Relief in Alberta oilpatch as Trump tariffs fail to materialize ... for now
U.S. media reports tariffs will not be imposed right away
After weeks of concern, confusion, calls for unity and subsequent dissent, Canada received some clarity on freshly sworn-in U.S. President Donald Trump's threats to enact widespread tariffs on Canadian imports on his first day in office.
On Monday morning, Reuters confirmed a Wall Street Journal report that stated Trump would issue a broad trade memo on Monday. It would stop short of imposing new tariffs on Trump's first day in office.
Rather, it would direct federal agencies to evaluate the U.S. trade relationship with China, Canada and Mexico, according to Reuters, citing an incoming Trump administration official.
Trump had previously threatened a 25 per cent tariff on Canadian goods, and the Canadian government had threatened retaliation in response.
Alberta found itself square in the national headlines as inauguration day approached, for its chief export — energy is Canada's largest export to the U.S., worth about $125 billion last year — and for its premier's response to Canada's plans to retaliate.
Alberta Premier Danielle Smith, who recently met with the president-elect, is in Washington, D.C., for the inauguration, as is a large Alberta contingent of government and industry officials. In recent days, Smith had rejected the idea of retaliating against Trump via energy export taxes or bans.
Speaking on CBC News Network on Monday, Smith said she spoke with Trump about the situation during a recent visit to his Mar-a-Lago residence.
"What I asked the president was, 'Do you want to buy more oil and gas from Canada?' And he said yes. I think that is a common ground to start from," she said.
She added she was pleased to see that Canada has been given a reprieve from the tariffs for now.
"I think that it's a demonstration that the president recognizes that it's a complicated and delicate relationship between Canada, because there's so much cross-border flow of goods. And we have a real opportunity to show how the Americans benefit from that trade relationship," she said.
Smith was not scheduled to attend the inauguration in person as the event was moved indoors due to cold temperatures.
Smith is scheduled to take part in the Canadian embassy's inauguration day event later on Monday afternoon and will attend the Republican Governors' Association evening reception.
Oilpatch cautious but relieved
Gurpreet Lail, president and CEO of Enserva, an association representing oilfield service companies, is in Washington for the inauguration.
She said there's relief in the industry that promised tariffs have failed to immediately materialize, but added Canada still needs to focus on what its strategy is going to be.
"How do we actually work together to strengthen Canadian infrastructure and strengthen our strategy? We can't be on defence all the time," Lail said.
"We need to be on offence, and to be on offence means we have to get to new markets and we need to create more jobs. We need to bring investment back into our own country."
Mark Scholz, president and CEO of the Canadian Association of Energy Contractors, is also in Washington.
"I think this is a relationship that we have to really work at. We have to continue to promote the mutual benefits that trade provides the two countries. And we're not going to take that for granted," he said.
Tariff threat raised concerns in Alberta
Though several factors could change the situation, a prior analysis by University of Calgary economics professor Trevor Tombe suggested a 25 per cent, across-the-board tariff by the U.S. could shrink Canada's economy by two to three per cent, and Alberta would be the province most exposed "by a wide margin."
Carlo Dade, director of trade with the Calgary-based Canada West Foundation, said tariffs were still on the way, in his opinion, adding it was just a question of when.
"There are four or five different iterations of tariff policy, and they obviously couldn't come to a decision on Day 1. So they kick the can down the road a bit. And that's not unexpected," Dade said from Washington.
Oil industry groups like the Canadian Association of Petroleum Producers (CAPP) were also on the ground at the inauguration. Last week, CAPP was one of five major Canadian energy industry groups that released a statement announcing they had formed a joint working group to combat the threats of tariffs.
Speaking to CBC News Network on Monday, Smith was asked about Ontario Premier Doug Ford stating his view that "[you] protect your jurisdiction but country comes first."
"I would tell you that I would never go out publicly and say that we should stop selling car parts as a way to make a point to Americans and hurt Ontario. Or stop selling aluminum in a way to hurt Quebec," she said. "It hurt me that they felt they could make that argument that Alberta should sacrifice our interests in order to try and advance some kind of trade war.
"I take a different approach. Let's stop fighting with each other and let's maybe try to remove some of the internal trade barriers and maybe my fellow premiers can stop blocking pipelines when we propose them."
Canada's agriculture industry was also bracing for the potential of punishing tariffs. Last year, Alberta's agriculture exports to the United States were worth $8.9 billion.
"It has the potential to really be devastating for our industry in Canada," Keith Gregory, chair of the Alberta Cattle Feeders' Association, told CBC News last week.
ABOUT THE AUTHOR
With files from Kyle Bakx, Lily Dupuis and Reuters