Toronto Star
Opinion | War is the worst
time to find Canada — still —
without a national oil reserve
March 26, 2026
By Gordon Laxer, Contributor
Gordon Laxer is the author of “Freezing in the Dark: Why Canada Needs Strategic Petroleum
Reserves” and professor emeritus of political economy at the University of Alberta.
Can Canada insulate itself from oil volatility caused by U.S. President Donald Trump’s illegal bombing of Iran? Experts say no. History says yes.
Iran’s retaliation against American attacks has disrupted oil supplies. Gasoline prices have spiked and left shocked Canadian motorists to
wonder why their lives should be so affected by events in the Persian Gulf. Doesn’t Canada produce enough oil to supply all its provinces?
Yes — and it can supply them quickly, without waiting 10 years to approve and build a 4,600-kilometre pipeline from Alberta to New
Brunswick.
Governments are overly influenced by Big Foreign Oil. There has been no large Canadian-owned oil company since 2009, when Suncor took over Petro-Canada. Profit, not securing domestic energy for
Canadians, is the sole priority.
Recklessly, Canada has no plan for oil shortages in Atlantic Canada. Newfoundland has plenty of oil but exports most of it — in a global supply crisis, Newfoundlanders could freeze in the dark.
Atlantic Canada’s refineries import about 85 per cent of the oil they use. The federal government should redirect Newfoundland’s oil to displace imports. This could supply about 85 per cent of Atlantic
Canada’s current demand, and by 2030, its entire demand, along with eastern Quebec’s: Newfoundland and Labrador plans to double its oil
production by then.
Western Canada, Ontario and western Quebec, including Montreal, rely mainly on Western Canadian oil.
Redirecting Newfoundland’s oil would be far cheaper and quicker than building a pipeline. Refiners would have to retool to handle Newfoundland’s mix of sweet light crude and heavy oil. As a matter of
national security, contracts for Newfoundland oil exports to the United States must be redrawn.
Whenever war breaks out, I get calls for interviews. Why doesn’t Canada have strategic petroleum reserves? War is the wrong time to build them — oil prices are too high. But war is the best time to release oil from reserves in those countries that had the foresight to create their own: every other member of the International Energy Agency (IEA), for example, including net-exporters like the U.S. and Norway. Fill our reserves when oil prices drop, then sell high.
In 2008, I wrote a report calling for Canada to build strategic petroleum reserves. It got play, but the Harper government balked. So did subsequent Liberal governments. We could sure use them now.
The previous year, I gave expert testimony to a parliamentary committee on a proposed “Security and Prosperity Partnership,” or SPP, with the U.S. and Mexico. The Conservatives supported
integrating Canada’s energy system with America’s.
As I said then, I don’t understand why the federal government wants to help with U.S. energy security when it has no plan to get oil to Eastern Canada in the event of an international supply crisis. Canada
is the IEA’s most vulnerable member. Halfway through my testimony, Conservative MP Leon Benoit, chair of the parliamentary committee,
cut me short, ruling my call for a Canadian SPP — that is, Secure Petroleum Plan — to be off-topic.
When opposition MPs on the committee successfully challenged the ruling, Benoit banged down his gavel. “Meeting adjourned,” he intoned before storming out.
The government’s SPP died because of protests in Canada and the global financial crisis, which struck the next year. Unfortunately, my SPP
died, too — but in light of Trump’s 51st-state threats, it’s time we revisited the idea.
Pundits say we’re too small a player to have a made-in-Canada oil price. That’s nonsense. We did it when we had half the population we have now: in 1961, John Diefenbaker’s Progressive Conservative
government brought in the National Oil Policy, mandating that Ontarians and Westerners use Alberta oil. These consumers subsidized oil in Alberta by paying above the international price. It’s a
nation-building story Alberta separatists don’t want you to hear.
The policy lasted from 1961 to 1973, a year longer than the National Energy Program (and its nameless predecessor), which instituted a Canadian oil price lower than the global one and remained in place
until 1984.
As Trump wages economic war on Canada, we must redress the opportunities we’ve missed. Strategic petroleum reserves should be part of a broader arsenal for Canadian security and independence. The war in Iran has shown how risky relying on oil can be.
With the world shifting away from fossil fuels, our challenge is to create energy self-reliance through renewables. They’re Canadian,
and they’re our future.