Lament for a Nation
This article by Bernard (Bernie) J. Roth, KC, a leading energy regulatory lawyer at Dentons and member of the ACR Board, was originally published by Dentons in a three-part series. The article has now been consolidated for publication on the ACR’s website. The article provides some context for the ACR / Dentons’ Energy Futures Forum to be held in September 2025. This collaborative ACR / Dentons event serves as a dynamic platform for a diverse group of stakeholders, including politicians, industry leaders, associations, executives, and subject matter experts. Participants will engage in thought-provoking discussions, focusing on crucial topics such as regulatory challenges and opportunities, the future of energy, and a comprehensive cross-border energy outlook, including energy trade and corridors. The forum seeks to offer a unique opportunity to foster collaboration and drive forward-thinking conversations of the future of Canada’s resource sector. Stay tuned for the date of the Energy Futures Forum and the Agenda as it is developed.
Part 1 – Natural resource development in a post-national state
For the past decade Canada has been going through an identity crisis. We set out on a path to become globally known for our resourcefulness rather than our resources in a transition away from conventional forms of energy. This belief that Canada could or should become known for resourcefulness was accompanied by the idea that Canada had become a post-national state. A war in Europe appears to have put an end to the idea of a post-national state, bringing national identity and nationalism back into focus in almost everywhere. Canada, in particular, faces a newly elected U.S. president expressing a desire to annex it, just prior to initiating a global trade war. Canadians have responded with a wave of nationalism and have been rethinking their identity and how to preserve it. There appears to be a consensus building that Canada needs to become an energy super power, establishing trade corridors to diversify Canadian exports away from the United States.
This article explores some historical context for nationalism in Canada and the United States and the role of natural resource development in creating and preserving Canada's nationhood. The article then goes on to provide some history of oil and gas development, before addressing what it takes to be an energy super power and how that can be achieved at speeds many don’t think possible.
Historical context: on 60 years of “Lament for a Nation”
2025 marks the 60th anniversary of the publication of George Grant's essay Lament for a Nation: The Defeat of Canadian Nationalism (Lament). This book was recognized on its 50th anniversary as one of the most important Canadian books ever written. For anyone who thinks that current US presidential politics impacting global affairs and threatening Canada's independence are unprecedented, think again and read Lament. The subject matter of the book was the 1963 defeat of the Diefenbaker Conservatives by the Pearson Liberals. The election was fought on the central issue of placing American nuclear missiles in Canada, which Diefenbaker strongly opposed. The election took place in the immediate aftermath of the Cuban Missile Crisis of 1962, which most people may remember. What Canadians have likely forgotten is that there was the “Canadian Missile Crisis” that occurred at the same time.
Diefenbaker's continued nuclear resistance, combined with his disdain for America's war in Vietnam, earned him the loathing of President Kennedy, who intervened in Canada's election in support of his friend Pearson, who supported the installation of US nuclear missiles in Canada. Pearson won the 1963 election, resulting in Canada's acceptance of American nuclear missiles as part of its joint defence commitments to the United States. In the wake of the 1963 federal election, Lament declared, "Canada has ceased to be a nation, its formal political existence will not end quickly. Our social and economic blending into the empire [the United States] will continue apace, but political union will probably be delayed." Lament triggered a wave of Canadian nationalism that crested in the 1970s, and did not subside until the mid-1980s, that brought the negotiation of the original Canada-US Free Trade Agreement.
Hillbilly elegy and the threat of annexation
Americans have their own book of lament written by their current vice-president. The title of the book is Hillbilly Elegy: A Memoir of a Family and Culture in Crisis (Hillbilly Elegy). Originally published in 2016, the book is a deeply personal and emotional account of the economic, cultural and social devastation wrought by the deindustrialization of America's heartland and the fear and insecurity it brought to millions of Americans. Unlike Canada's Lament, Hillbilly Elegy is not partisan. To the extent Hillbilly Elegy reveals any partisanship, it vaguely favours the Democrats by including some passing praise for President Obama, who was just finishing up his last term in office. Just as Canada's Lament stoked nationalism in the years following its publication, Hillbilly Elegy provided the intellectual foundation for a political movement promising a return to a golden age, with the ultimate goal of making America the greatest civilization in the history of humanity. Achievement of such a goal would require massive resource wealth, which can be acquired by conquest or contract, but both of these means have proven to be unsustainable in the long run. Political union is needed to secure the resources required for such a grandiose national vision.
