Canada’s Energy Production Plans Following U.S. Strikes in Venezuela
Addison Clifford
Image credit to Jeff McIntosh, found here.
The Landscape:
Following the U.S. incursion into Venezuela on January 3rd, U.S. President Donald Trump announced plans to move U.S. companies into Venezuela to establish energy infrastructure and take over their oil industry.[1] Some economic analysts stress that, because Venezuela is a direct competitor with Canada for oil production, if the U.S. is able to capitalize on Venezuela’s massive oil reserves, then it may reduce dependence on Canadian oil.[2]
In response, Canada’s plan is to “diversify [its] trade partnerships and catalyse massive new levels of investment.”[3] Prime Minister Mark Carney affirmed that Canadian oil remains competitive for being low-risk and low-carbon and that the potential U.S. tap into Venezuelan oil doesn't change this.[4] Canada also seeks to avoid being displaced in the U.S. market by remaining significantly more accessible to the Midwest U.S. than Venezuelan oil could be.[5] In order to combat U.S. oil dominance, Carney committed to strengthening ties with Asian markets and the Canada-China energy cooperation plan was released between Carney and President Xi on 15 January 2026.[6]
Conservative Party leader and MP Pierre Poilievre says “Canada must race to approve a pipeline to the Pacific Coast and move millions of barrels of Canadian oil per day overseas to break our dependence on one customer.”[7] Alberta Premier Danielle Smith echoes the sentiment.[8] And they're not alone: some vocal market analysts and leaders of Canada’s energy industry agree that the best thing Canada can do for its oil production plans post-U.S. incursion in Venezuela is invest in pipeline infrastructure and ramp up agreements with trade partners like China and Mexico.[9]
Canada's solution to the incursion in Venezuela? Heavier investment in fossil fuels.
As the government and industry ride hand-in-hand into the sunset, some analysts say that the better moves are economic diversification and a transition away from fossil fuels, as not only would this reduce Canada’s vulnerability to changes in the oil market, but it is also an essential step towards energy independence, assuring economic and political sovereignty as the Trump administration continues to threaten Canada.[10]
The trend continues…
Canada’s interest in the fossil fuel industry is not new, but it is part of an interesting trend in responding to international crises with investment in oil and gas despite its obligations towards Indigenous nations and sustainable development goals.[11] Towards the end of 2025, the federal government released a memorandum of understanding with Alberta to build a new coastal pipeline.[12] First Nations have expressed opposition to the project and demanded answers for the ambiguity and omissions in what the federal government has communicated about the Albertan pipeline.[13] Similarly, First Nations in the territory that is now northern Ontario have expressed serious concerns over the prospect of an East-West Canadian Energy Corridor and the lack of consultation.[14] Historically, Canada has routinely enabled fossil fuel companies to build oil and gas infrastructure on Indigenous lands through militarized force.[15]
Legal considerations
The primary considerations for Canada’s plans to increase investment in fossil fuels are the state’s obligations towards Indigenous peoples, given that provinces do not have the jurisdiction to legislate against federal energy infrastructure. Provincial jurisdiction extends in these cases only so far as matters truly within the province (such as construction permits, local municipality bylaws) and does not extend to anything that would interfere with the federal decision to construct a pipeline.[16] In 2020, the Supreme Court of Canada dismissed the appeal of a BC Court of Appeal decision which ruled that it was unconstitutional and outside of B.C.’s provincial jurisdiction to enact legislation that would prevent the Trans Mountain pipeline from running through its territory.[17]
Section 35 of the Constitution Act, 1982 recognizes and affirms any Aboriginal treaty rights in existence at the time of enactment.[18] It does not set out an exhaustive list of such rights, which are community-specific and to be proven in court according to tests developed by jurisprudence from the Supreme Court of Canada (SCC), and it does not preclude the government from entering into treaties with Indigenous nations, including land claims agreements. Section 35 produces a duty to consult with Indigenous peoples when the state knows of a potential Aboriginal claim or right and contemplates conduct that may adversely affect it.[19] In 2016, Canada’s Federal Court of Appeal overturned the federal government’s approval of the Northern Gateway Pipelines Project because the state failed to fulfill its duty to consult the First Nations affected.[20] There is precedent in Canadian jurisprudence that the federal government has a constitutional duty to consult First Nations when it comes to approving oil and gas infrastructure like pipeline projects. The questions remain as to what constitutes adequate consultation, and to what extent it can protect Indigenous interests in clean land and water.
