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Canada deserves to know.
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Canada is the world's fourth-largest oil producer and hasn't built a major new refinery since 1984. We export 98% of our crude to one customer — the United States, which now tariffs it at 10% — much of it at a structural discount, and then re-import refined gasoline, diesel, and jet fuel. The British Columbia loop is the starkest version: Alberta crude flows down the Trans Mountain pipeline to Washington State refineries, and tankers carry the gasoline back to Vancouver. Here is the documented anatomy of the refining gap — including the honest economics of why it exists.
Canada produced about 6.1 million barrels of oil per day in 2025. Its 14 refineries can process about 1.9 million barrels per day and ran at roughly 90% of that capacity. The arithmetic gap defines the system: roughly 4 million barrels a day leave the country as crude, 98% of it to the United States (2024), where Gulf Coast and Midwest refineries — built specifically to process heavy oil — capture the refining margin. During the 2025-26 trade war, the United States imposed a 10% tariff on Canadian crude, taxing the very flow Canada depends on. Meanwhile Canada re-imports refined products, and Ontario and Quebec refineries now source their imported crude almost entirely (99%+) from the United States. The most vivid loop is British Columbia's: Alberta crude moves via Trans Mountain to Washington State refineries (BP Cherry Point runs substantially on Alaskan and Canadian crude), and the largest share of Washington's exported refined product ships right back to B.C. — a figure documented at roughly 145,000 barrels per day of crude south and gasoline/jet fuel north in the mid-2010s. No major Canadian refinery has been built since 1984; the one attempt, Alberta's Sturgeon Refinery (2017-2020), ballooned from $5.7 billion to roughly $10 billion for just ~80,000 barrels per day, with Alberta taxpayers absorbing a 50% stake plus $25 billion in 30-year processing commitments. Economists like Trevor Tombe argue the market is signalling Canada has no comparative advantage in marginal refining; sovereignty advocates answer that the trade war has repriced the risk of refining dependence on a single foreign customer. The carbon argument the operator class often makes — that the round trip burns extra emissions — is real but modest: transport is a small share of oil's lifecycle emissions compared to extraction and combustion. The harder documented cost is economic: the value-added margin, and the Western Canadian Select discount, surrendered every day at the border. Both major federal leaders now propose versions of an answer — Carney's "energy superpower" agenda and Alberta pipeline memorandum aimed at Asian markets, Poilievre's Canada First National Energy Corridor — and both, notably, are about moving more crude, not refining it.
The folk version of this story — "Canada doesn't refine anything" — is wrong, and the accurate version is more damning, not less.
Canada has **14 refineries** with a combined capacity of about **1.9 million barrels per day**, and they run hard — roughly 90% utilization in 2025. Irving's Saint John refinery is the country's largest; Alberta, Ontario, and Quebec host most of the rest.
The problem is the other number: Canada **produced about 6.1 million barrels per day** in 2025. Refining capacity covers less than a third of production. The remaining roughly **4 million barrels a day leave the country as crude** — unrefined, with the processing margin, the jobs, and the price leverage travelling with them.
And they overwhelmingly leave in one direction: **98% of Canadian crude exports went to the United States in 2024.** In 2025 the U.S. took **3.9 million barrels per day** from Canada — more than it imported from every other country on Earth combined.
One customer. For two-thirds of the product. During a trade war in which that customer imposed a **10% tariff on Canadian crude.**
The operator-level version of this story that most offends common sense is real, and British Columbia is where it lives.
B.C. has minimal refining capacity. Its gasoline comes mostly from Alberta — via the Trans Mountain pipeline — and from the **U.S. Pacific Northwest**. Washington State's five refineries, led by **BP Cherry Point**, run substantially on Alaskan crude and on **Canadian crude delivered by the Trans Mountain system**; after the pipeline's 2024 expansion, tanker deliveries of Canadian oil to Washington jumped from roughly half a million barrels in late 2023 to nearly six million barrels in a single quarter of 2024.
Then the loop closes: Washington's refineries export a share of their output, and **the largest share of those exports goes to British Columbia**. Documented mid-2010s figures put the loop at roughly **145,000 barrels per day of Alberta crude going south to Washington refineries, with gasoline and jet fuel shipped back into the Vancouver market** from the same plants.