One might question why the Republicans would ever be interested in accepting Canada into a political union since success would likely lock in Democratic domination of America's institutions of governance for decades. The Democrats would seem to be the more logical party to invite Canada into the American union. However, this misses the point that nationalism is not a partisan issue in America. No president, regardless of orientation, would declare the United States a post-national state.
Part 2 – The National Dream
The National Dream and oil discovery
Pierre Berton's book, The National Dream, published in 1970, sustained the wave of Canadian nationalism initiated by Lament. It documents the grandiose vision for making Canada a nation by building a transcontinental railway as critical infrastructure to exploit the vast natural resources of Western Canada, much of which lay in the lands Canada purchased from the Hudson's Bay Company shortly after Confederation. These resources included lands that could be used for agriculture, various minerals, forestry and fisheries. Western Canada's oil reserves had not been discovered yet. The value of oil was known, however, as the first oil well in North America was drilled in 1858, in what would become Ontario. Like Canada's national game, the oil industry in North America originated in Canada. The realization that Western Canada had vast oil reserves came with the Leduc Oil discovery of 1947.
Global role of oil in nationalism
Before addressing the important role that oil has played in sustaining and advancing Canada's nationhood, it is worth considering the role of oil globally in the pursuit of nationalism and its importance in confronting nationalism when one nation challenges the independence of another.
USSR and Russia
The Union of Soviet Socialist Republic (USSR) collapsed after a decade of depressed oil prices in the 1980s. The Marxist values of the USSR proved unsustainable without oil revenue. The recovery of oil prices through the 1990s, peaking in 2008, put Russia back in a position that it thought it could return to its own vision of a golden age. For the last three years, Russian oil wealth has been deployed and depleted in a special operation of conquest – justified not only in order to return to a golden age, but as an act of defiance of Western democratic values. In response to this act of aggression, the West has tried to stem the tide of Russia’s oil and gas revenue. The West's ability to do so has been made possible by accessing the oil and gas production of countries such as Norway.
Norway
On the European continent, Norway's oil reserves are second only to Russia’s. Though Norway's oil reserves are only a fraction of Canada's, which are greater than the combined reserves of Norway, Russia and the United States, Norway has aggressively drilled its arctic waters, and its oil production rate, relative to its oil reserves, greatly exceeds Canada's by orders of magnitude. This aggressive approach to developing its oil and gas endowment has led to the creation of a sovereign wealth fund currently valued at $2.7 trillion. This level of wealth gives Norway the financial capacity to achieve its important national values and has placed it in a position to be able to materially assist Europe in confronting Russia's latest imperialist ambitions.
Canada's oil wealth, national decisions and free trade
To put Norway's sovereign wealth into context, Canada does not have a sovereign wealth fund. To the extent that Canada has tapped its oil and gas reserves, most of the wealth generated has been deployed in the continued realization of the National Dream, with only $25 billion (two orders of magnitude less than Norway) being set aside by Canada's largest oil producing province.
Canada has a history of turning to the development of oil and gas resources in times of crisis. The 1973 Arab Oil Embargo shook the global economy. Both Canada and the United States relied on oil imports at the time. Although western Canadian oil production was sufficient to meet demand in the West, Eastern Canada remained dependent on oil imported from the Middle East. Riding the cresting wave of Canadian nationalism that followed the publication of Lament, Canada made a very important decision to exploit its oil sands resources with the goal of achieving national energy security. At the time, there was an insufficient business case for developing the oil sands. Although operations of the Great Canadian Oil Sands Limited commenced in the late 1960s, they had not proven the commercial viability of oil sands production. Syncrude Canada Ltd. had been working on bringing a much larger project forward, but in 1975, it lost the support of a large American oil company and was not able to convince a large European oil company to replace it. With the future of Canada's oil sands hanging in the balance, the governments of Canada, Alberta and Ontario stepped in and picked up the interest that the American and European oil companies declined. For Canadians who need to validate the historic significance of this decision, they can look to the front page of the New York Times, that fully covered the story in detail within its pages.
Syncrude proved to be a success, delivering on the promise of Canadian energy independence and generating tremendous wealth. By the early 1980s, however, the federal government was again intervening in the oil and gas industry, but not in a positive way. In 1981, the federal government established the National Energy Program (NEP), which was a scheme based on having the Americans pay global prices for Canadian oil while setting lower domestic oil prices to shelter eastern Canadian oil consumers from rising global oil prices. In some respects, the NEP was consistent with the national policy behind the National Dream, which encouraged east-west trade by building a high tariff wall between Canada and the United States.