Conclusion
Canada’s official response to the U.S.’s plans to capitalize on Venezuela’s oil sector is to double down on investment in local oil and gas infrastructure while renewing trade relationships with partners outside of the U.S. Politicians and industry actors alike have yet to address how they plan to navigate Canada’s legal obligations towards Indigenous nations or protect Canada’s interests in energy autonomy through renewables.
Addison is a 1L student at McGill pursuing her BCL/JD. She has a bachelor's degree in political science from McGill. She is deeply committed to sustainability and aspires to use the law to advance environmental responsibility from the ground up. The author would like to thank the MJSDL team, and extend special thanks to her senior editor Rita Slaoui for her contribution to this piece.
[1] The White House, Press Conference, “President Trump Holds a Press Conference” (3 January 2026) online: <https://www.youtube.com/watch?v=SsdkClL2_bg>.
[2] Jane Switzer, “What the U.S. takeover of Venezuela could mean for Canada’s oil industry”, Financial Post (6 January 2026), online: <https://financialpost.com/commodities/energy/what-u-s-takeover-venezuela-could-mean-for-canada-oil-industry>.
[3] Prime Minister of Canada, News Release, “Prime Minister Carney forges new strategic partnership with the People’s Republic of China focused on energy, agri-food, and trade” (16 January 2026), online: <https://www.pm.gc.ca/en/news/news-releases/2026/01/16/prime-minister-carney-forges-new-strategic-partnership-peoples>.
[4] Sarah Ritchie & David Baxter, “Carney says Canadian oil will be competitive after Maduro ouster”, Canadian Press (6 January 2026), online: <https://www.ctvnews.ca/politics/article/carney-says-canadian-oil-will-be-competitive-after-maduro-ouster/>.
[5] Kyle Bakx & Paula Duhatschek, “More oil production in Venezuela could hurt Canada's oilpatch”, CBC News (6 January 2026), online: <https://www.cbc.ca/news/canada/calgary/venezuela-oil-canada-9.7034122>.
[6] Rachael Gurney & Xiaoting (Maya) Liu, “Canada’s Oil Exporting Future: Trans-Mountain, China, Asia, and Beyond”, Asia Pacific Foundation of Canada (13 January 2026), online: <https://www.asiapacific.ca/publication/canadas-oil-exporting-future-trans-mountain-china-asia-and-beyond>.; Annie Bergeron-Oliver, “Canada, China release plan for energy co-operation”, CTV News (15 January 2026), online: <https://www.ctvnews.ca/politics/article/canada-china-release-plan-for-energy-co-operation/>.
[7] Pierre Poilievre, “Change in oil-rich Venezuela means Canada must race to approve a pipeline …” (6 January 2026), online: <https://x.com/PierrePoilievre/status/2008493725996159148?s=20>.
[8] Danielle Smith, “Recent events surrounding Venezuelan dictator Nicolas Maduro emphasize the importance that we expedite the development of pipelines …” (5 January 2026), online <https://x.com/ABDanielleSmith/status/2008253191268573560?s=20>.
[9] Switzer, supra note 2; Fakiha Baig, “Canada’s oil sector shouldn’t panic, stay competitive after Maduro’s seizure: experts”, The Canadian Press (4 January 2026), online: <https://www.ctvnews.ca/canada/article/canadas-oil-sector-shouldnt-panic-stay-competitive-after-maduros-seizure-expert/>.
