This is the 50th anniversary year of the G7, and when its leaders meet in Alberta next month, many will wonder if the group has another 50 years in it.

Their finance ministers may have the same questions this week when they meet in Banff, asking if the champions of democratic capitalism can overcome a tariff war, threats of stagflation and growing concerns about the U.S. debt. 

The fate of democratic capitalism may hang in the balance. 

I spent part of last week in Ottawa, with a group called the B7, made up of business leaders from across the seven leading democratic economies, and didn’t come away feeling enthusiastic about the West’s great project. Since 1975, when the world was struggling with oil shocks and monetary crises, the G7 has helped maintain economic and financial stability. Most of the heavy lifting was done by the U.S., with assists from Germany and Japan, but the coordination of economic and monetary policy across the broader group was essential, too.

Now that’s fading. You just need to look at Donald Trump’s visit to the Persian Gulf last week to see how much capital’s centre of gravity has shifted. China and Latin America are laying claims, too.

And if trade follows geopolitics, we can expect more disruption to come.

So what can the G7 do? Perhaps develop new ways to generate, attract and reinvest capital. 

For too many years, the public and private balance sheets of the leading democracies have focused on short-term objectives. Meanwhile, the non-democratic world has amassed capital for decades-long projects. 

With their economies struggling and debts growing, G7 countries now face a $15-trillion infrastructure gap, to rebuild supply chains, expand production of critical minerals, develop capacity for AI-powered economies, and decarbonize energy systems. 

Canada can help shift the alliance’s thinking to those longer-term needs. That won’t be easy given political tensions between the Trump administration and most of the G7 allies. But with U.S. engagement, the G7 can create new approaches for democratic capitalism, including:

• coordinated investments across countries.

• more institutional capital for priority projects. 

• preferential approaches to procurement. 

• joint approaches to procurement, especially of energy, advanced technologies and critical minerals.

• shared standards, measurements and principles.

You can read the B7 group’s final communique here.

Donald Trump has set out to remake the global trading order, and with it America’s relationship with the global economy. Unsettling as that is, it’s neither new nor sudden. Trade reform has been a dominant part of American political thinking since the collapse of the Berlin Wall and, with it, the end of a Communist counterweight to global capitalism. While resistance can be traced back to the early days of NAFTA, the fragility of America’s trade confidence really rose to the fore during the Global Financial Crisis and in the years that followed as China grew emboldened with its claim for great power status.

Brick by brick, it’s now orchestrating the dismantling of another dominant structure of the 20th century—the supporting wall of a global economy, one that relies on American military protection, legal principles, and monetary policy. The emerging trade war of 2025 is as much about Pax Americana Oeconomia as anything else and is quickly threatening to create a wholesale break in that support, equal in consequence perhaps to that moment in 1989. It’s why some Trump advisers have called this moment one of “generational change” in trade.

The shape of the global economy, and its direction heading to the 2030s, is in play, and few countries have as much at stake as Canada—because few countries benefitted as much from that trading era that may now be in its twilight. Each country is each other’s largest customer, with over 75 percent of Canadian exports going to the U.S. and 17.3 percent of American goods exports destined for Canada. The two-way trade is more than commercial; the two neighbours have come to rely on each other for energy and food security, military security, and economic security, through aligned standards and principles for everything from car parts and aeronautics to telecom protocols and computing principles.

For Canada to navigate this new age of disruptive economics, in which those long-term understandings may now be at the perpetual whim of political capriciousness and mercantile mindsets, a more strategic approach will be needed. Yes, our future will be more beholden to tariffs and tirades—but beyond those moments, it will be shaped in more lasting ways by our understanding of America’s fundamental challenges, and whether we can help address them, to ensure the generational change helps us regenerate our economy. Among those challenges:

It’s security, stupid

The Trump economic agenda is about security more than prosperity. It’s why security and trade policies are more intertwined than we’ve seen in decades, even though the U.S., remarkably, has not fought a war over trade interests since becoming the world’s dominant economy. The tariff threats are not so much a shakedown, to gain advantage in bilateral and multilateral deals; they’re aligned with an American First view of the world. We can expect, in the coming years, to see the U.S. pull back to this hemisphere, in military and trade engagement. That is, unless and until U.S. economic interests come under threat. This new imperative will require Canada to play a greater role in policing global trade

The world is no longer flat

Successive U.S. Administrations have undermined the World Trade Organization enough to make it largely insignificant to major trade considerations. Trump is now out to remake the broader system, targetting the preferential tariff regime that the U.S. created, coming out of the Cold War, to stimulate growth in allied and developing economies. The U.S. effective tariff rate, at about 3 percent, is the lowest among major economies. The European Union’s effective rate on imports is 5 percent; China’s is 10 percent; Bangladesh’s is 155 percent, the world’s highest. The resulting re-orientation of global trade will complicate Canada’s ambitions to diversify exports.

