Tag: tariffs

Facing tariff threats, B.C. wants to work with Alberta to streamline regulations in the energy sector

This article was written by Emma Graney and was published in the Globe & Mail on February 27, 2025.

B.C. Energy Minister Adrian Dix sees the change of political direction in the U.S. under the Trump administration as an opportunity for B.C. to build out LNG exports and expand clean energy supply.

Alberta and British Columbia are working to reduce regulatory red tape between the two provinces’ energy sectors, as Canada looks down the barrel of 10-per-cent tariffs on oil and gas exports to the United States.

B.C. Energy Minister Adrian Dix says political differences between his NDP government and Alberta’s United Conservative Party mean little in the face of the looming tariffs promised by President Donald Trump. Those tariffs could come into effect as early as Tuesday when a reprieve is set to expire.

Mr. Dix told The Globe and Mail in an interview this week that he met his Alberta counterpart, Brian Jean, at the beginning of January to discuss how the two provinces could work together on a range of issues, including introducing common industry regulations and standards to help reduce administrative costs and maximize the value of natural resources.

“We’re not that far apart on a lot of things,” Mr. Dix said, adding that during Mr. Trump’s presidency, it’s crucial to reduce interprovincial barriers.

Mr. Dix pointed to Peace Country as an example.

The region straddles northeast B.C. and northwest Alberta, and is a large producer of natural gas. He said it’s illogical for both provinces to compete for business there.

“Having different regulatory systems, when that may not be required, may not make sense. So working together to be more competitive in these times, on enjoying projects and enjoying interest, that’s worth doing,” he said.

“So we’ve been talking very seriously about that with Alberta.”

Mr. Dix acknowledged that he and Mr. Jean don’t agree on everything. But he thinks gathering policy makers of different stripes together “to have a Team Canada approach” is a strength for the country.

“I think the public has an expectation in this time of crisis that we work together, and they’re correct to have that expectation,” he said.

“There are different views on some of these questions, obviously. But surely there are some things we agree on as well – efficient regulation, a fair return for the people of our respective provinces, good relationship with industry, addressing issues of climate change.”

Both provinces also want to bring their economies to net-zero greenhouse-gas emissions by 2050. While they are taking different paths – with Alberta far more focused on carbon capture and storage, given its massive oil industry – Mr. Dix said there is still a potential for collaboration.

B.C. has already scaled back some of its fiscal plans in the face of a potential trade war with the U.S.

In its Speech from the Throne last week, the government said it was reviewing programs and spending as it reorients to a new trade landscape.

“When someone says they want to make you the 51st state, I think you should listen to them,” Mr. Dix said.

“We have to respond to that, meaning we’ve got to defend ourselves and take action. We’ve got to drive economic development, and that means fewer impediments to that development.”

The Throne Speech promised a concerted effort to reduce the province’s reliance on the U.S. for trade, by seeking new trade opportunities abroad, breaking down interprovincial trade barriers and fast-tracking an array of resource projects for energy, critical minerals and electricity. The initial list includes Cedar LNG, a project under construction in Kitimat, which would have an annual export capacity of 3.3 million tonnes of LNG. It is aiming to start shipping to Asia in late 2028.

Also on the list are the Eskay Creek gold and silver project, expansions at Highland Valley Copper and Red Chris, the Mount Milligan mine for copper and gold, and the North Coast Transmission project, which would run along the existing route of the line between Prince George and Terrace.

Mr. Dix said the change of political direction in the U.S. under Mr. Trump is “a real opportunity” for B.C. to build out LNG exports to world markets and expand its clean energy supply. But it must make decisions on mining, energy and power infrastructure projects more quickly, he said.

Kwatuuma Cole Sayers, the executive director of Clean Energy BC, a renewables industry association, said the prioritization of resource development in the Throne Speech is a clear opportunity to reinforce clean energy as essential to the province’s economic future.

“We’re at a pivotal moment in B.C.,” Mr. Sayers said in an interview. “By ensuring a regulatory framework that is efficient, transparent and supports First Nations leadership and industry investment, we can build a stronger, more sustainable energy future.”

Indeed, the province is facing a power crunch in the face of explosive population growth and increasing demand because of the expansion and electrification of various industries.

The grid “needs more capacity and more transmission,” Mr. Dix said, and the province is focusing on renewable power projects that are Indigenous-owned to get there.

“To have this clean electricity capacity as a province is a huge advantage for us, but we’ve got to move on it.”

Canada has long relied on a stable alliance with the United States to help ensure its prosperity. In the face of unpredictability to the south, this series examines barriers within and economic opportunities beyond.

Ottawa should hit the U.S. with a carbon tax

This opinion was written by Hugo Cordeau and was published in the Globe & Mail on February 11, 2025.

Canada can’t win outright in a trade war, but it can cause enough pain that Trump decides the fight is not worth it


Barely a week after the United States paused tariffs against Canada, President Donald Trump is already talking about new duties on steel and aluminum. There is every likelihood that Canada is in for a bitter, drawn-out trade war. For that reason Canada must focus on honing our retaliatory measures.
Faced with the blanket 25-percent tariff threat from the United States last week, Ottawa announced retaliatory taxes on goods imported from the U.S., British Columbia and Ontario threatened to ban U.S. alcohol, and Ontario Premier Doug Ford planned to terminate a $100-million deal with internet provider Starlink, owned by Trump efficiency czar Elon Musk.


Many of these measures, such as the Starlink example, are somewhat targeted to exert maximum pressure on the White House. The federal retaliatory tariffs tried to focus on goods produced in Republican states.


