The Great American Oil and Gas Cash Grab
As Canadian politicians proclaim their intention to protect national sovereignty, American shareholders are extracting revenues from Canada’s oil and gas industry — and stiffing workers.
American ownership of Canadian resource companies doesn’t merely raise concerns about the distribution of profits but also about the influence of foreign interests on public policy and sovereignty, including national economic strategy and resource output. (Evan Vucci - Pool / Getty Images)
Last spring, while Donald Trump was levying tariffs on Canada and musing about making the country the “cherished” fifty-first state, the Liberal Party was deploying a strategy of political judo, redistributing the force of the American attack to secure an election victory. The conceit of the Liberal effort was premised on keeping national “Elbows Up,” resisting the Yankee menace through a series of measures designed to assert Canadian sovereignty and look abroad in an offer to hedge national bets on trade and defense.
It wasn’t that Canada wanted to decouple from the United States. How could the country walk away from a trade relationship worth the better part of a trillion dollars annually or a deep security partnership that has underwritten Canadian defense policy for decades? Rather, the Canadian government wanted a sustainable deal with the Americans — as close to the pre-Trump status quo as possible.
The Canadian population bought into “Elbows Up” as a call to arms, cultural and economic. Sort of. In the months following Trump’s tariffs, Canadian travel to the United States declined, along with exports and the purchase of imported American goods. But the great northern resistance only went so far. Capital investments kept flowing south from Canada. Indeed, in recent months, Canadian citizens, corporations, and even the national pension fund have poured money into American equity markets at a record-setting pace. During this time, few talked about how many core Canadian industries and their corporate leaders were American-owned, in whole or in part. Curious, that.
Who Owns Canadian Oil and Gas?
A new report from the Alberta Federation of Labour, Exporting Profits: Alberta Oil and Gas Workers Fall Behind While American Shareholders Thrive, will disabuse any Canadian who believes that the country controls its own oil and gas sector — or the profits it yields. The report’s author, Silas Xuereb, finds that in recent oil boom years in Alberta, the lion’s share of profit has gone to owners — including American concerns — and not to workers. And that dynamic is unlikely to change much, whatever we might hear about surging Canadian nationalism.
According to Xuereb, the “Big Four” oil and gas companies in Alberta, Canadian Natural Resources, Cenovus Energy, Imperial Oil, and Suncor Energy, are majority-owned by Americans, with roughly 60 percent of their shares held by US investors compared to 27 percent held in Canada. The report estimates that these companies made over $135 billion in operating profits between 2021 and 2023, of which $43 billion went to workers. During this period, corporate investment declined while employment and wages remained flat, suggesting that oil and gas is an extractive industry in more than one sense.
At the same time, the Big Four “paid out over $58 billion of profits to foreign owners through dividends and stock buybacks from 2021-2024. These profits left the country and failed to benefit Canadian workers.” Then at the end of September, we learned that amid falling crude prices, Imperial Oil was preparing to gut its workforce by 20 percent by the end of 2027, cutting roughly nine hundred jobs in Calgary.
The Power of Ownership
While the Canadian government talks about safeguarding sovereignty and asks its citizens to join it for a national reawakening, there is less discussion about the effects of American ownership of the oil and gas sector, which accounts for more than 3 percent of the country’s gross domestic product and about a third of its greenhouse gas emissions. Control over the distribution of revenue is important because those who own the company have a say in directing who gets what and who doesn’t. If Americans decide Canadian workers should get less, then those workers get less.
As Xuereb notes, “Owners receive value from profits through dividends, share repurchases and increases in share prices,” but that’s not all. Owners also have power and “determine who exercises control over the corporations’ actions,” which includes choosing the board of directors and approving of major corporate decisions. “Through these selections,” he writes, “owners can influence which projects companies undertake, whether they expand employment or lay off workers, and how much is paid out to themselves.”
Owners may also influence whether companies support or oppose state policies, particularly on climate change. Large corporations may push their own policy agenda, for instance, one premised on deprioritizing action on climate change, lowering project review and approval standards as the planet cooks. American ownership of Canadian resource companies therefore doesn’t merely raise concerns about the distribution of profits but also about the influence of foreign interests on public policy and sovereignty, including national economic strategy and resource output.
A Tale as Old as Time
Debates over foreign ownership in Canada are about as old as the country itself. Those debates are particularly sensitive when considering American control over industry, as Canadian prime ministers have learned time and time again. The lure of foreign capital is irresistible — even, or perhaps especially, during times of heightened national anxiety over American domination, economic, cultural, or otherwise. In a footrace between capital and sovereignty, the former tends to prevail in Canada, perhaps less because it’s swift of foot and more because the latter typically begins the contest well behind.
Exporting Profits confirms what any modestly attentive observer might have expected about the oil and gas industry in Canada: that while it produces returns for Canada and jobs, each comes at a cost, both to workers and national sovereignty. In parallel with debates over how the oil and gas industry ought to coexist — or not — with climate policy and infrastructure development, the country should expect and demand that more revenue be returned to workers instead of American shareholders.
Canadians should consider whether the cost of American capital, with its attendant control, is worth the return. And whether there are domestic options or arrangements that could achieve similar goals while keeping greater control of the industry at home. If it makes the political class more comfortable, they can sell it as keeping their elbows up — though perhaps they’d be wiser to market any such program as keeping Canadian pockets full.