King Dollar is dead? Long live King Dollar

Underlying America’s trade imbalances is its very awkward position as a backstop for the global economy. The U.S. dollar, as the reserve currency, continues to pull capital to the U.S., in turn making its exports less competitive. The dollar’s strength, in turn, makes its cost of borrowing cheaper than it should be—enabling a credit binge for governments and consumers, and permitting a series of administrations to run fiscal deficits that do little to make America competitive again. As the world’s leading economy became a consumption machine, it relied ever more on imports and the ever-growing need to find cheaper imports, so as not to fuel inflation. Canada will need to join others in helping to rebalance global currencies.

Many have suggested the need for a new version of the Plaza Accord—the 1988 agreement, following a stock market crash the previous year, that helped reset the dollar against other major currencies. That would be much harder today, given the dollar’s dominance over all other currencies, accounting for roughly 60 percent of the world’s $12 trillion in foreign exchange reserves. Moreover, since 1988, the U.S. debt, as a share of GDP, has tripled. The best hope may be a long-term transition that incents America’s leading trade partners, including Canada, to share some of the hidden costs of a reserve currency.

These are some of the strategic pressures the U.S. is facing, and integrating in its approach to trade. It needs others to help police global commerce, including shipping lanes. It needs others to increase its imports of American goods, including energy. And it needs others to help destress long-term pressures on the U.S. dollar and even pay part of the cost of running a reserve currency (through tighter fiscal or monetary policy).

With these major forces at play, we can expect the U.S. to continue to push for trade reforms, perhaps radically so.

What it means for Canada

A headline tariff rate of 25 percent is unlikely, given the blowback that would cause to the U.S. economy and consumers. But its potential impact should not be lost on Canadians: according to RBC Economics, such a tariff hit would cause unemployment to rise above 8 pecent, cut GDP growth in half this year, and add 2.5 percent to consumer price increases. It would also cost U.S. consumers, on average, $1,200 USD a year.

Such modelling is a challenge in that tariffs are never applied in isolation. Also to consider is the likelihood of counter-tariffs, and worse, escalation, as well as the impact on the Canadian dollar. A further factor is the ability of firms to absorb the cost of tariffs, through efficiencies and margin compression. Many Canadian firms have hinted they can absorb a 10 percent tariff, by dividing the cost roughly in thirds—for consumers, intermediaries, and their own profits. In fact, Canadian profit margins have reached relatively high levels, in part because of the 70-cent dollar along with capacity challenges in the U.S., including labour shortages.

But that’s just one measure, by the standard of profit-and-loss statements. The unpredictable trade policies of the Trump administration also create an insidious tax on investment confidence. The Economic Policy Uncertainty Index for Canada has increased to its highest level ever—four times higher than its 20-year average, and well above where it was during the COVID pandemic. Merger and acquisition activity has also slowed, as have investment intentions in machinery and equipment. There is an additional negative effect emerging as firms stockpile inputs and exported outputs ahead of any anticipated tariffs and non-tariff barriers. We saw signs of this in January, as manufacturers hurried to get products across the border, even at a cost of greater inventory management.

That reaction—or pre-emptive action—could lead to an industrial slowdown in subsequent quarters. Add to that an expected decline in consumer confidence, as Canadians read of projected job losses, company closures, and needs for government support, which could lead to interest rate cuts.

In that mix, the Bank of Canada faces a dilemma as difficult as it saw during the pandemic when the supply side of the economy was shut down. Tariffs can simultaneously slow economic growth and increase prices. Deciding whether to adjust interest rates will depend on which effect—inflationary or deflationary—proves more dominant. And as was true in the pandemic, much of that will depend on innovation and the creativity of firms to manage the shock, which we tend to see only in hindsight.

