Alberta Premier Rachel Notley said the mandated 8.7 percent cuts, some 325,000 barrels per day (bpd), are needed to draw down near-record volumes of crude in storage in Western Canada and bring relief to sagging Canadian crude prices.
The steep discount has stripped billions of dollars from the Canadian economy by some estimates, and at one point Canadian oil was selling for more than $50 less than USA oil traded on futures markets.
"We must act immediately, and we must do it together", she said in a speech Sunday at the Federal Building. Her party faces a tough challenge from the United Conservative Party, led by Jason Kenney, a former Cabinet Minister with the federal Conservatives. That boosted Canadian crude prices and shares of major producers, but has had negative effects elsewhere.
"We request that Energy Market Access and the Economic Impacts of the Price Differential be added as an agenda item for discussion this week".
"We would hope that producers outside of Alberta would understand that they would need to be part of the solution in saving jobs".
Notley announced the province will impose across-the-board cuts amounting to 8.7 per cent of output to reduce a growing glut of oil that is forcing Alberta oil to sell at steep discounts compared with the North American benchmark.
"The price gap is caused by the federal government's decades-long inability to build pipelines".
The Railroad Commission of Texas did something similar in the 1930s, before OPEC was created, because large oil producers at the time were anxious that independent drillers were over-supplying the market.
"If we used the similar type of ratios I think you'd end up with very little production being suspended or curtailed in Saskatchewan, and it would just be harmful to more of the municipalities and communities in the province". Further, roughly 60 per cent of the oil produced in Saskatchewan is a range of light and medium oil.
Crescent Point Energy, meanwhile, has less exposure to the regional oil price issues in Canada since it doesn't produce the deeply discounted heavy oil found in Alberta.
Speaking to reporters in Regina, he added, "We have consulted closely with industry and we continue to".
The meeting will also include Indigenous leaders.
Still, MacNaughton says he has reached out to his counterpart Kelly Craft to emphasize the cuts are only temporary and that Canada does not feel they violate existing free-trade rules.
He says he wants to make sure Craft is informed on the issue.
"The real trade vulnerability would be if curtailment led to lower shipments to the USA because then that would be actionable" under current trade terms, Sands said in an interview.
Industry feelings prior to the announcement had been mixed.
He also said he believes the move will prevent job losses. Larger producers will see their first 10,000 barrels exempted each day. The two can ship a combined 1.79 million barrels of oil and other liquids daily.
Most of that would come from producers that don't even produce the heavy oil affected by the differentials in question.
Husky Energy does a lot of business in Saskatchewan's oil industry as well as Alberta's.