Canadian oil, refined in another country, sold back to Canadians — with the refining margin, refinery wages, and tax base accruing to Washington State. In a normal trading relationship, that's comparative advantage at work. In a trade war, every link of that loop crosses a border controlled by the other side.
The pattern isn't only western. **Ontario and Quebec refineries now source 99%+ of their imported crude from the United States** — efficient in peacetime, single-point-of-failure in a tariff fight. (Eastern Canada's import dependence is a story we've covered before, in our BC-tanker-ban piece documenting Saudi crude deliveries to New Brunswick while Canadian tankers are banned from B.C.'s north coast.)
No major new refinery has been built in Canada **since 1984** (none in the U.S. since 1976). That isn't an accident or a conspiracy — it's a sequence of individually rational economics:
- **Capital cost.** A new full-scale refinery is a **$10-billion-plus, decade-long** project. - **Demand outlook.** Gasoline demand in developed countries has been flat-to-declining since the 2000s and the long-term forecast — electrification, efficiency — points down. Nobody finances a 40-year asset against a shrinking market. - **Competition.** U.S. Gulf Coast and Midwest refineries were purpose-built (with coking capacity) to process exactly the heavy, sour crude the oilsands produce. They are paid for, optimized, and at scale. A greenfield Canadian plant starts the race laps behind. - **The cautionary tale.** Alberta tried. The **Sturgeon Refinery** — the first new refinery in Canada in three decades — was pitched at **$5.7 billion in 2012**, rose to $8.5 billion a year later, and landed around **$10 billion**, four years late, for just **~80,000 barrels per day** of capacity. Alberta taxpayers ended up holding a **50% equity stake plus roughly $25 billion in processing-toll commitments over 30 years**. CBC opinion writers called it the "Bitumen Boondoggle"; the University of Calgary's School of Public Policy tracked the mounting costs for years.
Economist Trevor Tombe's summary of the orthodox view is worth quoting honestly: the market is telling us Canada **does not have a comparative advantage in refining at the margin** — forcing more domestic refining could shrink the economy, not grow it, when American and Asian refineries do it cheaper.
On pure peacetime economics, the refinery skeptics have the better numbers. The question 2025-26 raised is whether peacetime economics is still the right frame.
Every rational decision in the previous section shared one load-bearing assumption: **permanent, frictionless access to U.S. refineries and the U.S. market.** The 2025-26 trade war put a price on that assumption — literally, a **10% tariff on Canadian crude**.
Three consequences worth documenting:
- **The discount got company.** Canadian heavy crude (Western Canadian Select) already sells at a structural discount to the U.S. benchmark — commonly in the range of **US$10-20 per barrel** in recent years, a function of quality, distance, and above all a captive single customer. A tariff stacks a tax on top of a discount: Canada's flagship export sells low and is then taxed for arriving. - **Leverage became the debate.** Pierre Poilievre argued Canada should use oil and minerals as leverage against U.S. tariffs; Prime Minister Carney explicitly refused to "leverage" energy in trade talks. The U.S. Trade Representative, for his part, warned Canada against trying. Whatever the right answer, the fact that energy leverage is the live federal debate confirms how completely the old assumption has died. - **Both parties' answers are pipelines, not refineries.** Carney signed a memorandum with Alberta laying groundwork for a new crude pipeline to B.C.'s north coast aimed at Asian markets, under his "energy superpower" agenda. Poilievre proposes a **Canada First National Energy Corridor** to move resources to new markets. Note what both have in common: they diversify the *customers* for raw crude. Neither proposes capturing the refining margin at home. The Sturgeon experience hangs over that silence.
And the carbon question the operator class raises — doesn't shipping oil south and gasoline back burn extra emissions? **Yes, and honesty requires sizing it.** The double-handling adds pipeline-pumping and marine-shipping emissions in both directions, and it is genuinely avoidable inefficiency. But transport is a modest slice of oil's lifecycle emissions; extraction/upgrading and, above all, combustion dominate. The strongest documented case against the loop isn't the shipping carbon — it's the **billions in surrendered margin and discounted prices**, every day, to a counterparty currently taxing us at the border.
