Canada’s energy sector remains a central pillar of its economy, contributing about 9.8% of nominal Gross Domestic Product (GDP) in 2024. In 2024, Canada exported C$208.2 billion in energy to 132 countries, with the United States receiving 89% of that volume. Over the same period, Canada imported C$56.1 billion worth of energy.
This trade profile underscores Canada’s deep ties with global energy markets: while traditional oil and gas remain dominant, the energy mix also includes significant cross-border electricity flows. For example, in 2024 Canada exported 35.7 TWh of electricity to the U.S., valued at C$3.1 billion, while importing 20.9 TWh, worth C$1.2 billion.
Let’s break down what energy stocks are and if they’re a good choice for Canadian investors.
Related: List of stocks in the TSX energy sector
What are energy stocks?
Energy stocks are those companies involved in the production, processing, and sale of energy products, such as fossil fuels (natural gas, crude oil, refined petroleum products) and renewable sources of energy (wind, hydro, solar). Also included are companies that produce energy machinery and equipment, and those that provide support services like logistics and staffing.
As a commodity, the price of energy is elastic, meaning that it is heavily influenced by supply and demand, which can be cyclical. As a result, energy companies have a higher beta, a measure of volatility compared to the overall market. Other risks to note include political/regulatory risk for mining sites and geological/environmental risks from operations.
Top energy stocks in Canada
Here are some of the top Canadian energy stocks on the Toronto Stock Exchange (TSX):
| Company | Description |
| Enbridge Inc. (TSX:ENB) | Enbridge is a midstream oil & gas company with a pipeline and utility network comprising oil sands and natural gas operations. |
| Canadian Natural Resources (TSX:CNQ) | Canadian Natural Resources is one the largest oil and natural gas producers in Western Canada. |
| TC Energy (TSX:TRP) | TC Energy is an energy infrastructure company with pipeline and power generation assets across Canada, the U.S., and Mexico. |
Enbridge Inc.
Enbridge (TSX:ENB) transports hydrocarbon assets throughout Canada and the U.S. via an extensive network of pipelines, including the Canadian Mainline system, regional oil sands pipelines, and natural gas pipelines. In addition, Enbridge owns and operates regulated natural gas utilities and distribution networks, along with a small renewable energy portfolio that manages offshore and onshore wind, solar, and geothermal projects.
In 2025, Enbridge reported record Q3 adjusted EBITDA, driven largely by U.S. gas utilities and organic growth in its gas transmission business. Management expects to finish the year in the upper half of its $19.4–$20 billion EBITDA guidance, with distributable cash flow per share landing near the midpoint of $5.50–$5.90. The company added $3 billion in secured growth capital during the quarter, supporting its 5% long-term growth outlook while keeping leverage within its 4.5–5x target range. Enbridge has raised its dividend for 30 consecutive years with a current dividend yield of 5.79%%.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) explores, develops, produces, and sells a variety of hydrocarbon products, including crude oil, natural gas, and natural gas liquids. Its crude oil lineup includes synthetic crude oil, light and medium crude oil, bitumen (thermal oil), primary heavy crude oil, and Pelican Lake heavy crude oil. The company’s assets include two crude oil pipelines and a 50% interest in a power co-generation plant located in Primrose, Alberta.
Canadian Natural Resources maintains one of the strongest reserves bases in the sector, with 13.9 billion BOE of proved reserves and 18.5 billion BOE of proved plus probable reserves. The company has also established itself as one of Canada’s most reliable income stocks. The company is designated a dividend knight, delivering 25 consecutive years of dividend increases. Its current yield of about 5% remains above its historical average, offering an attractive combination of income and growth potential for long-term investors.
What continues to set CNQ apart is the durability of its payouts, driven by long-life, low-decline assets and a balanced production mix that produces steady cash flow even in volatile commodity environments. Over the past three months, the stock has climbed nearly 16%, reflecting improving sentiment but still not fully pricing in the strength of its latest results. With a 15× trailing P/E ratio and consistent cash generation after several years of consolidation, CNQ stands out as a stable, low-cost operator — an appealing alternative for investors seeking dependable dividends and defensive performance at a time when growth-heavy sectors may experience more turbulence.
TC Energy
TC Energy (TSX:TRP) operates across five segments, including natural gas pipelines in Canada, the U.S., and Mexico, as well as liquids pipelines and power & storage. Its 93,300 km natural gas pipeline network and 535 billion cubic feet of regulated storage support reliable energy delivery across North America. The company also runs a 4,900 km liquids pipeline system linking Alberta crude to major U.S. refining hubs. Beyond pipelines, TC Energy holds stakes in seven power generation facilities producing 4,300 megawatts, along with 118 billion cubic feet of non-regulated gas storage in Alberta.
Beyond its large physical footprint, TC Energy has evolved into a compelling dividend-growth investment thanks to its highly contracted and regulated asset base, which generates predictable earnings and strong cash flow. The company has increased its dividend at a 7% CAGR since 2000 and now maintains a 25-year track record of consecutive dividend increases. It currently pays $0.85 per share quarterly, equal to a 4.4% yield, supported by ongoing secured capital projects, high asset utilization, and disciplined debt reduction.
With a market capitalization of $80.6 billion and shares recently trading around $76, TC Energy continues to strengthen its financial position and expand its infrastructure platform—positioning the company for future earnings growth and long-term shareholder value.
Investing in Canadian energy stocks
The Canadian energy sector is the second-largest constituent in the TSX after financial services. Currently, energy sector stocks account for 19% of the S&P/TSX 60 Index by market capitalization and many large-cap energy stocks account for the index’s top holdings. Globally, Canada is the world’s third-largest exporter of energy and top producer of natural gas.
Companies involved in the Canadian energy sector can be classified broadly as either:
- Upstream: Deal primarily with exploration and initial production of energy.
- Midstream: Deal primarily with transportation of energy.
- Downstream: Deal primarily with refining and distribution of energy.
Ancillary sub-industries in the energy sector include renewables and energy support equipment and services. However, “pure-play” energy sector companies are those that primarily deal with the exploration, production, transportation, refining, or distribution of energy.
Because the Canadian energy sector is affected by so many variables, investors should also assess the following external factors:
- How is worldwide inflation trending? Energy stocks tend to rally when inflation surges, which is what happened back in 2022.
- Have there been any conflicts involving countries that are critical importers/exporters of energy? The recent Russian invasion of Ukraine is a good example.
- Have commodity prices recently been subjected to supply and demand shocks? The current European energy crisis an example of this.
- Is there any pending or anticipated environmental legislation that could impact the sector, whether positively or negatively? The recent U.S. Inflation Reduction Act was a positive catalyst for renewable energy stocks.
RELATED: Top Canadian Utility Stocks
Are Canadian energy stocks right for you?
Investing in Canadian energy stocks is a bit higher risk than other industries, as they tend to be more volatile compared to the overall market. Because energy stocks form a substantial portion of the TSX already, investors should be aware to not over-weight them if they already hold Canadian index funds.
Energy stocks also tend to be a good defensive holding against high inflation. One of the main drivers of inflation is a rise in the price of energy commodities, especially crude oil and natural gas. When prices rise, companies that produce, process, and sell energy can earn stronger revenues, as the value of stored inventory on their balance sheets improves.
Overall, energy stocks can be a good investment as long as investors evaluate the external factors that affect them, as well as the investors’ personal financial situation and appetite for risk.