CAOEC's Top Executive offers solutions to counter tariff threat

By Mike Scholz

Canada is at a crossroads.

With new tariffs threatening our economy and energy sector, we cannot afford to wait and react — we must take decisive action. This is our chance to eliminate internal trade barriers, streamline regulations, and strengthen our global market access. If we act now, we can turn this challenge into an opportunity for long-term success.

The Canadian Association of Energy Contractors (CAOEC) is recommending concrete actions that can be taken right away. Our members are at the front lines of a secure energy future for all Canadians. They will feel any tariffs on the oil and gas sector first — and we also know our friends, family and neighbours on both sides of the border will feel the economic pain, too.

Getting our own house in order

Considering our now unstable and unpredictable relationship with our biggest trading partner, the best way to strengthen our position is to make our own economy more competitive, productive, and attractive to international markets that are unsure about doing business with us. That means making it easier for businesses to operate across provincial lines, ensuring our regulations maintain high standards but allow us to build the infrastructure we need, and eliminating federal policies that aren’t adding value and act like a constant parking brake on economic growth.

One tangible action we can take right away is harmonizing transportation memorandum of agreements (MOAs) across provinces to reduce interprovincial trade barriers. This is an area that directly impacts the members of CAOEC who are providing contract drilling and well servicing for explorers and producers.

Service rigs operate differently from standard commercial vehicles, with less than five per cent of their activity being transportation-related. They predominantly work at well sites in remote areas of Western Canada and do not transport goods or passengers. Generally, they are moved short distances on roads with minimal public exposure. In 2020, CAOEC successfully harmonized MOAs with Alberta and Saskatchewan to facilitate the barrier-free exchange of service rig equipment between these provinces.

These agreements establish a distinctive regulatory framework for service rigs and their support equipment, acknowledging their unique function on public roads and limited interaction with other road users. We can support small- and medium-sized energy service businesses, create jobs, and enhance economic competitiveness. We need a more integrated and efficient domestic economy that can withstand external pressures like U.S. tariffs, and this kind of practical collaboration is what Canada needs more of.

Regulatory reform and scrapping recent federal legislation

At a time when the U.S. is doubling down on its energy sector under Trump’s declared national energy emergency and cutting out Canada, we cannot afford to keep tripping over our own feet.

Mark Scholz, president and CEO of the Canadian Association of Energy Contractors.