Current geopolitical upheaval illustrates just how essential hydrocarbons remain to global economic stability. In this context, Canada has the potential to be an energy superpower capable of supplying global markets, provided it adopts a strategic approach that enables projects to move forward across the country.
Highlights
- Hydrocarbons, namely oil and natural gas, account for 81% of the world’s energy supply. Oil alone represents 30% of global energy consumption.
- Canada is the world’s fourth-largest producer of crude oil and the fifth-largest producer of natural gas. The sector accounts for 9.4% of nominal GDP, or $285 billion in 2025.
- In 2025, LNG Canada began exporting liquefied natural gas from Kitimat to global markets, particularly in Asia.
- Ottawa and Québec have introduced or adopted several measures to support project development, including the Major Projects Office, Clean Economy Investment Tax Credits, accelerated capital cost allowances for LNG equipment for low-carbon LNG facilities, Québec’s financial assistance measures for critical and strategic minerals, and Bill 5, An Act to accelerate the granting of the authorizations required to carry out priority national-scale projects.
Analysis
The conflicts in Ukraine and the Middle East are reminders that energy security remains a top-tier issue, even for countries that have begun their transition to renewable energy.
Disruptions in the Strait of Hormuz
The global energy system continues to be pulled between rising demand, decarbonization targets, and geopolitical tensions that are reshaping trade routes. Disruptions in the Strait of Hormuz are a reminder that the energy transition will not happen through a rapid replacement of hydrocarbons, but through a lasting coexistence of oil, natural gas, clean energy, and energy efficiency solutions.
Canada’s energy positioning
With its significant reserves of oil, natural gas, hydroelectricity, and uranium, Canada has a rare strategic advantage at a time when the world is looking for reliable, secure energy supplies. To position itself as a supplier of choice, however, the country will need to accelerate the development of its export infrastructure and simplify its approval processes. The federal government has already begun this shift through the creation of the Major Projects Office, the adoption of the “One Project, One Review” approach, and the designation of projects of national interest.
Three export markets: the United States, Asia, and Europe
The United States remains Canada’s main export market, due in part to the dependence of Midwest refineries on Canadian oil. However, this concentration exposes producers to trade, political, and tariff risks. Asia is emerging as one of the most promising diversification markets, supported by the Trans Mountain expansion and the start of operations at LNG Canada. Europe, for its part, has been working to diversify its energy supplies since the invasion of Ukraine. The agreement announced between Ksi Lisims LNG and Germany’s SEFE, under which SEFE would purchase one million tonnes of LNG per year for up to 20 years beginning in the early 2030s, confirms Europe’s interest in Canadian LNG.
Clean energy broadens Canada’s advantage
Alongside hydrocarbons, Canada and Québec are accelerating their energy diversification. Hydro-Québec’s Action Plan 2035 provides for the addition of 60 TWh and up to 9,000 MW by 2035 through hydroelectricity, wind, solar, storage, and energy efficiency. Critical minerals, new electricity infrastructure, and Churchill Falls, through a memorandum of understanding between Hydro-Québec and its partners in Newfoundland and Labrador to replace the 1969 contract and support new hydroelectric developments, will also strengthen Canada’s position as a reliable energy supplier aligned with decarbonization objectives.
Implications for NATIONAL clients
To fully seize the opportunities created by the current context, Canadian businesses seeking to develop or support energy projects should consider the following measures.
Position projects in line with government priorities
Ottawa and Québec are seeking to accelerate projects related to energy security, strategic infrastructure, critical minerals, and export diversification. At the federal level, the Building Canada Act and the Major Projects Office aim to simplify approvals for certain projects of national interest. In parallel, Québec has proposed Bill 5, An Act to accelerate the granting of the authorizations required to carry out priority national-scale projects. Companies should assess from the outset whether their projects align with these priorities in order to benefit from a more favourable regulatory environment.
Leverage existing programs and tax measures
Governments are multiplying financial levers to support energy and industrial projects, including Clean Economy Investment Tax Credits, Canada Infrastructure Bank financing, the Canada Growth Fund, Export Development Canada programs and solutions, and Québec measures for critical minerals and electrification. An early analysis of available programs can improve financing options and accelerate project deployment.
Involve Indigenous and local communities from the outset
The projects that move forward most quickly are often those that demonstrate clear benefits for local and Indigenous communities early in the process. Financial participation, environmental commitments, and credible partnerships are becoming key factors in securing social acceptance and government support.
Speak with one voice
In a context where energy is central to economic and political debates, companies benefit from working with sector associations, chambers of commerce, municipalities, Indigenous partners, and supply chain stakeholders. Collective efforts generally have more impact than individual representations.
NATIONAL can help you in Québec and across Canada with project positioning, access to programs and tax measures, and preparation for engagement with governments.