But we can be even more more surgical and deliberate in our approach.
What we should do is strike where it hurts the most: Mr. Trump’s electoral base. If they feel the pain, he will listen. But we should also consider measures that hurt us the least and benefit us the most, that would do the most good for the world and that which would strike a raw nerve with Mr. Trump himself.
An innovative approach is to apply a carbon border adjustment to the U.S. – a trade measure in which countries with carbon taxes impose tariffs on those without.


The traditional rationale for such a measure is that domestic companies, by paying carbon taxes, have higher production costs than foreign ones that don’t. Domestic products are thus more expensive than imports. A carbon border adjustment raises the price of imports to reflect the carbon tax foreign companies won’t otherwise pay. This levels the playing field.
Canada, which has a carbon tax, does not have carbon border adjustments. But it has expressed interest, and the idea was brought up recently by Liberal leadership candidate Mark Carney.


Mr. Carney has mostly talked about a carbon border adjustment as a worthwhile measure on its own. That might be debatable. But when we’re facing a trade war, a carbon border adjustment is a retaliatory tactic that has no equal. Canada should pursue it with renewed focus.


Concretely, we should be applying a state-level carbon border adjustment based on grid carbon intensity – i.e. how clean or dirty a state’s electricity is. The U.S. has a relatively polluting grid at 368 grams of CO2 per kilowatt-hour (gCO2/kwh) – twice that of Canada and six times that of France. Red states such as Wyoming, West Virginia, Kentucky, Indiana, Missouri and Utah have even more carbon-intensive grids, with emissions ranging from 700 to 900 gCO2/kwh, largely owing to their reliance on coal.


In other words, under a carbon border adjustment, the same goods produced in a highly polluting red state grid would be taxed significantly more than those coming from greener grids, which are typically found in blue states.
In levelling the playing field for domestic companies that pay carbon taxes, a carbon border adjustment has a twofold effect: First, while it is inflationary, like all tariffs, the resulting price increase for Canadians can be mitigated by sourcing from greener states. Second, it would be focused on the red states even more than the tariffs that Ottawa has announced, which, despite being targeted, still involve broad product categories.


On a broader level, a carbon border adjustment is essentially a partial carbon tax on American companies. To avoid the tax, U.S. companies that want to export to Canada are incentivized to invest in low-carbon production methods or to produce goods in jurisdictions with stronger climate policies – or states with cleaner electricity. This is good for the planet.


And such a measure would be the perfect countermove against a “drill, baby, drill” President who wants to encourage more oil production and withdraw the United States from international climate co-operation. Mr. Trump would sit up and pay attention if Canada uses a carbon border adjustment as retaliation to tariffs. The irony of the situation would not be lost on the world that is watching.


This might aggravate Mr. Trump, but that also means a promise for U.S. exemptions can be a good bargaining chip. The measure aligns with what many observers say: Canada can’t win outright in a trade war, but it can cause enough pain that Mr. Trump decides the fight is not worth his while.
The even greater thing is that such a measure can go even further: a G7 collaboration.


The EU has already implemented a carbon border adjustment, and Britain is following suit; Canada has also expressed its desire to collaborate. As well, Canada is hosting the G7 this year and most G7 nations either have a carbon border adjustment or are considering one. One for all, all for one, as the Three Musketeers would say.

As Trump fires up resource nationalism, sector faces tough pivot away from U.S. markets

This article was written by Niall McGee, Emma Graney, Nicolas Van Praet, and Brent Jang, and was published in the Globe & Mail on February 7, 2025.

Some sectors within Canadian resources have wiggle room to pivot away from the U.S. relatively painlessly, and they are looking at doing so. But others are extremely vulnerable and essentially bracing for impact.


The threat of U.S. tariffs is firing up a brand of Canadian resource nationalism not seen in decades, inspiring a rallying call for this country to build more of its own energy, power and mining infrastructure. But executing on that plan will be no easy feat.


U.S. President Donald Trump earlier this week backed off from immediately imposing tariffs on Canadian imports, but the risk remains high that he’ll follow through after a 30-day reprieve runs out. Amid this threat, Canada’s resource sector, most of which would be subject to a 10-per-cent tariff, is looking at diversifying away from the United States to insulate itself from more shocks that lie ahead.


Prime Minister Justin Trudeau will host a summit in Toronto on Friday to respond to the threat of American tariffs, a gathering that will seek ways to diversify Canada’s international trade beyond the U.S.
Natural Resources Minister Jonathan Wilkinson on Thursday said Canada needs to have a conversation about whether it might be time to finally move forward in building an east-west oil pipeline. Currently, parts of this country are at the mercy of crude being piped in from the U.S.


“I do think it’s a conversation the premiers and the Prime Minister will want to have,” Mr. Wilkinson told reporters.


B.C. Premier David Eby, meantime, is already fast-tracking the permitting of resource projects, as he presses an agenda aimed at pivoting British Columbia’s resource-heavy economy away from the U.S.


In Quebec, Premier François Legault is highlighting power giant Hydro-Québec as a powerful shield to potentially dull the impact of any tariffs coming Canada’s way.


He’s mulling a fundamental labour shift that would see Quebeckers who lose their jobs in a trade war redirected to work on its $150-billion power generation and grid modernization plan.


“Hydro-Québec is Quebec’s biggest strength,” Mr. Legault said Tuesday in a speech that completely reframed his government’s economic priorities in the face of Mr. Trump’s tariff threats. “This is the biggest work site in the history of Quebec.”