The NEP proved to be economically disastrous. It scared off both domestic and foreign capital, freezing development of the Canadian oil and gas industry. The wave of Canadian nationalism that started to build in the 1960s following the publication of Lament came spilling on to the beach. For Canada's western oil producing provinces, the National Dream had become a nightmare, raising national unity concerns. However, the NEP did not last long. A change in government in 1984 marked a period of decline in Canadian nationalism and the beginning of an era of free trade with the United States.
The decline in nationalism and the advent of free trade with the United States did not, however, diminish the importance of oil and gas in advancing Canadian interests. As I discuss in "NAFTA, Alberta Oil Sands Royalties and Change: Yes we Can?" (2009), the energy provisions of Canadian free trade agreements, which ensured American access to Canada's energy resources, were an important incentive for the Americans to reach agreement on the terms of trade.
United States oil production had peaked in 1970 and had been in steady decline, while its oil consumption rapidly increased. Unlike Canada, which invested in the oil sands following the 1973 embargo, putting it on a path to energy independence going into free trade negotiations in the mid-1980s, the United States was reaching the peak of its energy insecurity. Americans were more vulnerable than they were in 1973. The United States' desperate need for energy security gave Canada leverage in its negotiations. Without the leverage of oil and gas, Canada would have been far less likely to have secured trade agreements with the United States on advantageous terms.
The 1988 federal election was fought over the issue of the ratification of free trade that had been negotiated but had not yet come into force. The Liberals picked up Diefenbaker's cause of Canadian nationalism and campaigned on the thesis of Lament, that free trade with the United States would fulfill the prophecy of Canada's annexation by the United States. The Liberals lost and Canada went forward with free trade with the United States.
The final example of Canada's use of its oil and gas resources to advance the cause of Canadian prosperity and unity followed the 1993 federal election that brought the Liberals back to power under the leadership of Prime Minister Chrétien. The country was heavily indebted and the Canadian dollar was rapidly declining. National unity was at an all-time low, resulting in an eastern separatist party winning the role of Canada's official opposition in Parliament and a party based on western alienation winning the majority of seats in the western provinces. In 1995, a sovereignty vote had almost resulted in the breakup of the country. It was in the context of these fiscal and unity crises that the federal government joined the National Oil Sands Task Force at the invitation of the Alberta Chamber of Resources. The task force resulted in the establishment of a provincial/federal fiscal framework for oil sands development that was the catalyst for the rapid expansion of the oil sands, putting Canada on the path to becoming an energy superpower. Investment poured into the oil sands from all over the world, taking production from approximately a half-million bpd to over 4 million bpd.
Current challenges and future prospects
Now in 2025, we find ourselves going into a federal election in a fiscal situation similar to where we found ourselves in 1995. The country is heavily indebted and our dollar is trending toward record lows. We have spent the last decade pursuing a federal energy transition policy intent on phasing out oil and gas production. New capital investment in oil and gas has stalled and Canadian oil and gas companies have been returning capital to their shareholders, the majority of which reside outside of Canada. Capital flight has contributed to the devaluation of our currency, plummeting productivity and rapidly escalating federal deficits. We do not, however, have a national unity crisis threatening the continued existence of the country. Rather, we face a crisis in our free trade relationship with the United States, whose President is threatening to annex our country. We are once again a nation in crisis. In the past, we have found the will to turn to the development of our natural resources for prosperity and the preservation of our national identity. Canadians, therefore, should have the will to make Canada an energy superpower by establishing new trade corridors to move our oil and gas to markets beyond the United States.
Part 3 – Where there's a will there's a way
The way Canada can become an energy super power
The only viable path for Canada to become an energy superpower is to rapidly develop our oil resources, which are almost entirely derived from Canada's oil sands. The math is simple: Canada's proven oil reserves are many times larger than our proven natural gas reserves and oil is many times more valuable than natural gas on an energy equivalent basis. The reason is that oil is extremely energy dense, easily transported and can be exported to markets across the globe. A barrel of oil trades in a range of between $80 and $100 (CAD), while an energy equivalent amount of natural gas trades in a range of between approximately $5 and $25 (CAD). The result is that Canada's oil exports generate well-over $100 billion per year in revenue, relative to natural gas at around $20 billion and electricity at approximately $5 billion. The only export market for electricity is the United States. Canada has no realistic way to materially increase its electricity production, renewable or otherwise, to come anywhere near the value of its current oil production. Although Canada has the natural gas reserves to materially increase its natural gas production that can be converted into liquefied natural gas (LNG) for export, natural gas also generates economic value if it is used domestically to produce oil sands, petro-chemicals, fertilizer/ammonia, hydrogen or data from data centres supporting AI, all of which can be readily exported globally.