Finally, and equally challenging for the Bank of Canada, there will likely be significant federal and provincial supports for affected businesses and workers, including subsidies and tax relief. This will be politically necessary and economically risky, as it could strain public finances, influence Canada’s credit rating, and prove pro-cyclical if it coincides with interest rate cuts.

How to navigate the uncertainty

While the exact impact of tariffs on the Canadian economy remains uncertain, we know from past experiences and economic fundamentals how such trade disruptions might further unfold.

The first thing to recognize is that trade-sensitive industries will be most vulnerable. Tariffs function as taxes on the movement of goods, not on production. Therefore, industries that rely heavily on cross-border trade—such as automotive manufacturing—face the greatest risk. Decades of free trade have led to deeply integrated supply chains, where goods cross borders multiple times at different stages of production. This means that tariffs can apply multiple times within the same production cycle, compounding costs. The auto industry is most typically cited, but there are similar examples in most sectors: Maine lobsters, for instance, are sent to Canada for processing and then returned to the U.S. market. Overall, more than 60 percent of Canada’s manufacturing sector has trade flows with the U.S. that are at least twice the size of their domestic production.

In addition, even if Canada does not impose retaliatory tariffs, U.S. tariffs alone can indirectly harm Canadian businesses. Because of the tight integration between U.S., Canadian, and Mexican manufacturing sectors, tariffs on U.S. industrial imports will drive up costs for U.S. exporters. This, in turn, raises the price of goods that Canada imports from the U.S., creating an inflationary effect. The OECD estimates that a significant portion of U.S. imports are actually American-made goods that were exported for processing and later re-imported. The result is that North American manufacturing supply chains suffer more from tariffs than those in Asia or Europe.

A clear target for Trump is steel and aluminum, in part because of his stated belief that “if you don’t have steel, you don’t have a country.” The U.S. accounts for over 90 percent of Canadian steel and aluminum exports, meaning these tariffs directly impact nearly $24 billion worth of Canadian goods. However, the trade relationship is deeply intertwined—Canada is also the largest supplier of these metals to the U.S., making up about 20 percent of American steel imports and 50 percent of aluminum imports. In 2024, U.S. steel imports from Canada totaled $7.5 billion, while aluminum imports reached $9.4 billion.

While Canada maintains a trade surplus in these industries—$14 billion in 2024, with $11 billion from aluminum—their overall contribution to the national economy remains relatively small. Steel and aluminum represent just 0.5 percent of Canada’s GDP and jobs and about 3 percent of total exports. Quebec and Ontario are the most affected provinces, where these sectors account for 1 percent and 0.6 percent of GDP, respectively.

The U.S. market also has limited alternatives to replace these goods. The 2018-19 tariff experience demonstrated that U.S. producers struggle to replace Canadian steel and aluminum. Most alternative suppliers also face tariffs and production capacity cannot be expanded quickly. Many specialized products are difficult to substitute, forcing U.S. importers to absorb higher costs. Interestingly, despite the 2018 tariffs, U.S. imports of steel products increased, with Canada, Mexico, and Europe slightly growing their market share. In Canada, employment in steel and aluminum industries grew by 4 percent in 2018 and 6 percent in 2019. Meanwhile, U.S. steel and aluminum production capacity actually declined over the tariff period.

What Canada can do

In the near term, Canada may find itself in a tariff brawl, absorbing and delivering blows with our biggest trading partner. We need to think longer-term, too, simultaneously investing in our own trade diversification while exploring ways to help the U.S. address its secular economic challenges. In the long run, those will be our challenges, too.

We can start with our natural resources, not only because Trump has cited them as targets. Canada must continue to highlight its critical role in U.S. energy and economic security, emphasizing its resource wealth with the goal of avoiding American trade threats.

In addition, a focus within Canada on developing key commodities can drive industrial growth, boost GDP, attract investment, and advance Indigenous participation, making Canada further indispensable to U.S. interests. Geographic diversification of Canadian resource exports is also essential, as expanding trade beyond the U.S. mitigates risk. Washington already acknowledges Canada’s resource importance, offering a negotiating advantage. By prioritizing energy, agriculture, and critical minerals, Canada can strengthen its position as a key partner in global trade and U.S. economic stability.

Consider just how important these commodities are to the American economy.

