On Premier Danielle Smith’s orders, Alberta officials are hatching plans to shield the province from Ottawa as much as from Donald Trump and his tariffs.
They’re looking at creating a public body that would buy all private oil and gas intended for export to the U.S.
That would inoculate Alberta petroleum products against a federal export tax, because one Canadian government can’t tax another.
“It’s ridiculous that we have to worry so much about Liberal Ottawa in a situation like this, but it’s the way things are,” said one official.
Smith hotly opposes an export tax. She asked her officials for ways to block it.
The Albertans fear that if there’s a tariff-free “carve-out” for the sector next week, Ottawa is very likely to introduce an export levy.
Ottawa, not the U.S., would get the cash. The tax would amount to a domestic tariff on an industry the Liberals plan to wind down anyway.
What Trudeau government wouldn’t love that idea?
It’s no idle fear, either.
The Liberals have inflicted this tax twice in the past, both times by another Trudeau, with typically chaotic results.
The idea then, and certainly now, would be to extract cash from oil and gas producing provinces to shore up Ontario and Quebec in a time of economic trouble; in this case, losses due to tariffs.
This goal was signalled on a smaller scale in an earlier Sovereignty Act motion. The plan for a full marketing authority may proceed in spring, whether or not the feds impose the tax.
Export taxation worries the Albertans far more than the wild talk about banning energy exports to the U.S.
The ban is a non-starter for two reasons. It’s technically impractical, and it wouldn’t produce any money for Ottawa.
Because of the tightly integrated pipeline system, cutting shipments to the U.S. would also deprive Ontario and Quebec of oil and natural gas.
The government source says: “The politicians down there, including the Liberals, often don’t have a clue about how the pipeline system functions.”
Ontario Premier Doug Ford has talked about implementing a ban as a last-resort retaliation against the U.S.
Federal Foreign Affairs Minister Melanie Joly says the idea is on the table.
This is an idle threat meant to alarm the Americans, although it clearly does not.
An export tax, on the other hand, would be a bonanza worth billions for Ottawa.
It’s likely that Trump won’t exempt oil and gas next week, even though tariffs will hurt U.S. consumers and refiners.
But that doesn’t mean Ottawa will stop seeing Alberta as a revenue source in this conflict.
Ontario’s auto industry could be plunged into crisis. The massive, Liberal-supported campaign to produce batteries and EVs will be at risk of collapse.
Ford talks about needing billions to cover the economic losses to Ontarians.
He met with key federal minister Dominic LeBlanc on Tuesday, on the eve of Wednesday’s premiers’ meeting.
“I think the world of him,” Ford gushed.
LeBlanc said: “We will support Canadian industries and workers in the face of these tariffs.”
They plan to spend their way through this. But the Liberals also understand that their massive deficits are now a big problem, both economically and politically.
They’re on the hunt for cash.
Smith should proceed with the provincial marketing plan to make sure history doesn’t repeat itself.
Former prime minister Pierre Trudeau imposed an export tax on oil in 1973.
International prices had risen sharply. The tax money was used to subsidize the purchase of foreign oil for the eastern provinces.
As I’ve outlined here before, this tax was lifted in 1976.
But the first Trudeau imposed it again in 1980 as part of the National Energy Program.
That tax lasted until then-prime minister Brian Mulroney’s PC government abolished it in 1985.
Now, Smith wants to ensure that this tax never comes back for a third round.
Don Braid’s column appears regularly in the Herald