As Trump renews tariff threat, Alberta Premier Danielle Smith calls for diplomacy, not retaliation
Smith says Canada has 'short window' to defend against Trump's tariff threat
As U.S. President Donald Trump renews his tariff threat on Canadian products, Alberta Premier Danielle Smith says diplomacy, not retaliation, is the best way for the country to stifle the risk of punishing new trade sanctions.
In a virtual news conference with reporters on Tuesday, Smith, who is holding a week-long series of meetings in Washington, D.C., said Canada must seize the opportunity to stave off or minimize tariffs before Trump imposes them.
"We have a short window, I think, to demonstrate the very positive relationship that Canada and the U.S. have from a tariff-free point of view and why it should remain tariff-free."
She called on Canadian politicians to keep private any talk of retaliation.
The reprieve comes as Trump did not follow through on his promise to impose the tariffs on his first day in office.
As Trump signed a stack of executive orders Monday, the returning president suggested his administration would move ahead with 25 per cent tariffs on Canadian and Mexican imports by Feb. 1.
Trump told reporters the sweeping tariffs were necessary due to "vast numbers" of illegal immigrants and fentanyl coming into the U.S. from north and south of the American border, describing Canada as a "very bad abuser."
The punishing tariffs would be imposed on everything imported from Canada. In return, the Canadian government has pledged to impose retaliatory tariffs of its own on U.S. goods entering Canada, such as oranges and rum.
Trump announced a plan to study alleged unfair trade practices and signed an executive order directing that the study be completed by April 1.
'Drill, baby, drill'
In his inauguration address Monday, Trump said the U.S. will "drill, baby, drill," to expand its domestic supply of oil and gas and attempt to drive down prices.
"We will be a rich nation again," Trump said. "And it is that liquid gold under our feet that will help to do it."
Smith said she sees those remarks as an opportunity for Canadian oil and gas products, rather than a threat. She told reporters the U.S. needs Canada's help to become a major exporter of oil products.
"The only way they can do that with their significant energy demand needs at home is to have a reliable partner to be able to backfill for them," Smith said. "That's us."
Premier urges companies to build pipelines
Smith said with a pipeline-friendly administration in Washington, now is the time for energy companies to build, before Trump's four-year-term elapses "in a flash." She pointed to the failed Keystone XL pipeline expansion project, which was to run from Alberta to Nebraska.
Subsequent U.S. governments rejected, then approved, then rescinded the permit for the pipeline to cross the international border.
"All of the pipeline companies are dusting off proposals," Smith said. "And I think there's a few interesting ones that could be moved on very, very quickly."
The Alberta government lost $1.3 billion after buying a stake in Keystone XL and offering loan guarantees to help the project proceed.
South Bow, a spinoff of the TC Energy corporation that proposed to build both Keystone XL and the Energy East Pipeline to New Brunswick, said in a statement the Keystone project was "permanently cancelled" in 2021.
Spokesperson Solomiya Lyaskovska said in the statement South Bow appreciates Trump's support for increasing crude oil supply to the U.S.
"South Bow is engaging with customers to develop options that utilize our existing infrastructure and corridor to enhance energy security by increasing Canadian crude oil supplies to meet growing U.S. demand," the statement said in response to questions about new pipeline construction plans.
Smith has also called to revive the Northern Gateway pipeline, an Enbridge project, that was to run from north of Edmonton to Kitimat, B.C. The project was halted in 2016 when the Federal Court of Appeal ruled proponents failed to adequately consult with First Nations on the pipeline's proposed route.
In a statement, an Enbridge spokesperson said the company has no plans to build Northern Gateway.
"Our current effort is focused on leveraging our pipeline in the ground and our existing rights of way," spokesperson Jesse Semko wrote. "There's lots of capacity there that is efficient and less disruptive to communities and the environment."
Uncertain future for Canadian oil exports
Charles St-Arnaud, chief economist for Credit Union Alberta Central, heard possible barriers, not opportunities for Canadian oil in Trump's comments.
St-Arnaud says the "drill, baby, drill" comments signal that the U.S, will produce as much of its oil and gas domestically as it can. The U.S. refineries designed to upgrade heavy crude from the oilsands could be converted to handle different raw materials within a few years, if they were motivated, he said.
"If anything comes out of the recent political uncertainty, the recent trade uncertainty, it's clear that Canada needs to diversify its export market for almost everything we produce," he said.
Provincial figures show 90 per cent of Alberta exports went to the U.S. in 2023, worth more than $115 billion U.S.
Furthermore, Canadian oil companies have invested more revenue into shareholder dividends in recent years than building facilities, St-Arnaud said. One driver is an anticipated decrease in the global demand for oil in the next 10-to-20 years, he said.
'A different approach'
Smith spent inauguration day in Washington, in what is expected to be the final leg of an American trip. She and other Canadian leaders have banded together to campaign against the sweeping sanctions and Smith has taken a hands-on approach, meeting with government leaders and Trump himself.
The premier's "Alberta First" approach to tackling the sanctions has been criticized by other Canadian premiers and Prime Minister Justin Trudeau as undermining a united front.
Last week, she refused to sign a federal joint statement last week, supported by every other Canadian premier, that included retaliatory tariffs or oil or withholding oil from the U.S. as potential strategies.
During a news conference Tuesday, Trudeau said his government's focus is still on avoiding the penalties — but if that effort doesn't succeed, Canada will respond in kind and that "everything is on the table" in Canada's response to any pending tariffs, including dollar-for-dollar tariffs on U.S. exports.
"Our response will be robust and rapid and measured, but very strong. The goal will be to get those tariffs off as quickly as possible," Trudeau said.
In a statement, Conservative Party Leader Pierre Poilievre also said the country must consider retaliatory tariffs, should the U.S. impose them on Canada. Poilievre called for the government to reconvene Parliament to debate these measures.
WATCH | Danielle Smith calls for diplomacy as the best defence:
Alberta NDP Leader Naheed Nenshi said Smith's attention has been misplaced. He said she should be co-ordinating with industry leaders to learn what support they would need to ride out the tariffs. He said she should be advocating for potential aid from the federal government.
Instead, Nenshi said, Smith is posting pictures of herself with American politicians with no tangible results to show.
"We need more than a selfie queen at parties and balls right now," he said.