European Union

Home European Union

Carney sleepwalking Americanization of Canada: Fossil fuels, nuclear, vehicles, military, austerity, immigration and more

Mark Carney won the April 28, 2025, federal election, in part, because many Canadians believed he would be the best to face up to Trump.  Trump often refers to Canada as the 51st state. The irony is since then Carney has engaged in a plethora of initiatives to incrementally sleepwalk Canada towards Americanization of segments of the Canadian political energy and economic landscapes.

Bill C-5: Fast-tracking projects of “national interest”

One of Carney first legislative accomplishments was the hastily adopted Bill C-5 in June 2025, also known as the One Canadian Economy Act.  This Act gives Carney absolute power to approve almost whatever major projects he wants in the “national interest,” a very subjective terminology.

Under the umbrella of the Act, nearly all existing legislation can be ignored, and/or rendered ineffective, for major projects of “national interest.”

The primary objective of C-5 is to fast-track major projects such as very large-scale oil and gas export pipelines.  C-5 is in keeping Carney’s aim from the outset to make Canada an energy superpower, U.S. style.

Priority “national interest” projects, environment shoved aside

On September 11, 2025, Carney announced the first round of major projects on his to do list.  Indications were given that projects for the next round of approvals will occur sometime in November 2025.

Natural gas

One of the first to go major projects high on the agenda is that of a supporting the Phase 2 of the LNG Canada, the liquified natural gas (LNG) export terminal in Kitimat, British Columbia.

For the next round of announcements, the probabilities are good for a LNG terminal northern Manitoba, Churchill on the Hudson Bay.

This speaks to Carney’s fixation with “drill, baby drill” resembling Trump’s fetish and an affirmation that Canada is the sixth largest natural gas exporter in the world.

To this end, Carney discussed possible LNG exports to Germany while with Chancellor Friedrich Merz in Germany in August 2025.

This is incongruent with EU gas consumption down by 20% between 2021 and 2024; and EU LNG demand is expected to peak in 2025.  The EU clean energy goal is that of energy independence, favouring clean energy by 2027.

Likewise decarbonization is a global phenomenon.

Too, it doesn’t seem to phase Mark Carney that methane emission leaks associated with fracking natural gas, through to the LNG export destination and consumption, render LNG as bad as coal.

Methane has a global warming potential 80 times that of CO2 over a 20-year period.

The declining prices of renewables, mean infrastructure for electrical power from gas is headed for stranded assets.

Contrecour

On the first priority “national interest” list is the construction of a second Montreal port terminal at Contrecoeur.   This project has plethora of environmental degradation implications, including contravening the federal legislation, Species at Risk, the Canadian Environmental Protection Act and The Fisheries Act.  While the project was the object of environmental impact approval in 2021, many authorization requirements remain outstanding.

Oil export pipelines

High on the next phase of projects are cross Canada oil export pipelines comprising:

1) Energy East to cross over most of Canada from Alberta to an export terminal on Canada’s Atlantic coast; and

2) the Northern Gateway with a terminal on the Pacific coast.

Carney’s export pipeline contemplations seemingly don’t take into account the experiences of the Canadian government-owned Trans Mountain pipeline twinning project to the Burnaby, British Columbia Pacific coast.  This project, which has been operating under capacity at a loss.  It has cost Canadian taxpayers C$50 billion in federal subsidies so far and costs Canadians C$3 billion annually.

How fitting is it for Carney to appoint in August 2025, Dawn Farrell, the till then chair of the board of directors of Trans Mountain, to head up the new Major Projects Office.

Here again the matter of global decarbonization is ignored.  There is an existing oil and gas glut on global markets which will get worse as more new suppliers enter global markets while China, the European Union, South Korea, Japan, Southeast Asia, South Asia and other traditional oil and gas importers, are decarbonizing.

Decarbonized oil: An oxymoron

Mark Carney’s drill, baby drill thrust would have us believe that there aren’t serious emissions considerations related to his oil export pipelines because Canada would be exporting “decarbonized oil.” Decarbonized oil doesn’t exist, a Trump-like climate hoax!

Carney was alluding to the next set of announcements to include the carbon capture and storage project of the Pathways Alliance.

Not a single CCS project has met its goals regarding emission reductions, costs and timelines.

The Alliance is made up of 6 major oil sands producers for which the combined revenues were C$35 billion in 2022. Does the Pathways Alliance require government subsidization?

And the “decarbonized oil” does not consider that 75% to 80% of CO2 emissions occur during combustion.

Surely Carney has made a political decision without regard to the environment and economics.

Small modular reactors (SMRs), like Trump

Carney is emulating Trump’s fascination with nuclear energy.