The only way for Canada to become an energy superpower is by materially increasing its oil production and by shipping the vast majority of this increased production to global markets outside the United States.
Trade routes – The direction of travel
Canada has well-established trade routes for expanding its oil and gas exports to the United States. These trade routes will continue to be highly utilized. Although the United States currently produces more oil than it uses, its refineries need heavy oil that can be most economically and sustainably provided by Canada. It would be extremely costly and time consuming for the United States to reconfigure its pipelines and refinery infrastructure to displace Canadian oil sands production. It would make no sense for the United States to do so in reliance on its own proven reserves, which are a fraction of Canada's and will be rapidly drawn down once US oil production peaks again, as it did in 1970, and goes into decline. The existing pipeline capacity to the US, including low cost increases in that capacity from debottlenecking, should be highly utilized for decades. The fact is that the United States needs Canadian oil and this need is likely to increase.
Canada recently established the physical capacity to export a limited amount of oil to global markets through a pipeline connected to the Port of Vancouver. However, this is not a viable trade route for diversification of Canada's oil market beyond the United States. The Port of Vancouver can only accommodate small oil tankers that are best suited to shuttling oil to California. The economics of global oil trade requires oil tankers that handle approximately four times more oil than those capable of accessing the Port of Vancouver. Further, the pipeline serving the Port of Vancouver has very limited expansion capacity that could not support any material market diversification.
There was an attempt to use an existing energy corridor established to take western Canadian gas to eastern Canadian markets, by converting an underutilized natural gas pipeline to oil service. This window of opportunity has closed because this capacity has refilled and is again needed to serve eastern Canadian natural gas markets. Further, it makes little sense to try to build new pipelines to access global markets off Canada's east coast. It is five times the distance to get to Canada's east coast from western Canada. Although an energy corridor to the Port of Churchill on the Hudson's Bay would reduce the pipeline distance to access these markets, the current and future need for oil and natural gas is predominately in the Pacific Basin, which is one of the reasons that the Panama Canal is in such high demand. Oil and LNG from the Atlantic Basin, much of which is American being shipped from the Gulf Coast through the Panama Canal, is accessing global markets that primarily exist in the Pacific Basin. Following energy corridors to Canada's Pacific northwest coast minimizes cost and maximizes the financial benefit of exporting oil and gas. A north western oil and gas trade route gives Canada a significant competitive advantage over the United States. The direction of travel for an energy corridor for oil and gas exports is west by northwest, not east.
Establishing energy corridors and infrastructure: The speed of travel
In a recent article entitled Unlocking Canada's mining potential, my colleagues David Hunter, Mary Su and I canvassed the changes that are required to bring capital investment back to Canada's resource industry. The focus of the article was upstream regulation. It did not address the equally important issue of transporting the resources we produce to export markets, which necessarily involves the federal government because of its responsibility for inter-provincial and international works and undertakings.
There are examples of major Canadian pipelines getting approved and constructed at speeds many did not think possible. They involved cooperation with the United States in response to emergencies caused by global events. The first, and most extreme example, is the Canol Project that was conceived in the weeks after an attack on Pearl Harbor, which destroyed much of the American Pacific naval fleet. The United States Army decided that it needed to secure fuel supplies for the defence of the west coast of North America by delivering fuel to Alaska through Canada. The Canol Project was grandiose, rivalling the engineering challenge and cost of building the Panama Canal. The plan was to expand production from Imperial's Norman Wells oilfield; construct a 1,000 km pipeline from Norman Wells, Northwest Territories over the Mackenzie Mountain Range to Whitehorse in Yukon; build an oil refinery at Whitehorse; and then build 1,600 km of refined product pipelines to Alaska. The entire project, from conception to completion, took approximately two years. Neither Canadians nor Americans will likely know about the Canol Project. It only operated for a little over a year. For the Canadian government, it marked a low point of Canadian sovereignty. The US Army commenced construction of the pipeline in Canada before getting Canadian approval. For the American government, the project went five times over budget and before being completed, the Japanese were all but defeated, so the Canol Project ended up never being needed. The Canol Project provides an example of not only how quickly pipelines can be built, but also how vulnerable Canadian sovereignty can be when Americans are responding to a crisis of their own.
