Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

The Honourable Joe Oliver, Canada's Minister of Natural Resources answers questions from the media following an speech he made to the Toronto Region Board of Trade on March 22, 2013.

Deborah Baic/The Globe and Mail

Canada's Natural Resources Minister is raising the prospect of a trade fight with the European Union over its proposal to label oil-sands crude as dirty even as both sides try to seal a major deal to liberalize two-way.

In Brussels on Wednesday, Natural Resources Minister Joe Oliver said Ottawa would consider launching a complaint with the World Trade Organization, the global referee for commercial disputes, if the EU proceeds with a fuel-quality directive that singles out crude from Canada's oil sands as the most harmful to the planet's climate.

The directive would effectively slap an import tax on oil-sands crude because refiners who use it would face extra costs. EU refiners are required to cut carbon content in fuels by 6 per cent or pay a penalty.

Story continues below advertisement

Ottawa fears the directive would hurt Canada's ability to open new markets for its oil and depress prices for North American crude.

"This fuel-quality directive is discriminatory towards Canadian oil and not supported by scientific facts," Mr. Oliver said.

A spokesman for International Trade Minister Ed Fast said that Ottawa believes Canada's campaign for better treatment for the oil sands will not affect trade talks with Brussels.

"Both are being treated as completely separate matters and are being pursued as such," said Adam Taylor, director of communications for Mr. Fast.

Trade experts say the basis for Canada to challenge the fuel directive at the World Trade Organization would be that WTO members are prohibited from discriminating against "like goods" from other countries. Ottawa would probably argue that the EU is breaking trade rules by taking steps to discourage imports of oil-sands crude while not taking the same action against petroleum from conventional wells.

"Fuel is fuel. It's same product with the same properties and same end uses. Under the WTO agreement, like products cannot be treated differently," said international trade lawyer Lawrence Herman of Cassels Brock & Blackwell LLP.

The legal battle at the WTO would be whether oil-sands crude and conventional crude are "like goods" under the trade rules.

Story continues below advertisement

" The basic rule in trade law is that if something at the end of the day is the same product, but is made with a different process, you aren't allowed to treat it differently," Mr. Herman said.

"We may not like certain products that are made with low-wage labour in developing countries. But we can't tax those products differently because we don't like the labour laws in Bangladesh if a shirt from Bangladesh is the same as a shirt from India," Mr. Herman said.

The Prime Minister's Office rejected the notion that Mr. Oliver is rowing in the opposite direction by raising the possibility of taking the EU to the WTO over the EU fuel measure, while Canadian negotiators are trying seal a trade deal with Brussels.

PMO communications director Andrew MacDougall said Canada has to stand up for itself when challenged, even as it works to expand trade in all sectors. "They're not incompatible" aims, he said.

The directive would rank oil-sands petroleum as a more polluting source of fuel than oil from conventional wells even though studies have shown bitumen production is only slightly more greenhouse-gas intensive than some types of crude already used in Europe.

All of the world's oil-sands reserves are in northern Alberta and Saskatchewan. The energy-intensive process required to extract this crude has made it a prime target for environmentalists.

Story continues below advertisement

The fuel directive may be headed for a vote by EU environment ministers this fall.

Mr. Oliver said he is still hoping to persuade Brussels to rewrite it.

However, if the European Union enacts the directive without changes, the minister said, "we could have recourse to the WTO and we will consider that."

The WTO adjudicates disputes between its members, which include the EU states and Canada.

If Canada were to win a fight at the WTO – and the European Union refused to relent – the trade referee could grant Ottawa the authority to retaliate by slapping punitive tariffs on European imports.

A spokeswoman for the EU's delegation to Canada said she could not comment Wednesday about Mr. Oliver's remarks.

Story continues below advertisement

The clash strikes a discordant note during intense efforts to clinch a mutual trade agreement before Europe's attention shifts to talks for a similar pact with the United States.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies