TORONTO -- As Barack Obama swears the oath of office at his second inauguration Jan. 21, the Canadian government and its people are looking for leadership from the president on two pressing, albeit contradictory, issues -- oil and the environment -- highlighting the tug of war between public opinion and government policy in this country.

Aside from the biggest elephant in Congress -- reaching agreement on spending cuts and the debt ceiling to avoid plunging the U.S. into a second recession that could envelop Canada -- energy and environmental policy rank among the most significant U.S. issues for Canadians.

Central to the debate is Alberta’s crude-rich oil patch, which is said to be both critical to Canada’s economic growth over the next 30 years and one of the dirtiest sources of energy in the world.

Prime Minister Stephen Harper’s government is keen to see the White House greenlight TransCanada’s controversial Keystone XL pipeline that would carry more than half a million barrels of heavy crude a day from Alberta’s carbon-intensive oil sands to refineries in the U.S. Gulf Coast.

The most imperative issue for Canadian energy producers is access to global markets, and Keystone is so integral that it needs to be addressed early in Obama’s second term, says Greg Stringham, vice-president of the Canadian Association of Petroleum Producers.

“Getting that approved some time this year will be important to keeping it near to its schedule,” Stringham said, “and that’s what we need to have the availability to be able to move into that market.”

Harper has called the pipeline’s approval “a complete no-brainer,” given the U.S. desire for North American energy independence and its lust for oil. But he has also been clear that Canada is looking to expand oil exports beyond just the U.S. to oil-hungry Asia, where demand for oil sands crude is soaring.

A decision on Keystone, which requires approval from the U.S. State Department because it crosses an international border, could come as early as March or April, according to recent reports. Obama has already rejected the project once, forcing the Calgary-based company to revise the pipeline’s route through Nebraska to avoid ecologically sensitive areas in the hopes of placating some of the project’s most fervent opposition.

During the 2012 election, both Obama and Republican rival Mitt Romney championed U.S. energy self-sufficiency, but only Romney singled out Keystone as a crucial part of that plan. The issue is so divisive that Lisa Jackson, head of the U.S. Environmental Protection Agency, resigned earlier this month, reportedly in protest against apparent plans to approve the $7-billion project -- though a Capitol Hill source denied that the Keystone project played any role in Jackson's departure.

But the Harper government and the oil industry have lobbied hard for the pipeline expansion, and Obama has stressed the need to reduce the U.S. reliance on overseas oil. Canada’s oil sands could be a big part of the solution.

Still, it’s no easy solution. If Keystone is approved, Obama -- having touted a “clean energy economy” -- risks losing support from key environmentalists who have rallied against what would be the largest oil pipeline outside Russia and China, countries not exactly praised for their environmental track records.

The pending Keystone decision comes at a time when Canadians are captivated by the grassroots Idle No More movement, led by First Nations groups calling for “indigenous sovereignty which protects the land and water” and “to protect Mother Earth.”

This activism has put a renewed focus on environmental issues such as climate change and green energy, says Adam Scott, climate and energy program manager at Toronto-based Environmental Defence.

“We’ve seen a number of attacks on environmental protections in Canada, and it sounds like there’s a large group of people out there finally saying no to that,” Scott said.

Many Canadians -- including Harper, who has indicated that his climate change policy will follow the U.S. example -- are looking to Obama to lead the charge. And the president has already hinted that addressing climate change is on his second-term agenda.

For the six in 10 Canadians who, according to a recent Ipsos Reid poll, do not believe Harper is doing a good job protecting Canada’s environment, a renewed focus on environmental stewardship from the Obama administration would likely be viewed as long overdue.

The events of 2012, now officially the hottest year on record -- from droughts in the U.S. to superstorm Sandy -- have sent American concern for the environment close to the level reported by Canadians, Scott says.

“It’s becoming more clear this is the No. 1 issue,” he said.

Scott, who believes Obama will reject Keystone to show that he is serious about the environment, is optimistic that the president will crack down on greenhouse-gas emissions, forcing Canada to develop its own clean energy strategy.