On the documented record:
- Canada produces **~6.1 million barrels a day** and can refine **~1.9 million**. - **98% of crude exports** go to one customer, which imposed a **10% tariff** on them during the trade war. - British Columbia's gasoline loop — Alberta crude to Washington refineries, fuel tankered back to Vancouver — is real and documented. - The refining gap is the product of forty years of individually rational decisions, all premised on a frictionless border that no longer exists. - The one modern attempt to close it domestically cost Alberta taxpayers ~$10 billion for 80,000 barrels a day. - Both major federal leaders propose moving more crude to more customers. Neither proposes refining more of it at home.
Whether Canada should build refineries, build pipelines to Asia, or simply accept the dependence is a legitimate policy fight with serious arguments on every side. What is no longer legitimate, after the tariff, is the premise that shipping two-thirds of our oil to a single customer — and buying some of it back at the pump — carries no risk worth pricing.
Your MP's votes on energy infrastructure, tariff response, and interprovincial trade are on the record — [find yours](/find-your-mp).
Bill C-48, passed in 2019, bans Canadian large crude tankers from the northern coast of British Columbia. It does not stop U.S. tankers from passing the same waters on their way to and from Alaska. Meanwhile, in Atlantic Canada, the largest refinery in the country runs in part on imported Saudi crude — because the Alberta-to-New-Brunswick pipeline that would have replaced those imports was cancelled in 2017. This is the geography of how Canadian oil is moved, and how foreign oil arrives in the same country.
Bell, Rogers, and Telus — plus the flanker brands they own — control roughly 90% of Canadian wireless. That dominance was constructed: foreign-ownership rules walled out deep-pocketed competitors, and every domestic challenger Ottawa seeded since 2008 was eventually bought by the companies it was created to challenge. Three federal governments, two regulators, and one Competition Bureau court fight have tried to break the pattern. The scoreboard: prices finally fell for two years — and as of late 2025, Statistics Canada says they're rising again. New CRTC switching-fee bans take effect June 12.
Tax Freedom Day is the day the average Canadian family finally finishes paying its annual tax bill and starts working for itself. In 2026, that day is June 9 — one day later than 2025, and almost two months later than 1961. The Fraser Institute's breakdown of the $72,539 bill: $25,352 in income tax, $17,069 in payroll and health taxes, $10,519 in sales tax, $7,819 in corporate tax passed through in prices, $4,939 in property tax, plus fuel, carbon, liquor, tobacco, amusement, import, and natural-resource levies. The chart shows every line.
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<!-- Parliament Audit — republished under CC BY-ND 4.0 -->
<article>
<h1>Canada Pumps 6.1 Million Barrels a Day and Can Refine 1.9 Million. B.C. Sends Crude to Washington State — and Buys It Back as Gasoline. During a Trade War.</h1>
<p><em>By Parliament Audit · June 11, 2026 · 7 min read</em></p>
<p><strong>Canada produced about 6.1 million barrels of oil per day in 2025. Its 14 refineries can process about 1.9 million barrels per day and ran at roughly 90% of that capacity. The arithmetic gap defines the system: roughly 4 million barrels a day leave the country as crude, 98% of it to the United States (2024), where Gulf Coast and Midwest refineries — built specifically to process heavy oil — capture the refining margin. During the 2025-26 trade war, the United States imposed a 10% tariff on Canadian crude, taxing the very flow Canada depends on. Meanwhile Canada re-imports refined products, and Ontario and Quebec refineries now source their imported crude almost entirely (99%+) from the United States. The most vivid loop is British Columbia's: Alberta crude moves via Trans Mountain to Washington State refineries (BP Cherry Point runs substantially on Alaskan and Canadian crude), and the largest share of Washington's exported refined product ships right back to B.C. — a figure documented at roughly 145,000 barrels per day of crude south and gasoline/jet fuel north in the mid-2010s. No major Canadian refinery has been built since 1984; the one attempt, Alberta's Sturgeon Refinery (2017-2020), ballooned from $5.7 billion to roughly $10 billion for just ~80,000 barrels per day, with Alberta taxpayers absorbing a 50% stake plus $25 billion in 30-year processing commitments. Economists like Trevor Tombe argue the market is signalling Canada has no