Chief executive officers, meantime, are calling for Canada to start building more of its own resource infrastructure to wean itself off the U.S.
“Let’s build more mines and ship our products to the U.S., if they’ll take them without tariffs,” said Stuart McDonald, CEO of Canadian copper miner Taseko Mines Ltd., operator of Canada’s secondbiggest copper mine. “If not, these are resources that can be sold to Asia or elsewhere.”


Adam Waterous, CEO of Waterous Energy Fund, says Canada’s oil sector can weather the tariff threats by building more pipelines.


“Canada can still win the war, he said. “Not by fighting, such as cutting off Canadian oil shipments to the U.S., but by immediately starting construction on the Northern Gateway and Energy East pipelines.”


But reducing Canada’s reliance on the U.S. will be extremely difficult in resources, owing to an array of factors, including Canada’s huge dependence on the U.S. – about 95 per cent of Canadian crude exports, and 56 per cent of Canada’s minerals and metals exports go there. There are also massive logistical challenges involved in diverting resources to other markets, extra costs in doing so and, in some cases, a lack of viable alternative customers.
Meanwhile, across Canada, climate activists have warned about the environmental effects of resource extraction, aligning themselves with Indigenous groups to oppose large new projects, all of which threaten to derail any fast development.


Some sectors within Canadian resources have wiggle room to pivot away from the U.S. relatively painlessly, and they are looking at doing so. But others are extremely vulnerable and essentially bracing for impact.


Canada’s iron and steel industry is the single biggest part of Canada’s minerals and metals export trade with the U.S., accounting for $20-billion in 2023. Ninetynine per cent of Canada’s steel exports go to the U.S. François Desmarais, vice-president, trade and industry affairs with the Canadian Steel Producers Association, said “just the threat of tariffs” causes significant disruption, and if Mr. Trump follows through, it would result in a “doomsday” scenario for the industry.


Essentially U.S. tariffs would result in a vicious cycle of less demand from customers there and less corresponding demand for raw materials imported from the U.S., something that could result in mass layoffs. The steel sector is particularly vulnerable because dumping by China, the world’s biggest producer, means it is nearly impossible for Canadian steelmakers to sell into other markets. In addition, the high costs of transporting steel make it uneconomic to ship to markets other than the U.S.


Canada’s aluminum producers are much better protected from the threat of tariffs, even though 90 per cent of Canada’s output of primary metal goes to the U.S. That’s because about two-thirds of the Canadian aluminum sold to the U.S. is ingots, a commodity product that can easily be sold to other markets, such as Europe, said Jean Simard, president of the Aluminium Association of Canada. Aluminum’s lower density compared with steel, and the higher price it receives in the market per tonne, means that freight costs do not significantly hurt margins if shipments are diverted to Europe.


“You just put it on a ship and you send it there,” Mr. Simard said. “Because Europe is what we call a deficit market, which means they consume far more than what they produce.”


The nickel industry is also well-positioned. Mark Selby, CEO of Canada Nickel Co., which is developing a massive nickel project in Ontario, said that Canadian nickel producers should be able to seamlessly shift sales to Europe because, like aluminum, the continent is a net importer of the metal.


If the U.S. market is off limits, or difficult because of tariffs, because we produce a zero-carbon product, Europe is the place on the planet that cares most about the carbon footprint, he said. “So, we’ll be a product of choice for that market,” he said of nickel that will be produced at his company’s Crawford mine.
The energy sector is facing massive challenges, though, in distancing itself from the U.S., and there are few easy fixes.


The vast interconnectedness of the Canadian and U.S. oil and gas sectors means that the majority of Canadian exports will likely still be sold to the U.S., observers predict. However, U.S. tariffs on Canadian oil are expected to spur producers to maximize exports to non-U.S. markets.


The $34-billion Trans Mountain pipeline expansion nearly tripled capacity to transport Alberta crude to the Pacific Coast to 890,000 barrels a day, opening up new markets, including Asia.


Ami Broom, manager, external communications, with Trans Mountain Corp., said in an e-mail to The Globe and Mail that the company is looking at opportunities that would “increase the capacity of the expanded system, ideally in the next four to five years.”


Despite being a global player in energy, significant swaths of Canada depend on the U.S. for imports of crude oil, natural gas and refined petroleum products. Ontario and Quebec are particularly vulnerable, with about half the natural gas they consume imported from the U.S., according to the Canadian Association of Petroleum Producers industry group.


One Montreal refinery supplying Quebec and Ontario leans heavily on crude from the U.S., and even the Western Canadian oil it processes must travel by pipeline through northern U.S. states because there is no direct conduit across this country.


An Angus Reid poll published this week found that four out of five Canadians say Canada needs to ensure it has oil and gas pipelines “running from sea to sea.” But currently, there is no such infrastructure running entirely across Canada.


Cross-Canada pipelines that would carry oil and gas across the country and bypass the U.S. have been proposed as far back as the 1950s, but none have been built yet. Most recently, TC Energy Corp.’s
Energy East pipeline proposal, a 4,600kilometre-long pipeline that would stretch from Alberta to an export terminal in Saint John, was cancelled in 2017 amid heavy political opposition in Quebec and elsewhere and poor economics owing to falling oil prices.


Quebec, meantime, is making it clear that the environmental impact of building such pipelines will be closely scrutinized.


“We are not opposed to energy projects that respect environmental criteria,” Benoît Charette, Quebec’s Environment Minister, told reporters on Wednesday in Quebec City. He made the comment after being asked about the government’s stance on the GNL Québec natural gas project, which Quebec and Ottawa both opposed and was later abandoned.


Mr. Eby’s office this week said that one of the B.C. projects that are slated to be expedited is Cedar LNG, which is under construction in Kitimat and it should start exporting liquefied natural gas to Asia in late 2028.


