European Union officials are expected to vote on draft legislation that would label Canadian fuel as more polluting than oil from other parts of the world
The Canadian province of Alberta has vast oil sand reserves
Oil extracted from "oil sands" is regarded by some as energy intensive and environmentally damaging.
The vote comes as native groups are suing the provincial and federal governments for breaching a treaty designed to preserve their way of life.
Officials are set to vote on the matter on 23 February.
The proposal from the EU's executive would include oil sands - also known as tar sands - in a ranking designed to inform buyers about the most carbon-intensive options.
The oil industry has argued the proposed legislation could create an unreasonable administrative burden.
Canada has some of the largest oil sand reserves in the world and its extraction is making the country and its people wealthy.
But for the people of the Beaver Lake Cree Nation it comes at a cost: their traditional way of life. The Beaver Lake Cree people live in the largest boreal forest in the world, in the province of Alberta.
"It's got to the point where we have to be very cautious about the animals we are taking from the land because it is not uncommon for us to pull a fish out of the lake that has cancers on it," said Crystal Lameman, a member of the community.
"It's not uncommon to kill a moose and go clean it and see that there are pus bubbles under its skin."
Many of their traditional hunting grounds have now been deforested, so they have launched a legal case against the federal and provincial governments for the breach of a treaty which they say guarantees their traditional way of life.
"When you have the development of oil sand deposits, there are vast landscapes that go on for miles that are barren and a lot of big lakes of toxic water that have been used in the process of extracting the oil," said Jack Woodward, the lawyer representing them.
"So what's happening is that the landscape that was used and loved by these people is being transformed into a terrible toxic wilderness."
Crystal Lameman says that because these resources on which her people depended have gone, many now have no choice but to work for the oil sands industry.
"We are unable to go to the land to hunt and forage to pick out berries, to seek out the medicines that are natural to us because of this industry. Therefore we have, not by choice, become economic hostages," she said.
The oil sands industry acknowledges that there have been problems. But improved extraction techniques will mean less environmental damage, according to Drew Zieglgansberger, who is a senior vice President of Cenovus Energy, which is one of the companies involved.
"Just in the last decade alone, we have invested hundreds of millions of dollars into a number of technologies and into research and development," he told BBC News.
"The benefit of that is not only can that bring the energy the world needs and a great economic outcome, but at the same time, by having this investment, the stories that are out there are only going to improve."
Mr Zieglgansberger also said that the industry has provided jobs and a good income for many indigenous people.
But Crystal Lameman says that her traditional ways of living with the land guarantee the future of her children far more than jobs from companies that - in her view - will be gone once they have finished extracting oil.
"If the government and industry think that throwing money at us is going to make this better, I choose life and my children's lives and I choose health over money," she said.