Canada’s oil, natural gas, and electricity exports play a crucial role in stabilizing U.S. energy reserves. Integrated pipelines and cross-border electricity grids facilitate a seamless supply of energy, while expansions such as the Trans Mountain pipeline allow Canada to increase its capacity to serve both the U.S. and international markets.

Canada supplies 60 percent of U.S. oil imports, particularly heavy crude oil that is vital for U.S. refineries. Without Canadian crude, U.S. refineries would face expensive retooling or become reliant on riskier suppliers like Venezuela and the Middle East. Similarly, Canada provides 90 percent of U.S. electricity imports, offering a low-cost and clean energy alternative that supports high-tech industries such as artificial intelligence and advanced manufacturing. Additionally, Canada supplies 99 percent of U.S. natural gas imports, which are essential to meet growing U.S. energy demands, particularly as domestic production struggles to keep pace.

Canada is also a vital contributor to U.S. food security, providing key agricultural commodities that support American food production and biofuel industries. With the U.S. facing potential labour shortages due to immigration policies, Canada’s role in supplementing the North American food supply will become even more critical.

Canada supplies 98 percent of U.S. canola oil imports, a crucial ingredient in both food processing and biofuel production. Additionally, the U.S. imports 34 percent of its meat from Canada, particularly beef and pork, which are deeply integrated into North American supply chains. Furthermore, Canada provides 85 percent of U.S. potash imports, a critical component in fertilizer that supports crop yields, especially in the face of climate-related agricultural challenges.

Finally, as the U.S. seeks to reduce its reliance on China and Russia for critical minerals, Canada has the opportunity to strengthen its role as a key supplier for industries like clean energy, semiconductors, and defence. Canada currently provides 19 percent of U.S. critical mineral imports, including essential resources like nickel, aluminum, and zinc. With the right investments and policy support, Canada could further expand its capacity in these sectors.

Additionally, Canada is a crucial partner in the U.S. nuclear energy sector, supplying 27 percent of U.S. uranium imports. As America looks to expand its nuclear energy capabilities, Canada’s advanced uranium mining, conversion, and small modular reactor (SMR) technologies can help fill gaps in the North American nuclear fuel cycle.

To maximize its resource advantages, Canada must invest in infrastructure, create a stable regulatory environment, and attract capital for long-term development. Expanding global trade partnerships—particularly in Asia and Europe—can reduce Canada’s overreliance on the U.S. while ensuring resilience in the face of shifting geopolitical dynamics.

But long term, Canada can’t always run large trade surpluses in these sectors, as such imbalances have the derivative effect of destabilizing the world’s largest economy. We can seek other markets for these resources and also look to buy more resource-related products from the U.S.—be it enriched uranium or packaged foods. That is, if the U.S. is interested in a negotiated approach to trade balances.

On that front, an accelerated renegotiation of the USMCA trade agreement seems both inevitable and in Canada’s interest. A quick resolution to the lingering uncertainties and frustrations in the original agreement might reduce the uncertainty that’s come with the Trump tariff threats. A renegotiation—ideally, free from the threat of tariffs—could help address trade concerns in the new, digital economy, including Canada’s adherence to a digital sales tax. Perennial concerns over Canada’s lumber and dairy sectors might also be resolved, helping create a new agreement that could reinforce North America’s value to global investors. The agreement can do more—to Canada’s benefit—to enshrine human rights and environmental standards in North American trade. But the three countries should remind each other of the mutual benefits of the agreement, even as it is now. In less than five years since it was implemented, North American trade has soared 47 percent, supporting nine million jobs.

More broadly, with the restoration of good faith between governments, Canada can help create a new strategic framework for North America, including the supply of critical minerals, defence of the Arctic, and shared approaches to another economic frontier, outer space.

As Canada navigates the economic uncertainty posed by U.S. tariff policies, this sort of strategic and proactive approach is essential. The deeply integrated Canada-U.S. trade relationship is built on mutual dependence, with Canada providing critical resources, energy, and industrial goods that bolster American economic and national security interests. While tariffs present immediate challenges, they also reinforce the need for Canada to leverage its economic strengths in trade negotiations, diversify its global partnerships, and invest in long-term industrial resilience.