“Canada’s oil-only policy isn’t going to fly anymore,” he said. “Canada’s going to have to move into the new economy and start thinking about energy efficiency and renewable energy and clean energy.”

But Don Abelson, director of the Canada-U.S. Institute at Western University in London, Ontario, says there is room to strike a balance between energy and environmental imperatives. Energy independence, including through Keystone, can be achieved in an environmentally responsible way, according to Abelson.

He believes that approval of Keystone, which would appease congressional Republicans, could actually give Obama leverage in pushing at least some of his environmental agenda through.

Obama’s decision on Keystone will be among the first and most significant steps indicating his direction on an environmental policy that could change the North American economy.

For now, however, most Canadians are focused on more immediate economic concerns.

If there is no agreement in the U.S. on raising its debt ceiling or mitigating the impact of slated severe spending cuts, U.S. demand for Canadian exports could dry up. That would mean a severe hit to economic growth and Canadian jobs at a time of slowing domestic demand from debt-burdened consumers and a cooling housing market. A second recession in Canada would be possible.

Foreign Affairs Minister John Baird’s office believes there is great opportunity ahead to expand the North American economy.

“We will continue to engage constructively with the Obama administration as we look to create more jobs, hope and opportunity in our two great nations,” press secretary Rick Roth said.

But, Abelson notes that even top government officials can do little more than urge the president and U.S. lawmakers to put aside their partisan differences and move ahead with crucial issues that will affect the Canadian economy.

“We have to do our best to advance our concerns and to suggest areas of co-operation, but in the end we are the outsiders looking in,” he said.

“[Canadians] would like to see President Obama work very closely with Congress, with the Republican House and the Democratic Senate, to try and set aside partisan interests and achieve a plan that is going to be good not only for the United States but for its continental neighbors and for the global economy.”

This article is part of a series produced by The Huffington Post that closely examines the most pressing challenges facing President Obama in his second term. To read other posts in the series, click here.

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  • GUN CONTROL

    Contrary to some people's beliefs, Canada is not gun free. There are nearly 10 million privately owned firearms -- 1.1. million of them handguns -- in this country of 34 million, making <a href="http://www.gunpolicy.org/firearms/region/canada">Canadians the 13th most heavily armed people in the world</a>. But for years now, Canada has grappled with the problem of firearms being moved across the U.S. border and into the hands of Canadian street gangs. Police Chief Bill Blair of Toronto recently told a radio show that <a href="http://twitter.com/metromorning/status/288624961248182273">70 percent of guns used in crimes in the city</a> came from the United States. Many Canadians point the finger at lax gun laws in the U.S. and at their champions, the gun lobby. In the wake of the Sandy Hook massacre, U.S. politicians have renewed a long-running debate about gun control, particularly a return to the assault weapons ban that expired during the George W. Bush era. A series of public shootings last summer in Toronto focused Canadians on the same issue. But with a government in place that has shown little appetite for gun control -- Prime Minister Stephen Harper is busily dismantling the country's long-gun registry and recently allowed gun exports to Colombia, one of the world's most violent countries -- Canadians are looking to the U.S. to see which way the Obama administration will go on this issue, and hoping the president's actions will finally slow the illegal flow of guns into Canada. (TEXT: Daniel Tencer PHOTO: Daniel White of Estes Park, Colo., waves a placard at a pro-gun rally as the Colorado Legislature opened its general session across the street in the State Capitol in Denver on Wednesday, Jan. 9, 2013. AP Photo/David Zalubowski)