Also on the list is the North Coast Transmission project, which would run along the route of an existing B.C. power line between Prince George and Terrace. Hydroelectricity demand would be from projects seeking to export LNG to Asia, as well as power requirements for hydrogen, critical minerals and the Port of Prince Rupert.


But winning approvals from regulators in B.C., or in other provinces, does not guarantee that companies will press ahead with their projects. There are lingering economic, political and geographic barriers to entry.


Pieridae Energy Ltd.’s now-defunct Goldboro LNG project in Nova Scotia received a permit in 2018 for construction in that province. Natural gas could be transported through a pipeline from Western Canada to Ontario to get partway to the East Coast. But there isn’t a natural gas pipeline to directly connect Quebec with New Brunswick, and then on to Nova Scotia.


In Quebec, Mr. Legault’s expansion plan for Hydro-Québec, which is led by CEO Michael Sabia, involves building thousands of new wind power turbines, 5,000 kilometres of new transmission lines and speeding up of the pace of investment to $16-billion a year. That’s twice what was spent annually during the construction in the 1970s and 80s of the James Bay hydropower stations – facilities on which Hydro-Québec built its reputation as one of the world’s biggest producers of low-carbon electricity.


Hydro-Quebéc’s Mr. Sabia has estimated that he will need 15,000 workers this year to build out the infrastructure the utility is planning, and 55,000 workers by 2033. It’s not clear where that staff will come from. Meanwhile, there are already rumblings among Quebec business leaders in some export sectors that the government shouldn’t rob them of talent but rather concentrate on salvaging the province’s existing factories by helping them find new products and markets.


“The main focus right now needs to be to try to save as many manufacturing enterprises and jobs as we can,” said Julie White, CEO of the Quebec Manufacturers and Exporters association.

Canada is an oil superpower

This opinion was written by Tony Keller and was published in the Globe & Mail on February 7, 2025.

We’re the world’s fourth-largest producer of oil, out-pumping every country in the Middle East save Saudi Arabia.


Under the pressure of Trump’s tariff threats, the commodity is suddenly being talked about, loudly and often


Prime Minister Justin Trudeau bought a pipeline in 2018, and then pushed through the building of the Trans Mountain Expansion project. For that, he deserves credit and thanks. It’s one of the most significant economic accomplishments of his time in office. It will pay dividends to our economy for decades to come.


But you’ll never hear his government or his party crowing about it. Nope.
How could they? TMX is (sigh) an oil pipeline. And the Trudeau government acts like there’s an omertà on that word: oil. In the Liberal style guide, it’s a four-letter word. Ministers and the PM try to avoid using it in polite company. Like other swear words, it only comes out under duress.


But under the duress of U.S. President Donald Trump’s threats, oil is suddenly being talked about, loudly and often. We are being forced to see things as they are, and to call them by their names.


Canada is not an “energy superpower” that exports lots of “energy” – these being the Trudeau government’s preferred euphemisms. We produce and export massive amounts of oil. We are on oil superpower. Oil, oil, oil.
We’re the world’s fourth-largest producer of oil, out-pumping every country in the Middle East save Saudi Arabia. Canada is also the world’s fifth largest producer of natural gas, ahead of all in the Mideast except Iran.
In 2023, Canada exported $192billion worth of “energy” – $4-billion of electricity and $134-billion of crude oil and bitumen, plus another $54-billion worth of natural gas, coal and refined oil.


Canada has other successful industries, from auto manufacturing to agriculture to mining to banking. But we are one of the world’s biggest petrostates – and surely the only one whose voters are mostly unaware of it, and whose federal government is uncomfortable acknowledging it. In contrast, the eco-champion Norwegians know that they’ve grown wealthy from oil and gas, and are eager to continue to do so.


We’ve long had only one export customer for our hydrocarbons, to whom we have sold at a discount to world prices because we couldn’t summon the political will to build pipelines running to the Atlantic or Pacific. But with the White House questioning even that U.S.-favourable arrangement, Canada has had to take a hard look at how we do business.


We can’t change U.S. policy. We can stop shooting ourselves in the foot. Here’s where to start:
1. Ottawa should finance one (or more) new pipelines: The Trudeau government did the right thing sinking public money into building TMX. Despite significant cost overruns, the project is already an economic winner. It makes it possible to ship 890,000 barrels a day to where oil prices are higher, beyond the U.S.
Last April, the Bank of Canada estimated that the new pipeline would add a quarter percentage point to Canadian economic growth.


A careful analysis will be needed to determine which pipeline (or pipelines) should get federal backing. Maybe the best course is reviving Northern Gateway to the Pacific. Or Energy East to the Atlantic. Maybe there are other options.
But the necessity of doing something, and of federal financial muscle to get it done, is the same as the case for building the Canadian Pacific Railway in the late 19th century. Canada is in political peril if we allow the trade of our most important commodity to remain so dependent on the U.S.


And whereas building the CPR imposed economic costs – northsouth trade was cheaper, but eastwest trade was the price of nationhood – getting more oil and gas to tidewater is national insurance that will more than earn back its premiums, through higher prices.


2. Eliminate interprovincial trade barriers. We can’t stop the U.S. from tariffing our exports, but why are we roadblocking the movement of our own goods, services and workers between provinces?