comparative advantage in marginal refining; sovereignty advocates answer that the trade war has repriced the risk of refining dependence on a single foreign customer. The carbon argument the operator class often makes — that the round trip burns extra emissions — is real but modest: transport is a small share of oil's lifecycle emissions compared to extraction and combustion. The harder documented cost is economic: the value-added margin, and the Western Canadian Select discount, surrendered every day at the border. Both major federal leaders now propose versions of an answer — Carney's "energy superpower" agenda and Alberta pipeline memorandum aimed at Asian markets, Poilievre's Canada First National Energy Corridor — and both, notably, are about moving more crude, not refining it.</strong></p>
<h2>First, the correction worth making: Canada has refineries — just not nearly enough</h2>
<p>The folk version of this story — "Canada doesn't refine anything" — is wrong, and the accurate version is more damning, not less.</p>
<p>Canada has **14 refineries** with a combined capacity of about **1.9 million barrels per day**, and they run hard — roughly 90% utilization in 2025. Irving's Saint John refinery is the country's largest; Alberta, Ontario, and Quebec host most of the rest.</p>
<p>The problem is the other number: Canada **produced about 6.1 million barrels per day** in 2025. Refining capacity covers less than a third of production. The remaining roughly **4 million barrels a day leave the country as crude** — unrefined, with the processing margin, the jobs, and the price leverage travelling with them.</p>
<p>And they overwhelmingly leave in one direction: **98% of Canadian crude exports went to the United States in 2024.** In 2025 the U.S. took **3.9 million barrels per day** from Canada — more than it imported from every other country on Earth combined.</p>
<p>One customer. For two-thirds of the product. During a trade war in which that customer imposed a **10% tariff on Canadian crude.**</p>
<h2>The B.C. loop: selling crude south, buying gasoline back</h2>
<p>The operator-level version of this story that most offends common sense is real, and British Columbia is where it lives.</p>
<p>B.C. has minimal refining capacity. Its gasoline comes mostly from Alberta — via the Trans Mountain pipeline — and from the **U.S. Pacific Northwest**. Washington State's five refineries, led by **BP Cherry Point**, run substantially on Alaskan crude and on **Canadian crude delivered by the Trans Mountain system**; after the pipeline's 2024 expansion, tanker deliveries of Canadian oil to Washington jumped from roughly half a million barrels in late 2023 to nearly six million barrels in a single quarter of 2024.</p>
<p>Then the loop closes: Washington's refineries export a share of their output, and **the largest share of those exports goes to British Columbia**. Documented mid-2010s figures put the loop at roughly **145,000 barrels per day of Alberta crude going south to Washington refineries, with gasoline and jet fuel shipped back into the Vancouver market** from the same plants.</p>
<p>Canadian oil, refined in another country, sold back to Canadians — with the refining margin, refinery wages, and tax base accruing to Washington State. In a normal trading relationship, that's comparative advantage at work. In a trade war, every link of that loop crosses a border controlled by the other side.</p>
<p>The pattern isn't only western. **Ontario and Quebec refineries now source 99%+ of their imported crude from the United States** — efficient in peacetime, single-point-of-failure in a tariff fight. (Eastern Canada's import dependence is a story we've covered before, in our BC-tanker-ban piece documenting Saudi crude deliveries to New Brunswick while Canadian tankers are banned from B.C.'s north coast.)</p>
<h2>Why nobody builds a refinery: forty years of rational decisions</h2>
<p>No major new refinery has been built in Canada **since 1984** (none in the U.S. since 1976). That isn't an accident or a conspiracy — it's a sequence of individually rational economics:</p>
<p>- **Capital cost.** A new full-scale refinery is a **$10-billion-plus, decade-long** project.
- **Demand outlook.** Gasoline demand in developed countries has been flat-to-declining since the 2000s and the long-term forecast — electrification, efficiency — points down. Nobody finances a 40-year asset against a shrinking market.
- **Competition.** U.S. Gulf Coast and Midwest refineries were purpose-built (with coking capacity) to process exactly the heavy, sour crude the oilsands produce. They are paid for, optimized, and at scale. A greenfield Canadian plant starts the race laps behind.