  • AFGHANISTAN

    Canada didn't go into Iraq with the United States, but it did go into Afghanistan as part of the military mission launched after the 9/11 attacks in 2001. Canadian troops have been there ever since, holding down the brutally violent Kandahar region until 2011. Since the start of the mission, 158 Canadian soldiers have died in Afghanistan, making it the deadliest military conflict for the country since the Korean war. Canada withdrew the main part of its combat forces in 2011 but has left behind about 950 training personnel, who are working with other NATO forces to build an Afghan army ahead of the scheduled withdrawal of foreign troops in 2014. The country <a href="http://www.huffingtonpost.ca/2011/11/03/analysis-lets-be-clear-canada-still-at-war-in-afghanistan_n_1073327.html">is playing the second-largest role in this effort</a>, after the U.S., and may be called on to do even more if European allies, under economic pressure at home, continue to withdraw. With the end in Afghanistan finally, truly, in sight, Canada is looking to the <a href="http://www.huffingtonpost.com/2013/01/08/afghanistan-withdrawal-complete-pullout_n_2434740.html">Obama administration to ensure a smooth transition to the Afghan military</a> -- which will hopefully actually exist come 2014. All eyes are on Obama to ensure that the U.S. and its allies don't find themselves bogged down, once again, in a conflict that has now been running for more than 11 years. (TEXT: Daniel Tencer Photo: A U.S. Army soldier on patrol near Baraki Barak base in Logar Province, on October 13, 2012. MUNIR UZ ZAMAN/AFP/GettyImages)

  • MARIJUANA

    While a <a href="http://www.huffingtonpost.ca/2012/11/21/canada-marijuana-laws-decriminalization_n_2170399.html">majority of Canadians favor the legalization or decriminalization of marijuana</a> (though <a href="http://www.huffingtonpost.ca/2011/11/26/marijuana-laws-legalization-canada-stephen-harper_n_1114388.html">their government disagrees</a>), the <a href="http://www.huffingtonpost.com/news/drug-war/">U.S. war on drugs</a> continues to make it next to impossible for Canada to change its pot laws. In 2003, then-Prime Minister <a href="http://www.cbc.ca/news/story/2003/04/29/marijuana_chretien030429.html">Jean Chrétien announced that his government intended to decriminalize possession of small amounts of marijuana</a>. Those <a href="http://www.cbc.ca/news/story/2003/05/02/us_pot_rxn030502.html">plans were shelved after the U.S. expressed its displeasure</a>. The implied threat was clear: Change the law, and movement across the border will come to a screeching halt. But now that <a href="http://www.huffingtonpost.com/2012/11/06/amendment-64-passes-in-co_n_2079899.html">several states have decriminalized or legalized</a> marijuana, the argument that a change in Canada's drug laws would pose a threat to the U.S. is becoming increasingly dubious. Many Canadians believe it's time for a change, and proponents look to Obama to lead the charge to reform America's drugs laws. At the very least, they want Obama to signal that states and neighbors are free to pass their own marijuana legislation without interference from Washington. (TEXT: Michael Bolen PHOTO: Rachel Schaefer of Denver smokes marijuana on the official opening night of Club 64, a marijuana-specific social club, where a New Year's Eve party was held, in Denver, Monday Dec. 31, 2012. AP Photo/Brennan Linsley)

  • GAY MARRIAGE

    When Canada legalized gay marriage in 2005, the country became a destination for gay Americans wishing to wed. But that image of Canada as a haven for same-sex matrimony took a hit this year, when it emerged that a technicality in Canada's law made it impossible for gay people who live in the U.S. to get divorced in Canada, because their marriages were not recognized in their home country. Though it never showed much enthusiasm for same-sex marriage, Canada's Conservative government moved quickly to allow same-sex divorce for foreigners married in Canada. Yet the situation highlighted the difficulties between Canada's progressive stance on gay marriage and the reluctance of many U.S. states to move in the same direction. Three more U.S. states -- Maine, Maryland and Washington -- approved same-sex marriage in last fall's election, and it seems that, bit by bit, the U.S. is moving in the same direction as Canada on the issue. But though many Canadians take pride in their country's being on the forefront of this sea change in society, most would likely be happier if the two countries simply had the same definition of marriage. With President <a href="http://www.huffingtonpost.com/2012/05/09/obama-gay-marriage_n_1503245.html">Obama's endorsement of same-sex marriage</a> last year, the odds of this happening have increased considerably. (TEXT: Daniel Tencer PHOTO: Brendon K. Taga, left, and Jesse Pageat, the second couple to receive a same-sex marriage license in Washington state, pose at the King County Recorder's Office on December 6, 2012 in Seattle, Washington. David Ryder/Getty Images)