The country is rightly freaking out over the possibility of a 25per-cent tariff on shipments to the U.S., but the provinces have trade walls that a 2019 IMF study estimated are equivalent to a 21per-cent interprovincial tariff.
The average barrier with the U.S. is equal to a 3-per-cent tariff.
But facing the Mar-a-Lago Menace, Canada might just get its act together. Conservative Leader Pierre Poilievre is right to be calling for Ottawa to use the power of the purse to nudge provinces into dropping barriers. And Minister of Transport and Internal Trade Anita Anand said on Wednesday that the momentum and consensus may be there to liberate internal trade within just 30 days.


Thanks, Donald.

Canada should discuss east- west oil pipeline possibility: minister

This article was written by Steven Chase and was published in the Globe & Mail on February 7, 2025.


Canada should have a national conversation about whether a new east- west oil pipeline is needed given protectionist threats from the United States, Natural Resources Minister Jonathan Wilkinson said.


U. S. President Donald Trump on Monday delayed plans to impose steep tariffs including 10- per- cent levies on Canadian energy until March 4, but has threatened to proceed with them if Canada fails to demonstrate sufficient attention to securing its side of the shared border with his country.
Canada has not ruled out export taxes on energy if Washington proceeds with the tariffs.


Mr. Wilkinson, speaking to reporters after meetings with U. S. lawmakers in Washington, said Canada needs to consider better ways to reach new markets and supply areas of the country that rely on American oil, given the uncertain future of an existing pipeline carrying Western Canadian oil to Central Canada that is routed through the U. S.


“I think Canadians have been shaken by the actions and the words of the President of the United States, and I think it is certainly an important time for us to reflect on the longterm implications of that,” he said.


“In the worst case, where tariffs do go into play, and we respond – the government of Canada will have to respond if in fact that kind of aggressive action is taken by the United States – it’s not entirely clear where this ends,” Mr. Wilkinson said. “We are not interested in escalating, but we do need to be reflecting on the path forward,” he said. “Being so dependent on the United States for the export of oil is a vulnerability.”


It’s been nearly eight years since a proposed east- west pipeline in Canada was cancelled. The Energy East pipeline, which would have shipped oil from Western Canada and the northwestern U. S. to Eastern Canada, was scrapped in 2017. Also abandoned were plans for an export terminal in New Brunswick to transport the oil to foreign markets.


“Building large- scale infrastructure like pipelines is not simple. It takes a long time, and there are issues that you have to address around social acceptability that very much includes engagement with First Nations and others,” Mr. Wilkinson told reporters. “I’m not being prescriptive in terms of saying necessarily we need to do this, but I do think it’s a conversation the premiers and the Prime Minister will want to have.”


Mr. Wilkinson mentioned risks facing the Line 5 oil pipeline operated by Calgary’s Enbridge Inc., which supplies Ontario and Quebec but is routed through the U. S. The 1,038- kilometre line is a crucial conduit for Central Canada that carries up to 540,000 barrels a day of Alberta and Saskatchewan petroleum through Great Lakes states before re- entering Canada at Sarnia, Ont.


Its future is uncertain after Michigan Governor Gretchen Whitmer ordered the pipeline shut down over fears of an oil spill where it crosses the Straits of Mackinac waterway in her state. It remains in operation, however, and Enbridge is seeking a permit to build a tunnel deep under the straits to shield the Great Lakes from possible accidents.


“If you think about oil and some of the vulnerabilities from an energy perspective, in the context of not being certain about where the United States may go on some of these issues, some of the areas in Ontario and Quebec that are served, for example, by Line 5, the pipe runs down into the United States and comes back up,” the minister said. “That creates some degree of uncertainty.”


Mr. Wilkinson did not express concern about Canada’s ability to reach new markets for natural gas. He cited a number of liquefied natural gas export projects, such as LNG Canada’s first facility, to ship the commodity to Asian markets, which he said would be operating “within the next number of months.” A second LNG facility, Woodfibre LNG, is also proceeding, he said. Mr. Wilkinson said LNG Canada’s expansion plans “will come for some kind of final investment decision within the next 12 months.”


Keith Stewart, a senior energy strategist at Greenpeace Canada, recommended that Canada reduce its reliance on oil exports. “Doubling down on new pipelines when the rest of the world is moving to electric vehicles and heat pumps would be like buying a Blockbuster franchise as Netflix is taking off.”


In a statement, deputy Conservative leader Melissa Lantsman blamed the Liberals for the demise of Energy East, and cast doubt on whether a Liberal government would support an east- west oil pipeline. She said the Conservatives “have supported these nation- building projects from the start.”
When contacted by The Globe and Mail, South Bow Corp., the oil pipeline company spun out of former Energy East proponent TC Energy, would only say that the project was terminated in 2017.


Mr. Wilkinson also took aim at the Trump administration’s concern about the U. S. trade deficit with Canada, where Americans buy more from Canada than Canadians purchase from them. For merchandise alone, that deficit has averaged a little over $ 100- billion annually for the past three years on around $ 1.1- trillion in annual two- way trade. The trade deficit is smaller when services are taken into account.


He said the American trade deficit disappears if Canada’s energy exports – which are of enormous benefit to the U. S. – are removed from the equation.
“If you strip out energy, the United States has a $ 50- billion trade surplus with Canada, mainly in manufactured goods,” Mr. Wilkinson said.


“To be honest with you, there are ways that you could look to shrink the trade balance that would make no sense. For example, approximately half of the Trans Mountain pipeline oil goes to California,” Mr. Wilkinson said. “You could shrink the trade balance by simply saying, ‘ We’re not going to sell oil to California, sell it all to Asia.’ But that’s really not productive for California or for the United States.”

Energy sector weighs options amid 30-day pause from U.S. tariffs

This article was written by Emma Graney and was published in the Globe & Mail on February 5, 2025.

