Incoming American president Donald Trump has threatened “economic force” against Canada, crippling 25 per cent tariffs on all imports, and has repeatedly said that the country should be the 51st state. In response to Trump’s threats to devastate Canada, the Liberals have essentially replied: Don’t worry, we’ve got this.
When asked on CTV’s Question period Sunday if Ottawa would “cut off supplies of energy” to the United States to counter the tariff threat, Foreign Affairs Minister Mélanie Joly refused to dismiss the idea. “What I can tell you is everything is on the table,” she said to host Vassy Kapelos. The minister then went at length to explain why restricting oil and gas exports is an option, raising the need for “strength and unity” because the entire economy is at risk.
In other words, to protect jobs in Quebec, Alberta must be sacrificed. The more things change …
It is for the good of the country, apparently, that the one province that Justin Trudeau’s government has, since 2015, repeatedly singled out for made in Canada “economic force,” should be the one to bear the brunt of a trade war with the Americans.
Writing on social media, Norman Spector, who served as Brian Mulroney’s chief of staff, summed up the consequences of the Liberal approach: “(T)herein lies the seeds of our country breaking apart if (Trudeau) tries once again to play wedge politics against Alberta as he’s been doing since coming to office.”
Alberta Premier Danielle Smith warned Monday that turning off the taps to the U.S. would, indeed, spark a “national unity crisis.” Predictably, left-wing pundits accused her of using a “threat” to “undermine” the Liberals. In fact, she is merely pointing out the inevitable.
If Trump’s across the board 25 per cent tariffs come into force, that could, according to one estimate, lead to 52,000 fewer jobs being created in Alberta alone next year.
Presumably, under this scenario only oil and gas producers that could reduce their costs or afford to operate at a loss for an extended period would survive.
But the industry would survive.
How many would be out of work, and what would happen to the industry, if exports to the U.S. were reduced or cut off altogether?
The oil price collapse in 2014, followed by Trudeau’s election and subsequent targeting of the energy industry, precipitated a unity crisis of its own, on a scale not seen since the 1980s. If Ottawa cuts exports to the U.S., a “national unity crisis” would be an understatement of what would follow.
Anyone accusing Smith of making a “threat” is ignoring the reality that an Alberta-shaped earthquake might be the preferred outcome of the Liberal government.
Smith made the unity comments from a hotel in Florida, having visited Mar-a-Lago and meeting briefly with Trump over the weekend. “We had a friendly and constructive conversation during which I emphasized the mutual importance of the U.S.-Canadian energy relationship,” Smith wrote in a statement.
In the absence of a useful federal response to the looming tariff threat, Canadian premiers, in particular, Ontario’s Doug Ford and Smith, have taken it upon themselves to advocate for Canada.
The Liberals see this as an opportunity to score political points.
In a display of the “strength and unity” that the government supposedly believes in, Immigration Minister, and Trudeau groomsman, Marc Miller implied Smith was putting Canada up for a sale by going to Florida. Another Liberal MP straight up called her a “sellout,” and TruAnon dupes on social media have taken to calling her a “traitor.”
It is the Liberals who have effectively shut down the government in the middle of what could be the largest economic crisis in decades, but sure, Smith advocating for oil exports is the problem.
Perhaps it would be defensible, if wrongheaded, to restrict exports if the Trudeau Liberals hadn’t spent the last decade ensuring the oil and gas sector could not diversify its customer base. The cancelling of the Northern Gateway pipeline, the delay of TransMountain, the regulatory changes that led to the cancellation of Energy East, the ruinous, and unconstitutional, impact assessment regime and the coming emissions cap, have all ensured the Canadian energy industry is unequipped to adapt to the realities of a second Trump administration.
There is also something perverse in responding to tariffs, aimed at ensuring fewer Canadian exports to U.S., by exporting even less, essentially giving the Americans what they want. It is likely true that of all Canada’s exports, energy is the one that Trump probably values the most, but, notably, oil and gas hasn’t, so far, been exempt from tariff threats.
Putting tariffs on American goods that Canadians import is an obvious, and less destructive, option for retaliating against Trump, but is likely to affect the Americans only minimally, given the vast difference in the size of the two economies.
Despite what Trump says, trade between two countries is mutually beneficial and cannot be equated with one country subsidizing the other. Being dragged into a trade war is like entering a contest to see who can punch themselves the hardest.
But whether or not Canada brings tariffs against the U.S., restricting energy exports would punish Alberta, not the Americans, the most. Anyone who has watched how the Trudeau Liberals have treated the province would say that perhaps that is the point.
National Post