OTTAWA — As Alberta Premier Danielle Smith worked rooms in Washington, D.C., on Monday morning, welcome news broke that President Donald Trump wouldn’t immediately slap a 25 per cent tariff on Canadian goods, a move that would have devastated Alberta’s oil and gas industry.
Smith said on social media that she was pleased by Trump’s decision to withhold tariffs on Canadian goods.
“We appreciate the implied acknowledgement that this is a complex and delicate issue with serious implications for American and Canadian workers, businesses and consumers given the integration of our markets along with our critical energy and security partnership,” said Smith.
Leaders in Alberta’s energy sector are breathing a sigh of relief for now, but stress now is no time to be complacent, with the threat of future tariffs still looming.
“It’s obviously good news that trade won’t be disrupted right away, but I hope nobody takes this to mean everything going to be fine,” said Tim McMillan, a Calgary-based partner at Garrison Strategy with more than a decade of experience in oil and gas.
McMillan says he hopes the narrowly averted crisis spurs long-stalled progress on getting Canadian products to non-U.S. markets.
“As fearful as it has been for our nation that our largest export is reliant on one customer, there hasn’t been much urgency to fix this,” said McMillan, pointing to the cancellation of Northern Gateway, Energy East and other key projects.
Heather Exner-Pirot, a Calgary-based energy researcher and special advisor to the Business Council of Canada, says she agrees.
“I’ve never seen more public understanding of the importance of export pipelines in my entire career,” said Exner-Pirot.
“If we can stop making Alberta oil and gas a wedge issue, the next federal government will have license to move forward on these projects.”
Trump will reportedly direct federal officials to look into persistent trade deficits with Canada, a major climbdown from his earlier threat to immediately impose a 25 per cent tariff upon taking office. Officials will also reexamine U.S. trade relations with Mexico and China.
Trump said tariffs were coming in his inauguration speech on Monday.
“Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens,” said Trump.
Trump revealed last week that he’d be setting up a new federal agency, called the External Revenue Service, to collect tariffs and other fees from foreign nations.
The U.S. was the primary destination for roughly 97 per cent of Canadian crude oil exports in 2023, the most recent year for which data is available.
McMillan said the recent expansion of the Trans Mountain pipeline won’t do nearly enough to reduce Canada’s dependency on the U.S. as a buyer of its oil and gas products.
“(Expanding Trans Mountain) was the bare minimum,” said McMillan. “It gives us a little leverage, but almost nothing.”
He also said that Monday’s news was a vindication of Smith’s strategy of making the case for Canadian energy directly to Americans.
“I think Albertans are very pleased that the premier was proactive,” said McMillan. “There’s a strong argument to be made for the value of Canadian energy to American consumers, and she’s done a good job of making it.”
Smith has done a dozen U.S. television interviews since Trump threatened to slap new tariffs on Canada, according to her office. Several of these appearances have been on outlets that cater to right-leaning viewers, such as Fox News and Fox Business.
Her message appears to be getting at least some traction south of the border.
An Angus Reid poll released last week found that Americans oppose Trump’s tariff against Canada by a two-to-one margin. This includes half of Trump voters, when they’re made aware that the tariff could drive up the price of gasoline by 30 to 70 cents per gallon.
National Post
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