Rystad’s global head of commodity markets in oil says tariffs will likely keep oil prices in range of US$75 a barrel.

The chaos of an impending trade war with the United States has not yet roiled oil markets, but uncertainty about what’s next still looms over the sector at the start of a 30-day tariff reprieve.

That includes where crude might end up should demand ease from U.S. refiners, redirecting product to the Asian market as American companies balk at higher costs stemming from a 10-per-cent tariff on Canadian oil.

On the weekend, President Donald Trump said he would impose 25-per-cent tariffs on imports from Canada and Mexico, with a lower 10-per-cent tariff for Canadian energy imports. On Monday, he said the levies would be delayed 30 days after Mexico and Canada agreed to do more to improve border security.

Analysts are surprised that markets haven’t moved much in response to the tariffs. Even the slight bump to the differential – the gap between U.S. and Canadian benchmark oil prices – is less than expected.

On Monday, the discount on Western Canadian Select crude versus U.S. benchmark West Texas Intermediate settled at around US$14.50 per barrel.

That compares with US$16.25 a barrel on Friday at US$16.25 a barrel and the January average of US$14.25.

“The traders themselves, they thrive on the risk,” Susan Bell, senior vice-president of downstream research with Rystad Energy, said in an interview Tuesday. “Perhaps they thought that there was just too many unknowns and too many things they couldn’t call, so perhaps the risk was too great.”

Al Salazar, head of macro oil and gas research at Enverus, said while the differential isn’t completely immaterial, the sector has contended with far deeper discounts in recent years because of pipeline constraints and the hit to energy during the COVID-19 pandemic.

“For every dollar on a Canadian widening of a differential, it’s about $600 million lower in terms of revenue for the Alberta government,” he said in an interview. “It hasn’t forced anyone to shut in or anything like that, but it’s there.”

Analysts reckon any tariffs on oil will be short-lived. In a research note Monday, those at Bank of Nova Scotia said inflationary pressure on U.S. energy costs simply wouldn’t allow a prolonged hit.

Mukesh Sahdev, Rystad’s global head of commodity markets in oil, said the tariffs will likely result in a surplus of crude and refined products in Canada and Mexico, while driving shortages in the U.S. as the two countries redirect crude. That in turn could, affect U.S. refineries and lead to potential price hikes.

Where oil prices touched a high of near US$82 a barrel by mid-January, because of tighter Russian sanctions, Mr. Sahdev said in a research note that tariffs will likely keep prices in range of US$75 a barrel.

The expanded Trans Mountain pipeline system between Edmonton and Canada’s West Coast offers about 180,000 barrels a day of spot capacity – pipeline space available on an as-needed basis. Ms. Bell said it will likely be snapped up to reduce deliveries to the U.S. and boost the flow of Canadian barrels to the coast, where it could potentially head to China and the broader Asian market.

But the fact that tariffs are to be 10 per cent – rather than the 25 per cent initially threatened by Mr. Trump – means there is less incentive to redirect crude oil from the U.S. market, she added.

“At the 25-per-cent tariff, there’s a lot of room to pay for incremental transportation. But at the 10-per-cent tariff, it gets a little bit more difficult to see that arbitrage there,” she said.

Industry and governments in Canada remain focused on lobbying U.S. officials amid the pause in tariffs.

Federal Natural Resources Minister Jonathan Wilkinson is in Washington once again this week to pitch an alliance focused on energy and minerals to legislators, executives in the energy and mining industry and the U.S. media. And Alberta Premier Danielle Smith will return next week to try to get the Trump administration to abandon tariffs and focus on what she called “win-win solutions on trade and security.”

Deborah Yedlin, president of the Calgary Chamber of Commerce, said that any oil company executives who thought they had their script ready last week for earnings calls are having to rewrite it for tough questions on U.S. trade.

The hardest thing to do is look past the maelstrom of mixed messaging from the White House and make decisions, she said.

“What the energy sector is doing now is saying, ‘Let’s see what actually comes into play, what that looks like, what kind of conversations we have in the meantime with everybody who’s buying our product, and understand better what we need to do,’ ” Ms. Yedlin said.

Cleantech sector must show it can compete in a world with tariffs

This article was written by Jeffrey Jones and was published in the Globe & Mail on January 22, 2025.

Pierre Larochelle began huddling with executives in his investment fund’s portfolio of companies about strategy long before U.S. President Donald Trump began his second term warning he intends to squeeze trade partners, including Canada, with tariffs.

The co-founder of Idealist Capital, a Montreal-based impact fund, said the priority for the businesses is to double down on efforts to keep production costs at a minimum, so prices for their environmental technology won’t be out of reach for buyers if Mr. Trump makes good on his threat to levy duties at the border.

In recent weeks, the companies gained some advantage from the weakened Canadian dollar, producing goods at home and selling them for stronger greenbacks. But founders and managers must now concentrate on what they can control amid the uncertainty, Mr. Larochelle said.

“It becomes kind of a trigger to put everybody’s focus on it: ‘Hey guys, how can we be more productive and cost-efficient to remain competitive?’” he said.

That’s the challenge, as Canada’s green technology sector faces a double whammy of potential tariffs in the U.S, its main export market, and questions about whether it can withstand a possible drop in subsidies and tax breaks under the new President.

Mr. Trump said on Monday that tariffs could be imposed on goods from Canada and Mexico on Feb. 1. He has said for months they could be as high as 25 per cent.

In his inauguration speech, Mr. Trump also said he would end former president Joe Biden’s signature policies that supported clean energy and other environmental technology in favour of expanding fossil fuel production. He signed an executive order pausing disbursements under the Inflation Reduction Act (IRA) pending a review of its programs.

