In this episode of the RBC Capital Markets Strategic Alternatives Podcast, Graeme Pearson (Co-Head of Global Research), Greg Pardy (Head of Global Energy Research) and Robert Kwan (Head of Global Power, Utilities and Infrastructure Research) explore Canada's path to becoming an energy superpower, as discussed in our recent research report Energy Insights: Awakening the Northern Giant.
Powerhouse today – superpower tomorrow?
The connection between Canada’s sovereignty and urgency to grow its energy exports has intensified under the vision of Prime Minister Carney and Minister of Energy and Natural Resources Hodgson. An ongoing state of emergency precipitated by the Trump administration’s decision to implement tactical tariffs on its northern neighbor has spurred the new federal government to shape Canada into an energy superpower.
Canada, anchored by the fourth-largest proven oil reserves globally, has grown its oil output from 2.0 million bbl/d in 2000 to 5.3 million bbl/d this year, with net oil export receipts surging from $6 billion in 2000 to $130 billion in 2024. Canada's major oil companies have contributed significantly to the economy, paying approximately $100 billion in domestic royalties and taxes over the past decade.
Enhanced oil export diversification – and carbon competitiveness in the oil sands to futureproof markets down the road – could be the next big steps in Canada’s journey.
Opportunities for policy reform
In our analysts’ view, Bill C-5 is expeditious and a critical step at a critical time, and the current political and economic climate presents a generational opportunity for Canada to reform federal energy policies, particularly through bipartisan collaboration. This could potentially include enhancing federal-provincial carbon markets, repealing the 2019 Oil Tanker Moratorium to enable new export pipelines, and supporting infrastructure investments like an East-West electricity grid.
Re-engineering Canada’s carbon markets
Canada’s carbon markets are regionally fragmented and not functioning effectively when it comes to progressing towards its GHG emissions targets, despite one of the most progressive industrial carbon tax profiles worldwide. Our analysts believe that establishing fungibility of carbon credits/offsets across the federal-provincial systems is a key first step to enhance the depth of Canada’s carbon markets.
Greg Pardy, Robert Kwan, and the RBC Capital Markets Global Energy Research Team published the research report "Energy Insights: Awakening the Northern Giant" on August 18, 2025. For more information, please contact your RBC representative.
