On January 16th, 2026, an announcement Prime Minister Carney forges new strategic partnership with the People’s Republic of China focused on energy, agri-food, and trade stated: “In a more divided and uncertain world, Canada is building a stronger, more independent, and more resilient economy. To that end, Canada’s new government is working with urgency and determination to diversify our trade partnerships and catalyze massive new levels of investment. As the world’s second-largest economy, China presents enormous opportunities for Canada in this mission.”
Canada and China signing the new trade series of agreements in Beijing reflect a rekindling of their relations. The result will be more Canadian oil and canola seed exports to China and more Chinese electric vehicles and renewable energy technology sales to Canada.
Michael Gullo, Vice President, Policy, Business Council of Canada noted: “Prime Minister Mark Carney’s visit to China … represented a meaningful step in sustaining momentum for Canada’s energy sector. The two-day trip resulted in a formal energy pact with Beijing, where the two countries pledged to establish a ministerial dialogue to explore opportunities from oil and gas, to nuclear and renewables.”
The Prime Minister’s office said that a key goal was to increase trade between the two countries: “Canada has set an ambitious goal to increase exports to China by 50% by 2030. To achieve this outcome, Prime Minister Carney and President Xi discussed increasing two-way investment in clean energy and technology, agri-food, wood products, and other sectors.”
Oil Exports a Key Driver
Canadian energy industry representatives are welcoming the closer ties between China and Canada, because they worry about increasingly disruptive relations with the United States. They see China as a more reliable and long-term trading partner for Canadian exports.
According to a report by Canada’s Resource Works reporter Nelson Bennett, Canadian energy experts are saying that the U.S. under Trump is proving to be an increasingly capricious and hostile trade partner, creating an imperative to diversify markets for Canadian commodities, especially oil: “We already knew there was unreliability building there,” said energy analyst Rory Johnston of Commodity Context.
Increased oil exports to China will likely need an additional pipeline on top of the existing Trans Mountain Expansion (TMX) which pumps oil with a capacity of 890,000 barrels per day to the Port of Vancouver.
Mark Maki, CEO, Trans Mountain Corporation explained: “On May 1, 2024, we began commercial operations of the expanded Trans Mountain system. Building a system which increased capacity from approximately 300,000 to 890,000 barrels per day (bpd) is proving to be one of the most strategic investments Canada has ever made. It has allowed us to diversify Canada’s customers for our oil which has increased revenues and provided Canada with trading options in the face of tariffs from our biggest trading partner, the United States.”
The Trans Mountain Expansion Project (TMX) runs from Edmonton, Alberta, to the Westridge Marine Terminal at the Port of Vancouver, British Columbia.
The report noted that the biggest challenge for TMX is limited terminal capacity: the Westridge Marine Terminal cannot accommodate the Very Large Crude Carriers (VLCC).
Port of Prince Rupert
However, VLCCs can be accommodated at the Port of Prince Rupert. This supports the argument that a new pipeline to Prince Rupert would allow bigger tankers to ship oil to China.
A pipeline to Prince Rupert could be cheaper than adding a third line to TMX, said Heather Exner-Pirot, Director of Energy, Natural Resources and Environment for the Macdonald Laurier Institute, as quoted by the Resources Works report.
The Port of Prince Rupert occupies 667,731 hectares (1,650,000 acres) of land and water along 20 kilometres (12 miles) of waterfront. The port is located in Prince Rupert Harbor in the North Coast Regional District of British Columbia. The Port of Prince Rupert is the third busiest seaport in Canada by container volume and cargo tonnage after the Port of Vancouver and Port of Montreal. The port is also the deepest ice-free natural harbor in North America, and the third deepest natural harbor in the world.
The Chinese government was “very clear they would like more Canadian energy products,” Natural Resources Minister Tim Hodgson told reporters during the Carney visit to China as quoted by Bloomberg.
Increased Canadian Ag Exports to China
At a time, when Trump administration tariffs on Chinese goods resulted in retaliatory Chinese tariffs on U.S. agricultural exports to China, Canada’s new agreement with China will increase canola seed and seafood exports:
“By March 1, 2026, Canada expects that China will lower tariffs on Canadian canola seed to a combined rate of approximately 15%. China is a $4 billion canola seed market for Canadian producers, and this change represents a significant drop from current combined tariff levels of approximately 85%. Canada expects that Canadian canola meal, lobsters, crabs, and peas will not be subject to relevant anti-discrimination tariffs from March 1, 2026, until at least the end of this year.”
