NAFTA Submission to Global Affairs

July 18, 2017

Consultations on the renegotiation and modernization of the North American Free Trade Agreement.

Free trade in energy is a great North American success story. The Canadian Association of Petroleum Producers (CAPP) supports the continuation of free trade in energy under the North American Free Trade Agreement (NAFTA).

CAPP represents producers, large and small, that explore for and develop Canada’s oil and natural gas. Our members produce about 80% of Canada’s oil and natural gas. The upstream petroleum industry, despite the current low price environment, remains the largest private investor in Canada and among the largest sources of export revenue. Capital expenditures in 2016 are estimated to be $37 Billion with net export revenues of $40 Billion.

Free trade in energy is fundamentally a reciprocal relationship. Access to export markets for Canadian oil and natural gas is vital for our industry and the Canadian economy. Our export markets also depend on secure access to Canadian oil and natural gas to meet their energy needs and to support infrastructure and investments made in reliance on that access.

The United States is the largest export market for Canada’s crude oil and only market for natural gas. Canada is also the largest, and most secure, supplier to the United States for the imports it requires to fuel its economy. Eastern Canadian refineries have also become a new market for growing U.S. light oil production while U.S. shale gas now fuels homes in eastern Canada. Along with the flow of energy goods and products, North America enjoys rapid transfers of technology and continental flows of investment capital all of which sustain the North American energy advantage.

NAFTA has led to the creation of an integrated North American energy market which has spurred technological innovation, growth in energy supplies, a vast expansion of economically recoverable resources, and growth in energy demand. NAFTA has provided an extraordinary opportunity for energy self-sufficiency and security for many generations throughout the North American free trade area. This was unimaginable even in 1994 when NAFTA came into force. This alone demonstrates the value to all parties from free trade and the value of retaining and building on this successful framework.

We welcome this opportunity to share our views and we look forward to providing further support to you as you advance the renegotiation.

While we are concerned about the uncertainty caused by the reopening of NAFTA and would wish an expeditious conclusion, we believe it is most important to achieve a good outcome.


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