In the works is a nuclear renaissance collaboration deal between the U.S and the United Kingdom.  This deal reserves a special focus on small modular reactors (SMRs).

Ontario’s proposal to build 4 SMRs at its Darlington site, are included in the first round of announcements.  SMRs are nascent, still experimental, with a track record on costs per unit of energy produced suggesting it should be a no go.

Governments, with the exception of China and Canada’s Ontario Premier Doug Ford, don’t see the case for SMRs for which the costs are five times that of an onshore wind farm or solar project to produce the same amount of energy.

A 2024 report of CSIRO, Australia’s science and research agency, found SMRs to be the most expensive option for power generation.  CSIRO predicted SMRs would cost US$382 to US$686 per megawatt hour in 2030.

Pedaling backwards on vehicle emissions, like Trump

The Canadian 2026 requirements for automakers to hit 20% of new vehicle sales to be zero emission vehicles (ZEVs) beginning 2026, was dropped in early September 2025.  This adjustment is in line with Trump’s plan for choice between electric and gas-powered vehicles, reversing 2025 vehicle emission rules to 2019 levels.

A Trump conflict with California is ongoing as California’s mandated target market share for ZEVs for 2026 is 35%, with significant incremental increases to 100% by 2035.  In 2025, around 25% of new passenger cars in the state are electric.

Carney and Trump and pedaling backwards on the transportation energy transition.  Global sales of electric vehicles in the first 7 months of 2025 were up 27% over 2024.

Canadian environmental bottom line

Not surprisingly,  the Carney administration cannot commit to meeting the Paris Agreement, according to a statement from the office of Environment Minister, Julie Dabrusin.

 Quadrupling military budget to attain 5% of GDP: Aligning with Trump’s Ministry of War

Responding to Trump’s nagging Canada for not spending enough on military capacity, Carney plans to quadruple Canadian spending on defence by 2030, beginning with an increase federal funding for military support by C$9 billion in the upcoming fiscal year 2026/2027, 2% of Canada’s GDP, as part of incrementally increasing military investments to reach 5% of Canada’s GDP by 2035.  There isn’t any scientific analysis as the why the military sector should be such a major percentage of GDP.

In keeping with the 5% of GDP objective, Carney’s urgent focus includes the purchasing of 12 submarines to patrol Canada’s three coasts.

This military impetus seems to conveniently ignore that the only potentially “dangerous aggressor” country on Canada’s borders is Russia, in Canada’s Arctic region.

However, submarines on Canada’s Atlantic and Pacific coasts may be justified should Canada be preparing for WWIII, with a Department of War.  This resembles Trump’s Department of War with its economic benefits.

Notwithstanding, Carney likes to boast of the economic opportunities, as a sovereign economic agency, associated with new defense spending.  Carney speaks of the economic possibilities for innovation and the creation of good new jobs for Canadians. This is similar to the Trump narrative.

Sure, there will be economic opportunities with any type of major fresh government spending.

Why emulate the U.S. military industrial complex when Canadian spending of huge amounts on cleantech innovation and deployment can close the gap in one of the fastest growing sectors in the world, a sector for which Canada is pitifully weak competitor?

Austerity cuts to government services, Trump “light”

To compensate for the sharp hike in the military budget, Carney will be cutting operational funding for federal services by 7% in fiscal year 2026-27, 10% in 2027-28 and 15% in 2028-29.

This dismisses that federal services are cracking across the board because of insufficient financial resources, people and operational needs, unable to accommodate demand.   Examples are manifold, ranging from inexpedient reviews of each immigrant’s status request to underfunded public transportation, to inadequate transfers of federal funds to support financially tormented provincial healthcare systems.

Targeting immigrants and border security, Trump “light”

Awaiting approval is Mark Carney’s Bill C-2, the Strong Borders Act, which allows for discretionary retrograding of an immigrant’s status and discretionary deporting of immigrants.   This appears to be an “emulation light” of Trump’s chaotic harsh treatments of immigrants.

Other Trump appeasing initiatives

Ceding to Trump’s rants, Carney annulled the implementation of the Digital Services Act, which, like similar Acts in Australia, France and others, would have imposed a 3% tax on digital services such as Netflix, Amazon, Google, Meta, Uber and Airbnb, crossing into Canada, earning revenues in Canada, without paying any taxes.  It has taken almost a decade for Canada to adopt this act in 2024, due to heavy lobbying/bullying.

To avoid rattling the beast, Trump, Canada will not apply retaliatory tariffs on Canadian exports to the U.S. that are impacted by U.S. tariffs and not protected by the United States-Mexico-Canada Agreement (USMCA).

