Petroleum Refining

• Motor gasoline
• Diesel fuel
• Jet fuel
• Petrochemical feedstocks
• Asphalt
• Lubricants

1. 1

   Invest in refinery modernization to process heavier Canadian crude grades

2. 2

   Develop biofuel co-processing capabilities to meet clean fuel standard mandates

3. 3

   Pursue petrochemical integration to diversify revenue from fuels-only production

4. 4

   Explore west-to-east crude pipeline options to reduce import dependence

5. 5

   Build strategic refined product reserves for supply disruption resilience

Refined petroleum products trade duty-free under CUSMA, but competitive dynamics with US Gulf Coast refineries determine market access. Canadian refineries in eastern Canada paradoxically import foreign crude while western Canadian crude is exported to US refineries, reflecting pipeline infrastructure limitations. Carbon pricing asymmetries between Canadian and US jurisdictions create cost competitiveness concerns for Canadian refiners.

Eastern Canadian refineries in New Brunswick, Quebec, and Ontario depend on imported crude transported by tanker, creating maritime supply chain risk. The lack of west-to-east pipeline capacity means Canadian refineries cannot access lower-cost domestic crude. Refinery maintenance cycles and unplanned outages in concentrated facilities create regional fuel supply disruptions.

Canadian refineries operate at smaller scale than US Gulf Coast mega-refineries, resulting in higher per-unit costs. Atlantic Canada refineries (Irving Oil) compete directly with US eastern seaboard refiners. Western Canadian refineries (primarily in Alberta) have feedstock cost advantages but face logistical challenges reaching export markets.