Canada’s natural resource minister rebuffed calls to issue sanctions on the United States over President Joe Biden‘s move to cancel the Keystone XL pipeline expansion.
“Madame Speaker, I have not yet heard a single argument that would convince me that a trade war is in the best interests of our oil and gas workers,” Seamus O’Regan said during an emergency debate in the House of Commons Monday evening.
He said the government has a “responsibility to Albertans to safeguard our relationship with the single largest customer for Canadian crude.”
His comments come after the federal government faced calls to impose sanctions on the U.S. after Biden signed an executive order just hours after taking office to revoke a permit that would have allowed the expansion to continue.
His predecessor, Donald Trump green-lit the project in 2017.
The project, which was previously approved by TC Energy, would see the 1,930-kilometre pipeline transport up to 830,000 barrels of oil a day from Alberta to Nebraska.
The project was expected to cost US$8 billion.
In Alberta, the implications of Keystone XL’s cancellation cut even deeper, as the provincial government has invested about $1.5 billion into several phases of its development.
Alberta Premier Jason Kenney called the move a “gut punch” and implored Trudeau and the federal government to discuss the matter further with the Biden administration.
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“If, however, the U.S. government refuses to open the door to a constructive and respectful dialogue about these issues, then it is clear that the government of Canada must impose meaningful trade and economic sanctions in response to defend our country’s vital economic interests,” Kenney said at a press conference last week.
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However, O’Regan said they “will not jeopardize the more than $100 billion in energy products that we export to the United States every year.”
“There is a difference between illegal tariffs on existing products and the cancellation of a permit for a project that is not yet operational,” he said.
“We got this relationship right with an unpredictable presidential administration for the past four years,” he continued. “We will get it right with the predictable one for the next four years to the benefit of workers in Alberta, Saskatchewan and right across Canada.”
Biden’s decision to revoke the permit is in line with one of his main campaign promises to transition the U.S. from fossil fuels and towards clean energy.
The executive order published on the White House website on Wednesday said “following an exhaustive review,” the State Department and Biden “determined that approving the proposed Keystone XL pipeline would not serve the U.S. national interest.”
The federal government had long anticipated the project would be cancelled once the Democrat assumed office.
Speaking during Question Period earlier on Monday, Conservative Leader Erin O’Toole criticized Prime Minister Justin Trudeau’s handling of the pipeline negotiations, saying he “bet the jobs of thousands of Canadians on a single phone call to the President.”
Trudeau hit back, saying that was “simply not the case.”
He said he has been advocating for Canada’s oil and gas workers for several years.
“Over the last five years we’ve demonstrated that investing in oil and gas and fighting climate change can go together,” he said.
Trudeau said his government “will stay focused on sticking up for Canadians every step of the way.”
On Friday, Trudeau and Biden spoke on the phone. A summary of that call says the prime minister raised Canada’s “disappointment with the United States’ decision on the Keystone XL pipeline.”
“The Prime Minister underscored the important economic and energy security benefits of our bilateral energy relationship as well as his support for energy workers,” a readout of the call released by the Prime Minister’s office said.
The White House did not add anything further to the discussion, but the president acknowledged Trudeau’s “disappointment” over his decision.
— With files from Global News’ David Lao
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