OTTAWA — Energy and Natural Resources Minister Tim Hodgson says the federal government is open to Chinese investment in Canada’s energy sector and would not rule out allowing Chinese state-owned companies to acquire majority stakes in Canadian oil assets.
Asked directly whether majority ownership by Chinese state firms would be a red line for Ottawa, Hodgson declined to draw a firm boundary, saying each proposal would be evaluated under the Investment Canada Act.
“We will look at every investment from every country against the Investment Canada Act, and we will accept investments that are a net benefit to Canada,” Hodgson said in a televised interview airing Wednesday.
The comments signal a potential shift from Prime Minister Mark Carney’s position last spring, when he described China as Canada’s “biggest security threat.” Carney has since sought to reset relations with Beijing, becoming the first Canadian prime minister in eight years to visit China amid growing trade uncertainty with the United States.
During that visit, Carney signed a memorandum of understanding with Chinese President Xi Jinping aimed at increasing Canadian exports of oil, natural gas and clean energy to China, while reducing barriers to Chinese investment in those sectors.
Pressed on whether that agreement opens the door to majority ownership by Chinese state-owned enterprises, Hodgson said Ottawa would “calibrate” its engagement with China.
“We are open to additional investment in the energy sector by China,” he said. “We will use the same tests we always use: ‘Is it a net benefit for Canada?’”
Canada’s approach to foreign investment in the oil sands has been shaped by the 2012 approval of Nexen Inc.’s takeover by Chinese state-owned CNOOC Ltd., a decision that came with a pledge by the former Conservative government to bar future state-owned takeovers except in “exceptional circumstances.”
That policy was reinforced in amendments to the Investment Canada Act in 2022, which expanded national security review powers and limited foreign ownership approvals to rare cases.
Hodgson acknowledged a distinction between minority and majority ownership, pointing to PetroChina’s 15-per-cent stake in LNG Canada as an example of what he described as an acceptable arrangement.
“It’s done in an appropriate way, and it’s a net benefit to Canada,” he said. “We’ll look at each particular situation and decide whether it’s a net benefit for Canada.”
Hodgson also defended the case for expanding Canada’s oil export infrastructure, including the possibility of a new pipeline to the British Columbia coast. He said demand exists in both China and India, noting that Indian refiners are already purchasing Canadian crude through the Trans Mountain Expansion pipeline and via U.S. Gulf Coast terminals.
“It would clearly be cheaper for them to buy more off of our west coast,” Hodgson said. “The Indian refiners that I spoke to really like our product, and they would like to buy more.”
In November, Carney signed a memorandum of understanding with Alberta Premier Danielle Smith outlining conditions for a potential new oil pipeline to the Pacific. Alberta is currently funding early planning work on a proposed bitumen pipeline to B.C.’s northwest coast, with Smith aiming to submit a proposal to the federal Major Projects Office by June.
The idea faces resistance, including from British Columbia Premier David Eby, who argues the existing Trans Mountain expansion is sufficient and has opposed lifting the province’s tanker ban.
Hodgson said federal and provincial leaders remain aligned on the need to grow the economy while balancing environmental concerns and Indigenous partnerships.
“We all agree that we need to work together to find ways to grow our economy and do it in a way that is respectful for the environment, and we do it in partnership with First Nations and Indigenous Peoples,” he said.