By emphasizing its indispensable role in energy, agriculture, and critical minerals, Canada can position itself not only as a key U.S. trade partner but also as a leader in global markets. Expanding infrastructure, fostering innovation, and securing stable investment environments will be crucial for sustaining growth. While protectionist policies may shape near-term trade dynamics, Canada’s ability to adapt and strengthen its competitive advantages will determine its long-term economic success in an evolving global landscape.

RBC Thought Leadership has launched a multi-month campaign with The Hub The focus of this month’s series is tariffs, trade, and opportunities for Canada in this new economic order. Be sure to check out the kick-off DeepDive.

Held every year in Houston, CERAWeek is the world’s biggest energy conference, attracting 10,000 executives, policymakers, investors, scientists and technologists from around the world. If you want to know what’s hot—or not—in energy, it’s a good place to be.

Attending CERAWeek every year is a great way to gauge the energy industry’s mood.

U.S. Energy Secterary Chris Wright’s American Energy Dominance speech set the conference’s tone.

Energy executives and policymakers worried about sourcing the capital need to fund the U.S.’s energy ambitions

More risk capital will be needed to build the pipelines and grids to power an AI economy.

The biggest question on climate action remained unanswered: will Trump kill the Inflation Reduction Act?

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A few years ago, the hot topic at CERA was local grids for EV charging. Last year, renewables and clean tech were so much in vogue that the Biden Administration sent loan officers to sign up companies for its bonanza of climate action incentives. This year, the dominant theme was more—as in, how can the world produce more of every kind of energy, in particular natural gas and nuclear.

As a few people joked, Make Energy Great Again (MEGA).

Houston is hometown to all things energy—known for oil and rocket fuel, and over the past decade, the giant liquefied natural gas terminals that dot the nearby Gulf of, umm, Amexico? But as bullish as the CERA crowd was, especially when two of U.S. President Donald Trump’s key cabinet secretaries spoke, the storm clouds of creating all that energy were not far from view. The darkest one: the trade war.

As the conference kicked off, with a rousing American Dominance speech from Energy Secretary Chris Wright, global markets started tanking—amid fears of a recession that would deplete demand, especially for oil and gas. If America is going to achieve “energy dominance,” it will need to regain the confidence of capital—and renew some confidence in policy, which continues to be as unpredictable as those storm clouds over Houston.

The CERAWeek event left me with these questions:

1. Oilpatch, archipelago: an ocean of energy or a chain of islands?

The world will need more energy, but it may be deeply challenged to distribute that energy as countries and continents build artificial walls. Shell CEO Wael Sawan presented the company’s three energy security scenarios for the decade ahead: a “horizon” scenario that’s largely business as usual; a “surge” scenario that incorporates a maximalist view of economic growth and AI demands; and a third scenario, called the Archipelagos, that’s the most worrisome, and the one increasingly likely. In an archipelago world, we will see a surge in demand—but supplies locked into regions by nationalist and protectionist policies that will turn the global energy market into a chain of islands. This new energy world will be more demanding and less efficient.

With a growing threat of energy nationalism, many import-dependent nations are scrambling for optionality. Japanese and Korean delegates said in private conversations they’re looking for multiple sources of natural gas, as they’re not sure they can count on North America. And they’re more willing to consider longer-term contracts. The scramble has some of the majors returning to frontier oil markets—Iraq, Libya, Suriname, Brazil—and adding to LNG production in South Asia and Africa.

Perhaps the biggest challenge in that world of islands: capital. Global oilfields are in decline—sometimes by 5% a year—and the vast majority of capital is going to maintaining rather than expanding them. Moreover, a consistent message from Big Oil is the intention to return more of that capital to shareholders, rather than invest in growth. As one executive put it, the sustainability mantra of “people and planet” needs to add “profitability,” for investors to put up the trillions needed.

2. Compute this: will AI break the system, or fix it?

A sign of the times: 42 sessions at CERAWeek had “data center” in their title. And it was hard to find a conversation that did not include the term “hyperscaler” — the Big Tech companies like Google and Amazon whose AI-feeding data centres are all the rage. In just a few years, data centres have become such as big drain on global energy that their collective consumption is on par with the economy of Japan. One of Florida’s biggest energy providers, NextEra, is projecting 55% growth in demand over the next 20 years, compared to 9% over the last 20 — and a third of that growth will come from AI.

Small wonder the CEO of Chevron said he’s sending executives to MIT, for courses on AI.

