Trump's tariff threat challenges Canada's oil and gas employment surge, poised for its best year in a decade
Canada’s oil and gas well drilling sector anticipates its strongest job growth in a decade next year, but the Canadian Association of Energy Contractors (CAOEC) has raised concerns about the potential impact of US president-elect Donald Trump’s proposed tariffs.
BNN Bloomberg reports that Trump recently threatened 25 percent tariffs on all goods imported from Canada and Mexico, which CAOEC president and CEO Mark Scholz described as a serious issue for the energy industry.
Although the CAOEC has not formally calculated the financial impact, Scholz acknowledged that punitive tariffs could affect employment.
“I think what we do know is that there would be some impact on jobs,” Scholz said at an event in Calgary. He called for collaboration, stating, “Let’s set politics aside, let’s get to work because we have a serious issue at hand.”
Despite these concerns, Canada’s energy sector is experiencing significant growth. The CAOEC projects 6,604 wells will be drilled in Western Canada in 2025, a 7.3 percent increase over 2024.
This would represent the highest level of drilling activity since the 2014-15 commodity price crash, which triggered years of contraction in the sector.
Additionally, employment in the sector is forecast to grow by seven percent year-over-year in 2025, reaching 41,800 jobs.
Scholz highlighted the importance of these positions, describing them as “mortgage-paying, blue-collar jobs for Canadians that will help build strong communities.”
Driving this activity is the recent expansion of the Trans Mountain pipeline, which has increased export capacity for Canadian oil.
Natural gas drilling is also expected to rise, fuelled by the upcoming launch of LNG Canada, the country’s first major liquefied natural gas export facility.
Energy products remain Canada’s largest export to the United States.
Statistics Canada reports that 81 percent of Canada’s total crude oil production in 2023 was exported. Of this, 97 percent was destined for the US.
Initially, many experts believed oil and gas would be exempt from tariffs due to the highly integrated nature of the two countries’ energy markets.
However, Trump’s announcement of across-the-board tariffs has created uncertainty in the Canadian energy sector.
Scholz emphasised the need to communicate the broader implications of tariffs, particularly for US energy consumers.
“What’s important to communicate is there’ll be an impact on the price of energy for Americans,” he said. He urged Canada to share this information with US stakeholders to underline the mutual benefits of trade in the energy sector.
The CAOEC also called on the federal government to reconsider policies that could disadvantage Canada’s energy sector in the face of US competition under a Trump administration.
These include the proposed cap on greenhouse gas emissions, the federal impact assessment act, and anti-greenwashing legislation. Critics in the industry argue these measures create de facto production caps by imposing unattainable climate targets.
Despite past tensions between the energy sector and Ottawa, Scholz stressed the importance of a united approach to address Trump’s tariffs.
“The Prime Minister has called for a Team Canada approach on this, and we are all in,” he said. “So, we’re going to support the Prime Minister, we’re going to support the premiers ... it’s important that we get this right.”
