Canada on Keystone: Okay, we'll sell our oil to China then

The statement went on to say that Prime Minister Harper “…expressed his profound disappointment with the news. He indicated to President Obama that he hoped that this project would continue given the significant contribution it would make to jobs and economic growth both in Canada and the United States of America.”

But crucially, the statement also said that the prime minister reiterated to President Obama that Canada will continue to work to diversify its energy exports.

In fact, in a sign of warming relations, Harper is scheduled to make a high-profile trip to China in February. Canada is proposing to build a pipeline of its own through western Canada that would make oil exports to China faster and cheaper.