The hyperscalers showed up in force, hosting must-attend Texas BBQ parties and showcasing their avatars, agents and robots for a conference full of bemused oilmen and women. In fact, the relationship between AI and energy is now so intertwined that the two worlds are teaming up to drive energy efficiency from well to wheel. Google says its chips are 60% more energy efficient. Large electricity providers said AI-calculated efficiencies could unlock 100 gigawatts of power. But there was general agreement that both sectors will need a lot more gas-powered electricity to run those data centres. In 2024, U.S. data centres relied on gas for 43% of their power, while nuclear provided close to 20% and coal accounted for slightly less. The hope for renewables remains important but marginal—so much so, several of the hyperscalers have abandoned their pledges for carbon-neutral energy in their data centres.

3. A new P3 model: Pricing, pipelines and permitting?

The determining factors of America’s energy ambitions will be pricing, pipelines and permitting—and key to attracting all that investment for growth. The hyper-scalers may have to pay more to cross-subsidize other sectors and households, and their need for electricity and power. Last year alone, U.S. electricity prices soared 20%, while overall demand grew only 2%. One utilities veteran said a new business model, and mindset, may be needed for the two worlds to coexists. Techies live and die by a 10x philosophy—the growth mindset that success can be multiplied through innovation and scale. Utilities, on the other hand, live by a 10% philosophy—a regulated mindset that suggests such a rate of return is all society will bear over the long term.

More risk capital will be needed to build the pipelines and grids to power an AI economy. But risk capital doesn’t thrive in a regulated, and litigated, arena. One case study that was presented: the Constitution pipeline to get natural gas from Pennsylvania to the Northeast and brain centres like Boston and New York. The company faced so many legal challenges that it cancelled the project in 2020. The current U.S. administration is now looking to revive it.

Permitting reform will be critical to any chance for energy dominance—and it will require a supermajority in Congress, something not many politicos expect in a deeply divided D.C.. Get ready for “Drill, Baby, Drill” to run up against “Sue, Baby, Sue.” Mark Christie, chair of the Federal Energy Regulatory Commission, and a constitutional law expert, told the conference that FERC writes every decision now with the full expectation its approval will end up in court. The result, he said, is less energy than America needs, and a looming “rendezvous with reality.”

4. LNG: Is this the new global power play?

Natural gas accounts for around 25% of global energy—and this year, 50% of the CERAWeek agenda. In a world that will need a lot more power, the Houston consensus was for a lot more gas, especially to be cooled, liquefied and shipped as LNG. Ryan Lance, CEO of ConocoPhillips, thinks LNG demand could double in the next decade. It’s already done that in the U.S., largely through a massive tech revolution in gas that helped to massively increase production while cutting rigs, from 1,600 to 100.

The forecasts for LNG growth are impressive. Shell expects global LNG demand to shoot up more than 50% by 2040, as manufacturers in China and other Asian economies accelerate their switch from coal-to-gas to support their economic growth, while lowering emissions. India alone will need to double LNG imports to meet its rising demand by 2030.

But one of the overlooked needs is concessional finance for all the infrastructure needed to take LNG off ships and convert it to gas. Western countries have until recently been opposed to allowing multilateral development banks to help finance such infrastructure — as it may add to global emissions. The upcoming G7 summit in Alberta may put that back on the table.

5. A nuclear spring: But in which decade?

Nuclear energy is enjoying a renaissance, and it’s not restricted to North America. China is expected to build 5 gigawatts of nuclear power this year. Bangladesh and Türkiye are both expecting to open their first reactors in 2025, with Egypt not far behind. Abu Dhabi now has four nuclear plants, with plans for more. All told, nuclear accounts for about 10% of the world’s energy mix. But just to maintain that share, the world needs to triple production by 2050 —and that means adding 50 gigawatts of capacity every year for the next 20 years. Bear in mind the best year on record was in the 1980s, at 31 gigawatts.

Some new models are needed. Several speakers spoke of a need to narrow the range of nuclear technologies being pursued, in order to help aggregate demand for the technologies as well as skills and supply chains attached to them. Too many projects remain first of a kind. More reactors may also need to be built both on existing sites, as well as decommissioned coal facilities, to take advantage of existing infrastructure, cool water and local support. And critically, governments and nuclear developers need to commit to long lead cycles, typically up to 15 years. That’s usually difficult for investors, other than pension funds and sovereign wealth funds, which suggests new financing models may be needed, too.

