Prime Minister Mark Carney has decided Canada will not cut off or restrict its energy supply to the United States to gain an advantage in trade negotiations with the Trump administration.

Speaking to reporters in Red Deer, Alta., on a Wednesday in 2025, Carney was direct: "I don't see the value" in putting energy, including Alberta's oil, on the table in trade negotiations. (The Globe and Mail)

Where he said it mattered. Red Deer is in the middle of Alberta's oil country. The question of whether Canada could use its oil and gas exports as a weapon in a trade fight has been debated in Ottawa and in provincial capitals. Alberta's government has worried about any federal move that would treat the province's energy industry as something to be given away, while some people in Central Canada have suggested using energy exports to push back against the U.S.

Carney said his position is about being a country others can count on. "Being a reliable supplier is important. Canadians are reliable. Canadians can be trusted," he said. He added: "One of the biggest commodities, arguably the best, is trust. People trust us, and so, when you're a supplier of a key commodity, key service, you've got to think really hard about not supplying." (The Globe and Mail)

A week earlier, Carney had said "everything is on the table" when it came to responding to Trump's tariffs. That wording left open the possibility that energy exports could be part of Canada's response. By ruling it out in Red Deer, Carney narrowed what Canada is willing to do publicly, even as the tariff threat grows.

A new round of U.S. tariffs on Canadian goods is set to start August 19, 2025. These tariffs would place a 50-per-cent tax on roughly US$20-billion worth of Canadian goods, including alcohol and electronics. Those sectors have already been hit by earlier rounds of American trade measures, and 50 per cent is a big jump from earlier tariff rates. (The Globe and Mail)

The timing is tight. There are only about three weeks between Carney's remarks and the August 19 deadline. That leaves little room for a diplomatic fix. Carney's decision to take energy off the table removes one of Canada's strongest cards, because U.S. refineries in the Midwest and along the Gulf Coast are built to process Canadian oil and would struggle without it.

Think of it like a store that has always kept its shelves stocked. If it suddenly stops selling to a loyal customer during a dispute, that customer may find another supplier and never come back. Carney's argument is that Canada's reputation as a dependable supplier is worth more than the short-term gain of withholding oil.

In my view, the question is whether that approach holds up if Washington keeps turning up the pressure. That is what will test the government's trade strategy in the weeks ahead.

For Alberta, Carney's stance reads as a signal that the province's energy industry will not be sacrificed to the federal trade file. The premier's office and industry groups have long argued that using energy as a weapon would hit Alberta hardest, while the political credit would go to Ottawa. Carney's remarks in Red Deer address that worry, whether or not that was the plan.

With energy now excluded, Canada's remaining tools are counter-tariffs on U.S. goods, other non-tariff measures, and whatever diplomatic and legal options exist under CUSMA — the trade agreement between Canada, the U.S. and Mexico that replaced NAFTA. These are not insignificant, but none carries the same weight as energy, given how connected the two countries' energy systems are and how hard it would be for U.S. refineries to replace Canadian oil quickly.

What we don't yet know is whether Carney's line in the sand will hold if the tariffs kick in on schedule and pressure builds to hit back harder.