Canada’s cleantech industry is hugely dependent on the U.S. market.

In 2022, the sector shipped $7.6billion of products to the U.S., accounting for nearly 77 per cent of its exports, according to Canada Cleantech Alliance.

The industry was already facing a number of uncertainties, including questions about future support should the Conservative Party take power in Ottawa in this year’s coming federal election, and the recent windup of the Sustainable Development Technology Canada agency, which has upended funding for early-stage ventures.

Idealist has investments in dcbel, a bi-directional EV charging company; XNRGY Climate Systems, which develops high-efficiency commercial HVAC units; SPARK Microsystems, which makes low-power semi-conductors for wireless communications; and Sollum Technologies, which specializes in smart LED lighting for greenhouses.

If the Trump administration levies tariffs on the companies’ products, exporters should highlight those surcharges on purchase orders so the customers can differentiate those costs from the price of the products, Mr. Larochelle said. That could lead some of the buyers to put pressure on their government, he added.

The industry is faced with tough choices, many of which have drawbacks, said Peter McArthur, chair of Canada Cleantech Alliance. Some developers are considering pushing customers to bump up orders or warehousing their products in the U.S. before duties are imposed. The benefits of those are fleeting.

In past trade disputes, cleantech companies have shifted production capacity to the U.S. to avoid tariffs, but doing so carries risks, including the potential that the political landscape could shift markedly over the next four years.

“That’s not great for Canadian economic development, and cleantech is a gigantic economic development opportunity for Canada,” Mr. McArthur said.

The trade friction may prompt companies to bolster efforts to seek out new markets to reduce their reliance on the U.S., though that takes time, he added.

Mr. Biden provided massive green incentives and tax credits under the IRA, and the policy has driven adoption of environmental technology. It is unclear whether any of those incentives will survive, though Trump-supporting Republican states have been among the largest beneficiaries.

Cleantech and climate-tech companies will have to show that they can thrive without government incentives, said Karen Hamberg, partner, financial advisory, at Deloitte and veteran of Canada’s clean tech sector. That highlights the need for “relentless focus” on business value and competitive advantage, she added.

“We are entering an extremely challenging period, and it will require a shift in mindset away from subsidy support to innovation as a driver of value creation,” Ms. Hamberg said.

Canada sends firefighting resources to the U.S., as PM, premiers highlight relationship with neighbour

This article was written by Andrea Woo and was published in the Globe & Mail on January 10, 2025.

Canada is sending firefighters and other resources to California to assist in the fight against five major wildfires that have ravaged Los Angeles, levelling thousands of structures, killing at least six people and putting nearly 180,000 under evacuation orders.

Minister of Emergency Preparedness Harjit Sajjan said Thursday that he had connected with U.S. Federal Emergency Management Agency administrator Deanne Criswell to offer Canada’s support.

“Team Canada, with Ontario, Quebec and Alberta, is ready to deploy 250 firefighters, aircraft equipment and other resources as early as tonight,” Mr. Sajjan said in a statement, adding that the Canadian Forces are standing by to move personnel and equipment.

“Canada stands ready to support our American neighbours during this challenging time.”

Ottawa and several premiers are using their united show of support and pledge of resources to highlight the strength of U.S.Canada relations, which are under growing strain ahead of president-elect Donald Trump’s inauguration. He has said he will use “economic force” to annex Canada, and Ottawa is mulling retaliatory tariffs if he moves forward with his threat of a 25-per-cent tax on all products from Canada.

Canada and the U.S. have a decades-long history of sharing resources to combat wildfires. This partnership was strengthened with a memorandum of understanding signed in 2023.

The blaze began Tuesday with the Palisades fire in the Santa Monica Mountains and spread rapidly across the Los Angeles area, fuelled by a powerful windstorm. That fire, and the Eaton fire near Pasadena, had together scorched around 135 square kilometres by Thursday afternoon. The fires are entirely uncontained and are considered the most destructive fires in Los Angeles history.

The Canadian Interagency Forest Fire Centre, which co-ordinates firefighting resources in Canada and internationally, said it had received a request from its U.S. counterpart for two CL-415 Skimmer Airtankers with flight crew to operate in Southern California. The agency said it is fulfilling the request but could not provide a delivery timeline.

On Thursday, Mr. Trudeau posted to X a video of a Canadian waterbomber responding to the fires, writing, “Neighbours helping neighbours.” The plane is one of two from Quebec’s forest fire protection agency, SOPFEU, which sends the pair to the U.S. each fall as part of an annual contract, extended this year because of the emergency.

This is an example of what I have been saying, you know, our closest friend, our closest ally, needs help and we’re going to make sure we’re going to be there for supporting them. DOUG FORD, ONTARIO PREMIER

B.C. Forests Minister Ravi Parmar said Cal Fire, California’s fire response service, reached out to his province directly on Thursday requesting senior-level expertise from the BC Wildfire Service. Premier David Eby said province “will always stand with our American neighbours when they are in need.”

Alberta Premier Danielle Smith said her province is preparing to deploy an incident command team as well as other resources, including water bombers and night-vision helicopters.

“Good neighbours are always there for each other in times of need, and we will assist our American friends in any way they need during this crisis,” she wrote in a post to X.

Ontario Premier Doug Ford said his province intends to send two waterbombers along with a contingent of 165 urban firefighters that could be ramped up to 300. On Tuesday, he appeared on Fox News to dismiss Mr. Trump’s threats to make Canada the “51st state” as “ridiculous,” and to advocate against his tariff plans.