- **The cautionary tale.** Alberta tried. The **Sturgeon Refinery** — the first new refinery in Canada in three decades — was pitched at **$5.7 billion in 2012**, rose to $8.5 billion a year later, and landed around **$10 billion**, four years late, for just **~80,000 barrels per day** of capacity. Alberta taxpayers ended up holding a **50% equity stake plus roughly $25 billion in processing-toll commitments over 30 years**. CBC opinion writers called it the "Bitumen Boondoggle"; the University of Calgary's School of Public Policy tracked the mounting costs for years.</p>
<p>Economist Trevor Tombe's summary of the orthodox view is worth quoting honestly: the market is telling us Canada **does not have a comparative advantage in refining at the margin** — forcing more domestic refining could shrink the economy, not grow it, when American and Asian refineries do it cheaper.</p>
<p>On pure peacetime economics, the refinery skeptics have the better numbers. The question 2025-26 raised is whether peacetime economics is still the right frame.</p>
<h2>The trade war repriced the whole arrangement</h2>
<p>Every rational decision in the previous section shared one load-bearing assumption: **permanent, frictionless access to U.S. refineries and the U.S. market.** The 2025-26 trade war put a price on that assumption — literally, a **10% tariff on Canadian crude**.</p>
<p>Three consequences worth documenting:</p>
<p>- **The discount got company.** Canadian heavy crude (Western Canadian Select) already sells at a structural discount to the U.S. benchmark — commonly in the range of **US$10-20 per barrel** in recent years, a function of quality, distance, and above all a captive single customer. A tariff stacks a tax on top of a discount: Canada's flagship export sells low and is then taxed for arriving.
- **Leverage became the debate.** Pierre Poilievre argued Canada should use oil and minerals as leverage against U.S. tariffs; Prime Minister Carney explicitly refused to "leverage" energy in trade talks. The U.S. Trade Representative, for his part, warned Canada against trying. Whatever the right answer, the fact that energy leverage is the live federal debate confirms how completely the old assumption has died.
- **Both parties' answers are pipelines, not refineries.** Carney signed a memorandum with Alberta laying groundwork for a new crude pipeline to B.C.'s north coast aimed at Asian markets, under his "energy superpower" agenda. Poilievre proposes a **Canada First National Energy Corridor** to move resources to new markets. Note what both have in common: they diversify the *customers* for raw crude. Neither proposes capturing the refining margin at home. The Sturgeon experience hangs over that silence.</p>
<p>And the carbon question the operator class raises — doesn't shipping oil south and gasoline back burn extra emissions? **Yes, and honesty requires sizing it.** The double-handling adds pipeline-pumping and marine-shipping emissions in both directions, and it is genuinely avoidable inefficiency. But transport is a modest slice of oil's lifecycle emissions; extraction/upgrading and, above all, combustion dominate. The strongest documented case against the loop isn't the shipping carbon — it's the **billions in surrendered margin and discounted prices**, every day, to a counterparty currently taxing us at the border.</p>
<h2>The bottom line</h2>
<p>On the documented record:</p>
<p>- Canada produces **~6.1 million barrels a day** and can refine **~1.9 million**.
- **98% of crude exports** go to one customer, which imposed a **10% tariff** on them during the trade war.
- British Columbia's gasoline loop — Alberta crude to Washington refineries, fuel tankered back to Vancouver — is real and documented.
- The refining gap is the product of forty years of individually rational decisions, all premised on a frictionless border that no longer exists.
- The one modern attempt to close it domestically cost Alberta taxpayers ~$10 billion for 80,000 barrels a day.
- Both major federal leaders propose moving more crude to more customers. Neither proposes refining more of it at home.</p>
<p>Whether Canada should build refineries, build pipelines to Asia, or simply accept the dependence is a legitimate policy fight with serious arguments on every side. What is no longer legitimate, after the tariff, is the premise that shipping two-thirds of our oil to a single customer — and buying some of it back at the pump — carries no risk worth pricing.</p>
<p>Your MP's votes on energy infrastructure, tariff response, and interprovincial trade are on the record — [find yours](/find-your-mp).</p>
<hr />
<p><small>
Originally published by <a href="https://parliamentaudit.ca/news/canada-refining-gap-export-crude-import-gasoline">Parliament Audit</a>
under the <a href="https://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND 4.0</a> license.
<img src="https://parliamentaudit.ca/api/republish-beacon?slug=canada-refining-gap-export-crude-import-gasoline" alt="" width="1" height="1" />
</small></p>
</article>