Canada’s environment minister says ‘No. 1 focus’ is U.S. trade

CALGARY, Alberta (Reuters) – Canadian Environment Minister Catherine McKenna said on Thursday the “No. 1 focus” of her government, including her department, is trade relations with the United States, as Canada steels itself for possible NAFTA renegotiation with its southern neighbor.

McKenna was speaking on the day Royal Dutch Shell announced it would sell most of its Canadian oil sand assets, the latest oil major to exit the region.

Opposition critics and some in the oil sands sector say tougher environmental restrictions in Canada versus the United States will make Canada less competitive.

“Canadians expect us to take climate action, but it’s also a real opportunity for us to find the solutions that are going to create jobs and grow our economy,” McKenna said at a business event in Calgary, where many Canadian oil and gas companies are headquartered.

Canada sends 75 percent of exports, including almost all of its crude, to the United States, and U.S. President Donald Trump’s vow to renegotiate the North American Free Trade Agreement (NAFTA) could negatively affect the country.

“Our No. 1 focus right now – and that includes me as environment minister – is on our trading relationship with the United States,” McKenna said. “I’ve had calls with my American counterparts .. and the first issue I raised was trade.”

While trade and the economy do not come under McKenna’s portfolio, her work in implementing her Liberal government’s national carbon tax could have consequences for Canada’s emissions-heavy energy sector, especially as it contrasts with the Trump administration’s looser approach on the issue.

The Canadian government has repeatedly made an economic argument for stronger environment regulations, saying it will create growth in the clean-tech industry.

(Reporting by Ethan Lou in Calgary, Alberta; Editing by Leslie Adler and Dan Grebler)