Trump implemented 35% tariff on items not protected by the USMCA anyway.

The Takeaway

Mark Carney is Americanizing segments of the Canadian political landscape, but so gradually that it the cumulative results are missed by most Canadians.

Climate change has taken a back seat to Carney’s Trump-like “drill baby drill” “national interests” to favour major oil and gas projects.

Projects that defy economic and/or environmental considerations are being sanctioned, such as small modular reactors.

Hints have been offered that Canada will not comply with the Paris Agreement.

Zero emission vehicle objectives have been abandoned, emulating Trump in the process.

Canadian military spending will be quadrupled while Carney boasts of economic opportunities for doing so.  This aligns well with U.S. military-industrial complex mindset and Trump’s Department of War.

The stretched thin government services will be cut to compensate for quadrupling in the military budget.  Trump has been shown to be most enthusiastic on cuts to “wasteful” government services.

The Digital Services Act has been abandoned, though long awaited, immediately after Trump threatened more tariffs if the Act was to be implemented.

Discretionary powers to retrograde the status of many immigrants and to deport immigrants are to come, though there is no apparent need for doing so.  This may be described as a pale reflection of Trump policies on immigration.

Carney is sleepwalking the Americanization of Canada and action on climate change has been slaughtered on the altar.

Nearly all of this wasn’t laid out in Carney’s election campaign.

LNG glut: Global supply and demand trends

A digitally generated depiction of an LNG tanker escorted by tugboats navigating through coastal waters, with mountainous backdrops. This image serves well for illustrating the complexities of nautical navigation, energy trade routes, and maritime safety operations

LNG Glut Imminent

A long-term LNG glut is in the cards.

First, if all LNG planned projects are built, there will be a buyer’s market with low LNG prices.

Second, the LNG sector is shooting itself in the foot.  Higher LNG prices have translated into higher prices for LNG exporters in the short-term, a catalyst for importing gas countries to wean off volatile gas prices and supplies, especially in Southeast Asia and Europe.

The glut has been delayed by the Middle East war but nevertheless will begin in 2026 causing prices to drop.  The Middle East war is artificially keeping prices high.

Declining LNG demand

Asia

Asian demand fell 5% in 2025.  This is much due to commitments to renewables and scaled back infrastructure.

The Russian invasion of Ukraine had already pushed up LNG prices, pricing some Asian buyers out of the market.

Simultaneously, the price per unit costs of solar panels have fallen 56% from 2022 to 2026 rendering gas-fired power uncompetitive with solar plus storage.  Chinese solar panels production and exports set a record in March 2026.

LNG high prices and lower cost renewables permanently reduced LNG long-term demand by metric tonne per annum.

The Middle East war has exacerbated the trends towards LNG high prices diminishing demand in China, the Philippines, Vietnam Pakistan and Thailand where the transitions to alternative energy are well-underway.

Many countries not only sped up the transition to renewables but also set more ambitious green transition goals.

By July 2026, China’s year-to-date LNG imports dropped to their lowest level since 2019.  China’s Sinopec cancelled a 1 Mtpa LNG expansion project.

Furthermore, China is a reseller of LNG, having sold 17-19 metric tonnes (Mt) of LNG in 2025, China’s LNG surplus stemming from lower domestic consumption and dwindling reseller markets, could reach 47 Mt in the early 2030s.

Turning to South Korea, in April 2026 it announced increasing renewables capacity to achieve 100 GW by 2030, including an immediate acceleration of 7 GW of renewables and 1.3 GW of storage.  In addition, South Korea restarted 4.75 GW of nuclear by May 2026.

Due to turbine shortages, South Korea’s underutilized gas costly gas fleet cannot expand.

Then there’s Pakistan which has made a drastic transition to renewables, solar in particular, in the last two years such that it began turning back LNG ships. From the bottom up, factories, farms and individuals are switching to solar, such that solar now accounts for 20% of the electrical generation in the country.  Do it yourself installations are to be seen everywhere in Pakistan, residents using TikTok to guide them on installations.  Solar micro grids supply energy to previously undeserved regions. Indeed, Pakistan is currently China’s largest solar export market, furthering Pakistan’s energy self-sufficiency.

Pakistan may well encounter a long-term surplus of 177 LNG cargoes by 2032.

As for Thailand, it will increase rooftop solar by 5 W by 2027.

Rooftop solar capacity in the Philippines has nearly doubled from 721 MW in early 2025 to around 1.3 GW by early 2026, still only 1% of the country’s theoretical rooftop potential of 106,000 MW. Meanwhile, the Philippines, for the third time brought to an end LNG to power projects.