6. Critical minerals: When will we realize they really are critical?

A range of strategically-important minerals have been called “critical minerals” since World War 2, when Canada stopped shipping nickel to Japan and the U.S. helped blockade Greenland, fearing the Nazi occupation of Denmark would claim the Arctic region’s minerals to add to its military machinery. We’re back to a mindset of criticality—if it’s not too late—and energy supplies depend on it. All those data centres and electricity lines require copper and nickel, and more exotic minerals. To meet the world’s energy expectations, we will need to mine as much copper in the next 20 years as the world has mined in the last 20 centuries. Unfortunately, China has a stranglehold on production and processing. One startling fact: China now has 60 mineral smelters; the U.S., two. Most U.S. copper, as a result, is shipped to China, as concentrate, and returned as wire and other products.

The West is 30 years behind China, and it will take decades more to catch up. For one, a mine takes up to 20 years to find and another 10 to develop. Local resistance to mines and smelters will also need to be overcome. As is the case for energy, new financing models will be needed for these long-term projects. The Trump Administration has proposed a sovereign wealth fund, harnessing rents on the massive tracts of land and oceans the federal government owns. It is also using the ExIm Bank, its main export financing arm, to support critical minerals projects. Canada is exploring similar options through Export Development Canada. If the West were to take a wartime mentality to the challenge, governments might start to allocate production and restrict materials for strategic needs. Whether the U.S., Canada and others could also accept more accommodating labour and environmental standards is another question altogether.

7. Supply chains: can we actually make the stuff we need?

You can have the right policies and right projects and even the right timing—and still get it wrong if supply chains are not with you. Across the energy sector, that perhaps remains the biggest near-term concern. One mining executive said giant rock washers now take seven years to be delivered. One electricity executive said he’s waiting for a delivery of gas turbines, which are scheduled to come in 2030. Moreover, the cost is up three-fold since before the pandemic. Smaller stuff can be just as hard to get, such as enriched uranium and graphite for nuclear plants. Governments may need to start to allocate resource production, including material supplies, manufacturing capacity, and logistical support, to ensure resilience of critical industries.

Skilled labour is equally in short supply, in part because so few gas projects have been built over the past five years—and in part because of the boom in LNG construction. A nuclear energy executive said he doesn’t need more PhDs (although he’s happy to hire them), as much as he needs community college graduates who can take on sophisticated welding and pipefitting jobs. Even Larry Fink, the CEO of BlackRock, the giant Wall Street investment firm, focused his CERA comments on the growing labour market crisis. His blunt message, which he said he also shared with President Trump: “We’re going to run out of electricians.”

8. Climate: will it dominate again?

From the opening session, climate action was on the backfoot, if mentioned at all. Energy Secretary Chris Wright set the tone with the opening keynote, saying emissions were a function of economic growth, and the world wants more growth. “Everything in life involves trade-offs. Everything!” he stressed. It was more than rhetorical. The return of natural gas to the forefront was seen to move its status from transition source to base-load source of energy. In other words, it’s here for the long run, as evidenced by North Carolina’s recent plans to add 5 gigawatts of gas power. Even coal got some positive mentions, as perhaps a necessary fuel for the AI boom.

The biggest question on climate action remained unanswered: will Trump kill the Inflation Reduction Act? Several big oil and gas executives argued in favour of Joe Biden’s signature act, saying they had developed and capitalized a host of decarbonization investments that helped drive their energy efficiency and profitability. Vicki Hollub, CEO of Occidental Petroleum, advocated for the continuation of tax credits that help fund her company’s direct air capture projects—a key reason it bought B.C.-based Carbon Engineering in 2023. Oxy is also trying to advance its work with enhanced oil recovery, by capturing carbon from the air, liquefying it and pumping it back into old reservoirs, to push oil to the surface. Many environmentalists look askance at EOR, as it’s known, arguing it’s more or less a shell game that trades carbon for carbon. But the fact that EOR is back, at least for some, as a net-zero strategy, signals how much has changed in one year.

John Stackhouse is Senior Vice-President to the Office of the CEO at RBC, and head of RBC Thought Leadership.

Follow him on LinkedIn here.