  • In 2009, U.S. Homeland Security Secretary <a href="http://www.cbc.ca/news/world/story/2009/04/21/napolitano-border-canada021.html">Janet Napolitano outraged Canadians by suggesting the 9/11 hijackers</a> entered the United States via Canada. Though she later backtracked (the hijackers did not cross the Canadian border), Napolitano has continued to suggest that Canada is less secure than the United States and should be treated more like Mexico. The news, reported in 2011, that <a href="http://www.huffingtonpost.ca/2011/09/29/canadian-border-fence_n_986606.html">America is considering building security fences along its northern border<a> only served to inflame Canadian tempers. And while <a href="http://www.huffingtonpost.ca/2011/12/07/beyond-the-border-perimeter-security-canada_n_1134463.html">a new border pact framework</a> should go a long way toward resolving American concerns about Canada's security, some of the provisions in the deal have raised alarm bells, including <a href="http://www.cbc.ca/news/canada/story/2012/07/10/cross-border-policing-integration-sovereignty.html">cross-border policing</a>, <a href="http://www.huffingtonpost.ca/2012/12/13/canada-us-border-deal_n_2294478.html">data sharing with third parties</a> and the <a href="http://www.huffingtonpost.ca/2012/10/11/beyond-the-border-xl-foods-beef-recall_n_1956100.html">streamlining of meat inspections.</a> (TEXT: Michael Bolen.. PHOTO: AP/The Canadian Press, Mark Spowart)

  • ISRAEL AND IRAN

    As one of America's closest allies, Canada often finds it difficult to plot its own course on foreign policy. Canadian leaders tend to follow the president's lead, and risk backlash when they stray. Take the example of Israel. Late last year,Canada was among the handful of nations that sided with America and Israel by <a href="http://www.huffingtonpost.ca/2012/11/29/canada-john-baird-palestine-un-vote-speech-statehood_n_2213802.html">voting against granting Palestine non-member observer status</a> at the UN. <a href="http://www.jpost.com/NationalNews/Article.aspx?id=270291">This despite a recent poll for the BBC that found 59 percent of Canadians believe Israel is having a negative effect on world affairs</a>. <a href="http://www.cbc.ca/news/politics/story/2012/09/07/pol-baird-canada-iran-embassy.html">Canada has even suspended diplomatic relations with Israel's greatest enemy<a>, closing its embassy in Iran last September. That move followed a <a href="http://www.thestar.com/news/world/article/1202617--canada-s-move-to-expel-syrian-diplomats-expected-to-have-little-impact">break with Syria</a>, another of Israel's rivals, in May. Canada has long been seen as a moderating influence on world affairs, the sort of country that might act as an intermediary in negotiations or a backchannel for sensitive information. But the ongoing tension between Israel and Iran, and the pressure to toe America's line on the conflict, now put that reputation at risk. Most Canadians respect Israel's right to exist and recognize that Iran's nuclear program poses a threat to world peace. But the longer the crisis drags on, and the threat of war persists, the more likely it will be that Canadians demand a break from American policy. When the U.S. invaded Iraq in 2003, <a href="http://en.wikipedia.org/wiki/Canada_and_the_Iraq_War">Canada declined to participate</a>. If President Obama fails to avoid war with Iran, history may repeat itself. (TEXT: Michael Bolen PHOTO: Iranian navy personnel celebrate after successfully launching a Ghader missile from the Jask port area on the shores of the Gulf of Oman during a drill, Tuesday, Jan. 1, 2013. AP Photo/Jamejam Online, Azin Haghighi)