The more recent example of expeditious pipeline approval can be found in Canada's 1978 Northern Pipeline Act that implemented the 1977 Canada-United States Agreement on Principles Applicable to a Northern Natural Gas Pipeline (Northern Pipeline Treaty). The context for the legislation was the 1973 Arab Oil Embargo. The United States wanted to connect natural gas reserves in Alaska to its lower 48 states. Pursuant to the Northern Pipeline Treaty, Canada and the United States passed legislation to provide for the expeditious construction of the Alaska Gas Highway Pipeline. The Northern Pipeline Act included a deemed Certificate of Public Convenience and Necessity (CPCN) following a preferred route that had been selected by the National Energy Board (NEB). The Act created the Northern Pipeline Agency to oversee a one-window approach for all federal approvals to ensure expeditious construction of the pipeline. By 1982, an 800 km pipeline, known as the “pre-build,” constituting approximately half the pipeline approved by the CPCN, was completed and in operation. The NEB established the corridor for the pipeline, which Parliament declared to be in the national interest by way of the deemed CPCN. The Northern Pipeline Agency then conducted consultation, environmental and socio-economic work as part of a detailed routing process that allowed for CPCN conditions to be amended to address issues and concerns as the project proceeded.
The Northern Pipeline Act is an example of how essential infrastructure found to be in the national interest can be constructed using an identified corridor. The University of Calgary School of Public Policy has been discussing a similar approach for the last decade. A recent article from the Macdonald-Laurier Institute proposed the enactment of a federal Trans-Canada Corridor Act (TCCA). Essentially, the proposal would take a Northern Pipeline Act approach that would be applied to establish energy corridors across the country to facilitate the construction of linear infrastructure critical to inter-provincial and international trade at speeds we currently don't think possible, but which have been achieved in the past.
There are a number of existing corridors that are well established that could be deemed on the enactment of TCCA legislation. Most of the existing corridors go to the South to connect Canada to markets in the United States. However, there is one corridor that runs from Edmonton to Canada's Northwest Coast on the Pacific Ocean. Hundreds of millions of dollars were spent over a decade validating the feasibility of this corridor for an oil pipeline project. Ultimately, the federal government denied the project based on a marine shipping policy that resulted in an oil tanker ban, but no issue was ever taken with the feasibility of the corridor. In fact, this corridor has been followed by natural gas pipelines serving two LNG projects that have been approved and are under construction. Also, this is the same corridor that is being proposed for the North Coast Transmission Line that would electrify LNG-related energy infrastructure to reduce emissions. The economics associated with this electrical transmission project could likely be significantly improved if it were constructed within an energy corridor that included not only natural gas pipelines, but a crude oil line. Natural gas liquids pipelines, ammonia and hydrogen pipelines could also benefit from following in this corridor.
Indigenous economic reconciliation – Essential to finding our way
In my article "Reconciling the Irreconcilable: Major Project Development in an Era of Evolving Section 35 Jurisprudence" (2018) 83 SCLR (2nd) 169, I address the potential for, and critical importance of, economic reconciliation with Indigenous Canadians in developing natural resources and linear infrastructure projects. The federal and provincial governments have started advancing this idea by setting up various loan guarantee programs to facilitate indigenous equity participation in such projects. This approach advances the critical need for reconciliation. Just as importantly, however, it facilitates project financing in which governments assume risk on behalf of indigenous equity participants. Indigenous equity financing displaces the need for direct government investment in projects. The risk associated with relying on indigenous equity can be mitigated by requiring minimum thresholds of non-indigenous private capital to be invested along with government-backed indigenous equity. The other advantage associated with supporting growth of indigenous equity is that it keeps capital in Canada for reinvestment. Any return of capital associated with indigenous equity is unlikely to leave Canada. It is far more likely to be reinvested here.
The pivot to producing Canada's oil and gas resources – The risk to Canada of not finding its way
For the last decade Canada's oil and gas producing provinces have been engaged in a constitutional war with the federal government over its powers to impact the production of oil and gas in an effort to meet federal emission reduction goals. This included a challenge to the federal Impact Assessment Act (IAA) that provided for the federal regulation of new oil sands production in the absence of a provincial cap on oil sands emissions.
In striking down the IAA, the Alberta Court of Appeal made a very candid observation, stating:
We recognize that some … oppose any further development of oil and gas resources in this country. Even though Canada continues to import hundreds of millions of barrels of oil annually. And even though countries such as Norway, with its strong environmental record, rush to exploit oil and gas resources in recognition of the obvious: if this is not done with urgency, these resources will become stranded. … Moreover, in our fractured world today, energy security is vital to this country's national security and that of other democratic nations.
As I pointed out when discussing this case in the context of the federal government's continued insistence on imposing an oil and gas emissions cap, the solution to our disagreements as a country cannot be resolved in the courts. A solution that everyone can live with must be found. The alternative would, in the words of the Alberta Court of Appeal, "unwind federalism."
By Bernard (Bernie) J. Roth, KC