[10] John Woodside & Darius Snieckus, “The Venezuela crisis has prompted Canada to double down on oil. Is that the right move?”, Canada’s National Observer (7 January 2026), online: <https://www.nationalobserver.com/2026/01/07/news/canada-venezuela-oil-gas-pipeline>; Marc Lee, “A new pipeline is the wrong response to the U.S. takeover of Venezuela”, Canadian Centre for Policy Alternatives (9 January 2026), online: <https://www.policyalternatives.ca/news-research/a-new-pipeline-is-the-wrong-response-to-the-u-s-takeover-of-venezuela/>; Ann Marie Vaughan & Steven Murphy, “Canada’s energy future: diversification is key to independence”, The Globe and Mail (28 March 2025), online <https://www.theglobeandmail.com/business/adv/article-canadas-energy-future-diversification-is-key-to-independence/>; Steven Haig, “Powering the Clean Energy Transition: Net-Zero electricity in Canada”, International Institute for Sustainable Development (2 December 2024), online: <https://www.iisd.org/articles/deep-dive/powering-clean-energy-transition-canada>; Steven Chase & Robert Fife, “Trump threatens 100% tariff on Canada if it makes trade deal with China”, The Globe and Mail (24 January 2026), online <https://www.theglobeandmail.com/politics/article-trump-tariff-canada-china/>.
[11] Kyle Bakx, “Why Canada's oilpatch can't solve the energy crisis”, CBC News (25 March 2022), online: <https://www.cbc.ca/news/business/bakx-wilkinson-oil-exports-crude-1.6396671>; Daniel Johnson & Kendra Mangione, “The calls are growing for action on energy. But what’s the next step for Canada?”, CTV News (9 February 2025), online: <https://www.ctvnews.ca/business/article/a-wake-up-call-canada-must-diversify-energy-experts-warn-amid-tariff-threats/>; Sarah Cox, “Canada’s oil and gas sector received $18 billion in subsidies, public financing during pandemic: report”, The Narwhal (15 April 2021), online: <https://thenarwhal.ca/canada-oil-gas-pandemic-subsidies-report/>.
[12] Prime Minister of Canada, News Release, “Canada-Alberta Memorandum of Understanding” (27 November 2025), online: <https://www.pm.gc.ca/en/news/backgrounders/2025/11/27/canada-alberta-memorandum-understanding>.
[13] Alessia Passafiume, “First Nations chiefs demand answers over Alberta pipeline deal that doesn't mention water”, The Canadian Press (23 January 2026), online: <https://www.cbc.ca/news/canada/edmonton/first-nations-water-oilsands-9.7057845>.
[14] Faith Greco, “Ontario pipeline corridor proposal faces pushback over lack of Indigenous consultation, environmental risks”, CBC News (21 August 2025), online: <https://www.cbc.ca/news/canada/sudbury/pipeline-corridor-proposal-opposed-indigenous-environmental-groups-1.7612796>.
[15] Kate Gunn & Bruce McIvor, “The Wet'suwet'en, Aboriginal Title, and the Rule of Law: An Explainer”, First Peoples Law (13 February 2020), online: <https://www.firstpeopleslaw.com/public-education/blog/the-wetsuweten-aboriginal-title-and-the-rule-of-law-an-explainer>; Jeffrey Monaghan, “Intense police surveillance for Indigenous land defenders contrasts with a laissez-faire stance for anti-vax protesters”, The Conversation (27 October 2021), online <https://theconversation.com/intense-police-surveillance-for-indigenous-land-defenders-contrasts-with-a-laissez-faire-stance-for-anti-vax-protesters-169589>; Amnesty International, “Canada: Sentencing of land defenders sends ‘chilling message’ about Indigenous rights”, Amnesty International (18 October 2025), online: <https://www.amnesty.org/en/latest/news/2025/10/canada-sentencing-of-land-defenders-sends-chilling-message-about-indigenous-rights/>.
[16] Canadian Western Bank v Alberta, 2007 SCC 22.
[17] Reference re Environmental Management Act, 2020 SCC 1.
[18] Constitution Act, 1982, s 35, being Schedule B to the Canada Act 1982 (UK), 1982, c 11.
[19] Rio Tinto Alcan Inc v Carrier Sekani Tribal Council, 2010 SCC 43.
[20] Gitxaala Nation v Canada, 2016 FCA 187.