
We need to make sure we have good cards, and some of our very best cards are energy and natural resources. We look at our allies around the world who are terrified by their lack of energy security or their exposure to being blackmailed because their supply chains are dependent on other countries for their critical minerals, and those countries are using those critical minerals for geopolitical coercion. We have this incredible opportunity to put good cards in our hands.
FP: We’ve seen business and political leaders argue that energy is Canada’s most important source of economic leverage. Do you agree, and what do you mean by having “good cards”?
TH: An anecdote I’ll tell you is when I was in Germany (last August), speaking with a leader in private, (they) said, “We were beholden to Russia for our energy and that was a huge mistake. We are now being asked by another leader to buy all of our energy from him, and we have no interest in doing that. We are not interested in being beholden to one energy supplier. We view Canada as a reliable supplier. We view Canada as a like-minded country. We view Canada as a responsible producer of energy. We want to buy from you.”
Energy security is not abstract for the Germans right now; it is a very real issue for them.
FP: Oilsands producers have said they need government support to build the $16.5-billion carbon capture and storage project proposed by the consortium of companies known as the Pathways Alliance. What would make that project viable?
TH: For Pathways to be built, we need clarity on the trajectory of the price of carbon between now and 2050. A big part of the discussions around the MOU was what carbon price would make Pathways a viable project. There is clear agreement that at the $130 effective price, Pathways is an economic endeavour. And it unlocks, through showing the world that Canada is the most responsible producer of its oil of any country in the world, increased production and creates a set of technologies that are world-class that we can export around the world. This is a huge win for Canada.
FP: Would the federal government ever go beyond tax credits and regulatory reform to see that project built?
TH: That’s still a negotiation going on between Alberta, the federal government and the Pathways consortium. It’s an ongoing discussion, but I can tell you those discussions are well advanced, and there’s a clear business model for the development of the Pathways project.
FP: Are you confident Canadian oil producers are willing to invest at that scale in carbon capture when many of their key competitors — including the U.S. and Saudi Arabia — are not?
TH: I’ve seen the math behind the benefits to producers of producing, and yes, it’s quite an economic endeavour. Part of the deal is that if Pathways gets built, the emissions cap is no longer required. That allows an increase in production; the economics of that increase in production are quite attractive to producers.
FP: When you get a minute to yourself this holiday, what will you be reading or streaming?
TH: Ray Dalio wrote a book called Principles for Dealing With the Changing World Order. An incredible book about the rise and fall of economies throughout history. His thesis was the U.S. was potentially coming to the end of its dominance. And he’s laid it out all through metrics and looking at the U.S. versus China. And I’m going to go back and read it again.
He actually wrote it before Trump came to power. And, as I look at it today, I actually think America’s gone in the wrong direction. It’s abdicating its leadership in the world. They’re making economic decisions that are going to make it easier for other countries to ascend in dominance, which is actually sad.
We were in a unipolar world, where we had a relatively benevolent believer in democracy and multilateralism. Now, we’re in a world that’s being divided up between authoritarian regimes, where countries, for the first time since the end of the Second World War, believe it’s OK to change borders through war.
I don’t think we really have digested that: the most powerful countries in the world — Russia, China, the United States — now believe it’s OK to change borders through military force. That’s a big change in the world.
Source: EnergyNow Media