The choice President Obama has faced in recent weeks – whether to approve the Keystone XL pipeline – has been framed as a choice between losing the support of environmentalists or alienating America's key ally, Canada. Here's a better approach: President Obama should use the Keystone XL pipeline issue to send a message to Canada that its environmental policies are damaging to both Canada and the world.

The Keystone pipeline feels like a reward for Canada's worst practices. Last year was perhaps the nadir of Canada's dwindling track record on environmental issues. Not only has Stephen Harper's government amended the Coastal Trade Act to explicitly encourage oil companies to drill for oil in the Gulf of St Lawrence – the world's largest estuary and home to a unique ecosystem that would likely be damaged by the process – but the $160m cuts to environmental spending in last year's budget decimated the projects set up to monitor and mitigate against the damage caused by tar sand refining and drilling. For example, one victim of the federal cuts is oil spill response units, which means that drilling and pipeline projects will become even riskier. For the Keystone XL project to go ahead under these circumstances looks to be courting disaster.

Canadian oil industry advocates argue that the Keystone XL pipeline, the proposed $7bn pipeline that would run nearly 2,000 miles from Canada's oil sands to the Gulf of Mexico, is crucial for Canada, where oil is a key factor in Canada's economic growth. But criticism has come not just from environmental activists, but those concerned about the safety of the pipeline, especially in light of government cuts to the bodies that would regulate it.

In his resignation this month, outgoing Commissioner of the Environment Scott Vaughan pointed to, amongst other "gaps" in Canada's environmental policies, a concerning lack of preparedness in the face of an offshore oil spill. Yet it is unlikely that Harper will pay attention, which is why it's important that President Obama does.

Harper is the man who derailed the Kyoto Protocol, dismissing it as a "socialist scheme". In his years of minority-government rule through the 2000s, Harper pushed both Albertan tar sand projects and Arctic drilling, landing Canada last in a World Wildlife Fund ranking for G8 countries in tackling climate change. Since gaining a majority government in 2011, his increased power has given him a stronger hand in a relatively strong Canadian economy to push oil interests and cut support for climate research.

Earlier this month, Obama, through America's ambassador to Canada, encouraged the country to do more to tackle climate change. America "lecturing" Canada on the environment is hard to stomach, given the profligate environmental damage enacted in the US, particularly under the Bush administration. But Obama, at least, had the high ground of being largely on track to meet his 2020 climate goals. The Keystone XL pipeline would only set both countries back and put them further at risk.

Canadians are concerned about the environment and support action on climate change, but the narrative generated by the government sets environmental concerns against economic ones, sidelining the necessity of addressing the issue and ignoring the fact that the economic costs of climate change will be high for Canada.

It has been argued that, if America does not go ahead with the Keystone XL pipeline, the pipeline will instead be a deal between Canada and China, as Harper went to Beijing to expound the benefits of Canadian oil the last time Obama rejected the pipeline deal. However, rightly or wrongly, America remains a strong influence on Canada, and in this case a high-profile and public rejection of the scheme, combined with a criticism of Canada's environmental policies, may be the wake-up call Harper needs.

It's worth bearing in mind that oil companies still operate with little check for the damage they cause. On Wednesday, the American Justice Department reduced the maximum fine BP may face for the 2010 Gulf of Mexico disaster by $3.4bn a week before the trial is due to begin on what may well be one of the worst environmental disasters in history. Protesters against the Keystone XL pipeline have urged Obama to "keep his promise" to tackle climate change. Stephen Harper has also reiterated his commitment to tackling climate change – he has an opportunity now to turn over a new leaf.