Vietnam repurposed 4.8 GW of LNG-to-power projects to renewable energy.

European Union

In Europe, the momentum to reduce gas consumption has been in overdrive since the Russian invasion of Ukraine. From 2021 to 2024, EU gas consumption dropped 20% and a 23% decline in EU gas imports is predicted from 2025 to 2030.

Unhinged increases in LNG supplies

Estimates of the buildout

Building LNG plants run into $20-30 billion.

Every proposed project outside the Persian Gulf is slated to be built.   From 2026 to 2030, new LNG capacity coming online will reach 254 million tonnes.  That translates into 3 times capacity growth through to 2030, compared to 2021 to 2025.  Low LNG prices definitely lie ahead, but LNG price volatility has been embedded in perceptions of importing nations, while renewables can be installed faster and at less cost.

There are 700 billion cubic metres of LNG projects waiting for a final investment decision (FID), including 110 billion in the US.  The US alone accounts for half of the upcoming global exports of LNG.  In 2025, global LNG production was at 600 billion cubic metres. The supply glut and lower LNG prices are inevitable.

Prior to the Middle East conflict, the planned LNG projects represented the biggest LNG capacity expansion in history.  About 345 billion cubic metres (bcm) of new export capacity is expected to come online between 2025 and 2030, an equivalent to 50% of currently available supply.

The International Energy Agency estimates that 140 bcm of cumulative LNG supply could be removed from the market from 2026 to 2030.  That loss could be equivalent to 15% of new LNG supply anticipated to come online during that period.

The bottom line is that supply will keep expanding while LNG imports decline.  In 2026, up until June, LNG supplies grew 17% year-over-year to 28.7 million tonnes, while the Persian Gulf output declined 25.6 million tonnes, 58%, over the same period.

Key exporters

As Qatari LNG exports recover, global markets will move back to oversupply.  When Qatar LNG exports get back to normal, “The Economist” estimates this will generate 55-75 metric tonnes of oversupply, lowering the cost of lifting LNG cargoes under most long-term contracts.

At present 3 countries represent 60% of LNG world exports, the US, Australia and Qatar.

North America, Africa and Australia will add 50 bcm of LNG supply in 2026.  During the blockage of the Strait of Hormuz, these supplies will be sold at high prices.

Mozambique to Papua New Guinea and Argentina also plan to pursue Asian LNG import markets.

In the US, since the start of the Middle East war, 3 new US export terminals have been approved to go forward.

Donald Trump’s announcement of a South Korean investments of $54 billion humongous LNG project in Alaska is on shaky ground because of the pending LNG glut.  As already indicated, South Korea cannot absorb the Alaskan LNG project output, which represents 40% of South Korea’s demand.  Accordingly, South Korea has distanced itself from Trump’s announcement.  The South Korean government claims it has only entertained preliminary talks with the US on the project, “subject to meeting commercial reasonableness.”

The Alaskan LNG project appears to be a Trump attempt to improve prospects for the Republican slate in the state to gain momentum for the mid-term elections.

The Alaskan LNG is not a godsend to counteract the crisis in the Persian Gulf.

Canada joining the club

As for Canada, the Carney administration announced the British Columbia (BC) fast-tracking of LNG Canada Phase 2 as a “national interest” priority.  This despite uncertainty over construction costs, inflation, LNG oversupply and an unstable trade environment.

LNG Canada Phase 2 goals are to produce 28 million metric tonnes per year, but has yet to secure anchor clients.  Under “normal” circumstances, a project is assessed over muti-decade projections.  Present windfall LNG profits now aren’t any guarantee for future prospects.

Annual CO2e emissions from LNG Canada will be 44 million tonnes, twice that of annual tonnes of passenger cars in Canada.

The first Phase burned of more methane than any other facility in the world.

The CoastalGas Link to transport Canadian shale gas to LNG Canada has encountered cost overruns.

The benefits will flow almost entirely to foreign entities.

One of the additional projects is BC’s Ksi Lisims, with two floating near-shore LNG production, storage and offloading facilities.  The latest project cost estimate is C$30 billion, far off from the original projection of C$9 billion.

When completed, well after the Middle East conflict, these Canadian LNG projects will face weaker demand, more abundant LNG supplies and lower prices.

The takeaway

This should be a no brainer.

LNG demand will shrink due to a global transition to renewables, economic imperatives to reduce vulnerability of importing nations to LNG prices and supplies and increasing momentum to address climate change.

Concurrently, LNG supplies are slated to explode.

The converging contradictory momentums suggest investments in new LNG projects will stumble, not worth the $20-$30 billion required for an LNG export terminal.