Trump is firing up resource nationalism. But can Canada’s energy and mining sectors pivot away from the U.S.?

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The threat of U.S. tariffs is firing up a brand of Canadian resource nationalism not seen in decades, inspiring a rallying call for this country to build more of its own energy, power and mining infrastructure. But executing on that plan will be no easy feat.

U.S. President Donald Trump earlier this week backed off from immediately imposing tariffs on Canadian imports, but the risk remains high that he’ll follow through after a 30-day reprieve runs out. Amid this threat, Canada’s resource sector, most of which would be subject to a 10-per-cent tariff, is looking at diversifying away from the United States to insulate itself from more shocks that lie ahead.

Prime Minister Justin Trudeau will host a summit in Toronto on Friday to respond to the threat of American tariffs, a gathering that will seek ways to diversify Canada’s international trade beyond the U.S.

Natural Resources Minister Jonathan Wilkinson on Thursday said Canada needs to have a conversation about whether it might be time to finally move forward in building an east-west oil pipeline. Currently, parts of this country are at the mercy of crude being piped in from the U.S.

“I do think it’s a conversation the premiers and the Prime Minister will want to have,” Mr. Wilkinson told reporters.

B.C. Premier David Eby, meantime, is already fast-tracking the permitting of resource projects, as he presses an agenda aimed at pivoting British Columbia’s resource-heavy economy away from the U.S.

In Quebec, Premier François Legault is highlighting power giant Hydro-Québec as a powerful shield to potentially dull the impact of any tariffs coming Canada’s way. He’s mulling a fundamental labour shift that would see Quebeckers who lose their jobs in a trade war redirected to work on its $150-billion power generation and grid modernization plan.

“Hydro-Québec is Quebec’s biggest strength,” Mr. Legault said Tuesday in a speech that completely reframed his government’s economic priorities in the face of Mr. Trump’s tariff threats. “This is the biggest work site in the history of Quebec.”

Chief executive officers, meantime, are calling for Canada to start building more of its own resource infrastructure to wean itself off the U.S.

“Let’s build more mines and ship our products to the U.S., if they’ll take them without tariffs,” said Stuart McDonald, CEO of Canadian copper miner Taseko Mines Ltd., operator of Canada’s second-biggest copper mine. “If not, these are resources that can be sold to Asia or elsewhere.”

Adam Waterous, CEO of Waterous Energy Fund, says Canada’s oil sector can weather the tariff threats by building more pipelines.

“Canada can still win the war, he said. “Not by fighting, such as cutting off Canadian oil shipments to the U.S., but by immediately starting construction on the Northern Gateway and Energy East pipelines.”

But reducing Canada’s reliance on the U.S. will be extremely difficult in resources, owing to an array of factors, including Canada’s huge dependence on the U.S. – about 95 per cent of Canadian crude exports, and 56 per cent of Canada’s minerals and metals exports go there. There are also massive logistical challenges involved in diverting resources to other markets, extra costs in doing so and, in some cases, a lack of viable alternative customers.

Meanwhile, across Canada, climate activists have warned about the environmental effects of resource extraction, aligning themselves with Indigenous groups to oppose large new projects, all of which threaten to derail any fast development.

Some sectors within Canadian resources have wiggle room to pivot away from the U.S. relatively painlessly, and they are looking at doing so. But others are extremely vulnerable and essentially bracing for impact.

Canada’s iron and steel industry is the single biggest part of Canada’s minerals and metals export trade with the U.S., accounting for $20-billion in 2023. Ninety-nine per cent of Canada’s steel exports go to the U.S. François Desmarais, vice-president, trade and industry affairs with the Canadian Steel Producers Association, said “just the threat of tariffs” causes significant disruption, and if Mr. Trump follows through, it would result in a “doomsday” scenario for the industry.

Essentially U.S. tariffs would result in a vicious cycle of less demand from customers there and less corresponding demand for raw materials imported from the U.S., something that could result in mass layoffs. The steel sector is particularly vulnerable because dumping by China, the world’s biggest producer, means it is nearly impossible for Canadian steelmakers to sell into other markets. In addition, the high costs of transporting steel make it uneconomic to ship to markets other than the U.S.

Canada’s aluminum producers are much better protected from the threat of tariffs, even though 90 per cent of Canada’s output of primary metal goes to the U.S. That’s because about two-thirds of the Canadian aluminum sold to the U.S. is ingots, a commodity product that can easily be sold to other markets, such as Europe, said Jean Simard, president of the Aluminium Association of Canada. Aluminum’s lower density compared with steel, and the higher price it receives in the market per tonne, means that freight costs do not significantly hurt margins if shipments are diverted to Europe.

“You just put it on a ship and you send it there,” Mr. Simard said. “Because Europe is what we call a deficit market, which means they consume far more than what they produce.”

