Canada’s Extraction Industry Reshapes Global Trade: Investor Response Across the Europe, Asia & the U.S.
An exclusive interview between Christopher P. Skroupa, Skytop Editor-in-Chief and Freddie Pletcher, Partner, Borden Ladner & Gervais / September 24, 2026
Freddie Pletcher, Partner of Borden Ladner & Gervais and Christopher Skroupa explore Canada’s repositioning in global trade, particularly in the extraction industry, and evaluate how U.S., European, and Asian investors are responding to shifting geopolitical and economic dynamics.
Christopher: Has Canada’s recalibration of trade priorities—particularly its pivot toward Europe and Asia—reshaped foreign investor sentiment in the extraction industry?
Freddie: There certainly has been a demonstrable recalibration of Canadian trade since the current administration came into office. However, it has not been as much of a sea change as has been portrayed in the media. The United States remains Canada’s largest import and export partner, although trade levels have declined somewhat. Total imports into Canada from the U.S. have decreased by $4.33B (-2%) and total exports from Canada to the U.S. have decreased by $5.52B (-1.6%) this year compared to the same period in 2024. While U.S. trade has decreased, Canada’s other top trading partners have seen an increase in imports and exports compared to last year. On the import front, China is leading the way with an increase of $3.62B (+7%), followed by Mexico with $1.98B (+7%), and South Korea with $588M (+6%). In terms of exports, the United Kingdom is leading the way with an increase of $9.11B (+63%), followed by China with $1.67B (+10%), and the Netherlands with $1.04B (+26%).
Christopher: What has this meant for investment in Canada’s extractive sector?
Freddie: More than 100 extractive projects, valued at $107 billion, are at various stages of development in Canada over the next ten years. Unlocking the potential of these strategic assets in an increasingly fragmented world would certainly assist the U.S. drive to counter Chinese dominance in the sector. With Chinese capital constrained by stricter Canadian federal investment rules, particularly in the critical minerals space, American capital would have appeared to have been the natural solution to help develop Canada’s resources, given the two countries’ geo-strategic alignment. However, recent bilateral trade tensions with the U.S., have led Canadian policymakers to advocate diversifying capital sources to derisk projects.
While Canada remains keen to partner with American counterparts on extractive sector development, it has taken measures in recent months to place some guardrails over its assets in a world that’s become more transactional and unpredictable. In March 2025, the federal Innovation, Science and Industry Ministry, responsible for Canada’s investment review, expanded the criteria for national security review to include economic security, in a move seen as directed at the United States. And in April 2025, the Government of Ontario introduced new measures “to prevent foreign governments or corporations from claiming Ontario’s critical minerals.” Furthermore, on August 26, 2025, Canada entered into a joint declaration of intent with Germany on critical minerals, to build stronger and more reliable global supply chains.
Christopher: What trends are you observing in the types of U.S., European, or Asian investors entering Canadian resource deals—are these largely strategic buyers, financial sponsors, or sovereign players?
Freddie: Canadian resource M&A activity in 2025 has been driven driven by high precious metals prices and the demand for critical minerals for the clean energy transition, though uncertainty from tariffs has slightly softened overall deal numbers. In keeping with global trends and trends in other industries, however, deal values have increased, with companies using creative structures to manage risk. The energy sector also was a major driver of M&A value in H1 2025.
The bulk of the investors have been strategics, led by investments from the UK and South Africa in the critical minerals space and from the US in the metals royalties space. There also have been several material consolidation transactions between Canadian players in the oil & gas and precious metals sectors, as well as Canadian acquisitions of pipeline and precious metals assets from US companies.
Financial sponsors have played a lesser role in Canadian resource deals in 2025, with only one material precious metals transaction driven by financial sponsors.
Sovereign participation in Canadian resource M&A, particularly from China, had been in decline for a few years, as these transactions came under strict federal government scrutiny on security concerns—coming to a head in 2022 when Ottawa ordered three Chinese entities to divest from three Canadian mining companies. The move largely froze Chinese interest in Canada’s resource sector, although we have been involved in a couple of resource transactions in 2025 with Chinese state-owned enterprises, perhaps reflecting the potential for a slight thaw in Sino-Canadian relations while US-Canadian relations are adversely impacted by US tariff policy.
Christopher: To what extent do you see global investors leveraging Canadian extraction M&A as a hedge against U.S. protectionism or instability in other commodities jurisdictions?
Freddie: Certainly, the boom in precious metals prices and Canadian precious metals M&A transactions has been spurred on by exogenous factors to the industry – increased central bank demand, a weaker US dollar, U.S. tariffs creating global trade uncertainty, geopolitical tensions, nationalization in some African jurisdictions, and the Fed’s guidance on future interest rates. However, base metals and iron ore aren’t seen as a similar hedge, given that U.S. copper, aluminum and steel tariffs apply to Canadian production. Similarly oil & gas also aren’t viewed as a hedge, given that the uncertainty surrounding U.S. trade policy and OPEC’s decision to increase crude oil supply in April 2025 has weighed on crude oil demand throughout 2025.
Christopher: How are ESG considerations influencing valuation differentials or deal structures when engaging international acquirers of Canadian extractive assets?
Freddie: While ESG has certainly become a dirty acronym in the United States under the current administration, the global market for ESG assets continues to mature and is on track to surpass $40 trillion by 2030 – over 25% of all projected assets under management (AUM). European investors are set to remain the leaders in the ESG space with an estimated $18 trillion of projected AUM in 2030, preserving their current 45% share of global ESG investments. Accordingly, ESG considerations remain prominent in transactions with non-US investors.
Empirical studies suggest that firms with strong ESG performance command higher M&A bid premiums, and this is reinforced by our deal-level observations of the increasing scrutiny on ESG matters in M&A due diligence and heightened ESG reporting requirements for acquirors by lenders and financial sponsors.
Although we are not observing M&A targets spinning-out problematic ESG assets from ESG-friendly assets to the extent to the same extent as we witnessed in 2021, there is a growing emphasis in the Canadian market on ensuring community support (and particularly First Nations support) for transactions.
Christopher: Are you seeing more outbound deal interest—Canadian firms investing abroad—or is inbound capital still dominant, particularly in critical minerals and clean energy inputs?
Freddie: The current climate of global economic uncertainty, driven by the United States’ imposition of tariffs against the bulk of its trading partners, has led many potential purchasers of Canadian businesses to adopt a cautious stance, delaying investments and expansion plans. So far in 2025 we have seen declines in the volume of inbound deals into Canada, while acquisitions of companies outside of Canada by Canadian companies have increased – particularly in the precious and critical minerals sectors, as well as in the pipeline sector.
A significant share of recent inbound foreign direct investment into Canada has been focused on investments in sustainable energy projects and on developing end-to-end EV supply chains. Arguably, foreign investment inflows into these activities would have been significantly smaller were it not for promised and actual Canadian government financial support.