The nickel industry is also well-positioned. Mark Selby, CEO of Canada Nickel Co., which is developing a massive nickel project in Ontario, said that Canadian nickel producers should be able to seamlessly shift sales to Europe because, like aluminum, the continent is a net importer of the metal.

“If the U.S. market is off limits, or difficult because of tariffs, because we produce a zero-carbon product, Europe is the place on the planet that cares most about the carbon footprint, so we’ll be a product of choice for that market,” he said of nickel that will be produced at his company’s Crawford mine.

The energy sector is facing massive challenges, though, in distancing itself from the U.S., and there are few easy fixes.

The vast interconnectedness of the Canadian and U.S. oil and gas sectors means that the majority of Canadian exports will likely still be sold to the U.S., observers predict. However, U.S. tariffs on Canadian oil are expected to spur producers to maximize exports to non-U.S. markets.

The $34-billion Trans Mountain pipeline expansion nearly tripled capacity to transport Alberta crude to the Pacific Coast to 890,000 barrels a day, opening up new markets, including Asia.

Ami Broom, manager, external communications, with Trans Mountain Corp., said in an e-mail to The Globe and Mail that the company is looking at opportunities that would “increase the capacity of the expanded system, ideally in the next four to five years.”

Despite being a global player in energy, significant swaths of Canada depend on the U.S. for imports of crude oil, natural gas and refined petroleum products. Ontario and Quebec are particularly vulnerable, with about half the natural gas they consume imported from the U.S., according to the Canadian Association of Petroleum Producers industry group.

One Montreal refinery supplying Quebec and Ontario leans heavily on crude from the U.S., and even the Western Canadian oil it processes must travel by pipeline through northern U.S. states because there is no direct conduit across this country.

An Angus Reid poll published this week found that four out of five Canadians say Canada needs to ensure it has oil and gas pipelines “running from sea to sea.” But currently, there is no such infrastructure running entirely across Canada.

Cross-Canada pipelines that would carry oil and gas across the country and bypass the U.S. have been proposed as far back as the 1950s, but none have been built yet. Most recently, TC Energy Corp.’s Energy East pipeline proposal, a 4,600-kilometre-long pipeline that would stretch from Alberta to an export terminal in Saint John, was cancelled in 2017 amid heavy political opposition in Quebec and elsewhere and poor economics owing to falling oil prices.

Quebec, meantime, is making it clear that the environmental impact of building such pipelines will be closely scrutinized.

“We are not opposed to energy projects that respect environmental criteria,” Benoît Charette, Quebec’s Environment Minister, told reporters Wednesday in Quebec City. He made the comment after being asked about the government’s stance on the GNL Québec natural gas project, which Quebec and Ottawa both opposed and was later abandoned.

B.C. Premier Mr. Eby’s office this week said that one of the B.C. projects that are slated to be expedited is Cedar LNG, which is under construction in Kitimat and it should start exporting liquefied natural gas to Asia in late 2028.

Also on the list is the North Coast Transmission project, which would run along the route of an existing B.C. power line between Prince George and Terrace. Hydroelectricity demand would be from projects seeking to export LNG to Asia, as well as power requirements for hydrogen, critical minerals and the Port of Prince Rupert.

But winning approvals from regulators in B.C., or in other provinces, does not guarantee that companies will press ahead with their projects. There are lingering economic, political and geographic barriers to entry.

Pieridae Energy Ltd.’s now-defunct Goldboro LNG project in Nova Scotia received a permit in 2018 for construction in that province. Natural gas could be transported through a pipeline from Western Canada to Ontario to get partway to the East Coast. But there isn’t a natural gas pipeline to directly connect Quebec with New Brunswick, and then on to Nova Scotia.

In Quebec, Mr. Legault’s expansion plan for Hydro-Québec, which is led by CEO Michael Sabia, involves building thousands of new wind power turbines, 5,000 km of new transmission lines, and speeding up of the pace of investment to $16-billion per year. That’s twice what was spent annually during the construction in the 1970s and 1980s of the James Bay hydropower stations – facilities on which Hydro-Québec built its reputation as one of the world’s biggest producers of low-carbon electricity.

Hydro-Quebéc’s Mr. Sabia has estimated that he will need 15,000 workers this year to build out the infrastructure the utility is planning, and 55,000 workers by 2033. It’s not clear where that staff will come from. Meanwhile, there are already rumblings among Quebec business leaders in some export sectors that the government shouldn’t rob them of talent but rather concentrate on salvaging the province’s existing factories by helping them find new products and markets.

“The main focus right now needs to be to try to save as many manufacturing enterprises and jobs as we can,” said Julie White, CEO of the Quebec Manufacturers and Exporters association.