“This is an example of what I have been saying, you know, our closest friend, our closest ally, needs help and we’re going to make sure we’re going to be there for supporting them,” Mr. Ford told reporters at Queen’s Park on Thursday.

“And I know other premiers are going to do the exact same thing. But this is what you do. When you see what’s happening on television, it’s a tragedy, what’s happening in California. The poor front line firefighters, they’re exhausted and they need some relief.”

Mr. Trudeau, who was in Washington on Thursday to attend the funeral of former president Jimmy Carter, told reporters that he had been in contact with California Governor Gavin Newsom and other U.S. officials to offer needed resources.

“Unfortunately, Canada has developed a significant amount of expertise in wildfires that are encroaching on suburban and urban areas,” he said. “This is something that we’re all going to have to deal with more in the world over the coming decades with the impacts of climate change, and we are certainly there to help our American friends.”

The Prime Minister added that he had productive meetings with a number of U.S. business leaders regarding tariffs, and again dismissed Mr. Trump’s threat of annexing Canada.

“Canadians define themselves in a whole bunch of different ways, but one of the ways we all use as shorthand is we’re Canadian because we’re not American, and that is not going to change.”

No winners seen in Trump’s `destructive’ energy tariffs

Canadian crude imports expected to be exempt from measures

This article was written by Luci Kassai, Robert Tuttle, and Elizabeth Elkin, and was published in the Toronto Star on December 26, 2024.

When U.S. president elect Donald Trump announced his plan to impose tariffs on goods coming from Canada and Mexico until they stop the flow of migrants and drugs, he said he wanted the countries to “pay a very big price!”

In energy markets, it won’t just be Canada and Mexico taking the hit, according to analysts, who say the domestic fallout would be so severe that Trump will likely end up exempting energy products once he takes office.

Charging 25 per cent levies on oil and gas from the U.S.’s top two trading partners would spike gasoline prices in the Midwest, raise electricity costs along both U.S. coasts and hammer profitability for America’s refiners, among other effects, experts say.

While tariffs can be disruptive in any market, they threaten to be particularly troublesome for a North American energy industry that has been tightly integrated for decades and already largely favours U.S. interests.

“There are no winners from a tariff hike and ensuing price hike to the raw inputs that literally are foundational to our society,” said Joe DeLaura, a global energy strategist with Rabobank. For that reason, DeLaura said he expects Canadian crude imports to be exempt from tariffs or subject to a charge of only one to two per cent.

Imperial Oil Ltd., the Canadian oilsands unit of ExxonMobil Corp., also does not expect a tariff on oil flows into the U.S., executives said on an investor call Thursday.

“There is significant benefit to moving Canadian crude into the U.S., and that benefit is on both sides of the border,” Brad Corson, chief executive officer, said on the call. “We export a significant amount of crude, but the U.S. needs that crude as well.”

Trump’s transition team said his tariffs against China in his first term created jobs, spurred investment and didn’t stoke inflation. His policies will make American energy dominant, protect energy jobs and bring down living costs, Karoline Leavitt, a spokesperson for the TrumpVance transition team, said in an emailed statement.

“President Trump will work quickly to fix and restore an economy that puts American workers first by reshoring American jobs, lowering inflation, raising real wages, lowering taxes, cutting regulations, and unshackling American energy,” Leavitt said.

Crucial trade

The trade in energy is crucial for all three countries. The U.S. buys about 4 million barrels of oil a day from Canada, accounting for more than half of its crude imports. Most of that crude is cheaper, heavy grades, allowing the U.S. to export vast quantities of its own highervalue, lighter oil while keeping domestic fuel costs in check.

In Canada, energy products are a critical economic lifeline that make up about 30 per cent of its exports to the U.S. For Mexico, the U.S. Gulf Coast refining complex has become an important source of gasoline as the country struggles to ramp up its own production. Mexico already buys more oil and products from the U.S. than it sells to the country.

But perhaps the region hardest hit by the tariffs would be the U.S. Midwest refining district, which includes the swing states of Ohio, Michigan and Wisconsin. Fuel makers in the region rely on Canada for 46 per cent of the crude that they turn into gasoline and diesel.

That’s an arrangement that has benefited them as they can buy Canadian oil for $12 less per barrel than the benchmark U.S. grade currently. Were Trump’s tariffs imposed, U.S. refiners would be hard pressed to find other sources of crude because they rely solely on pipelines and railways to receive feedstock, essentially locking them into their current sources of oil.

Depending on how long their margins are squeezed, Midwest refiners also may curtail production or shutter plants. The result would be higher gasoline and diesel pump prices for U.S. drivers.

Tariffs would have “hugely destructive consequences for refineries” in the Midwest, said Rabobank’s DeLaura.

A North American energy trade war also would likely hit Americans’ electricity bills. Power markets in the northeastern and northwestern U.S. rely on electricity or natural gas imported from Canada, meaning customers in New York, New England and the West Coast may see higher power prices to cover the cost of the tariffs, said Gary Cunningham, director of market research at risk management firm Tradition Energy.

On Wednesday, Ontario Premier Doug Ford said Canada would respond forcefully. “Depending how far this goes, we will go to the extent of cutting off their energy, going down to Michigan, going down to New York state and over to Wisconsin.”

“ There are no winners from a tariff hike and ensuing price hike to the raw inputs that literally are foundational to our society.”

JOE DELAURA RABOBANK GLOBAL ENERGY STRATEGIST

Other premiers dismiss Ford’s threat to Trump

No plans to halt energy exports to U.S. in response to tariffs, say Alberta, Quebec, Newfoundland

This article was written by Tonda MacCharles and Robert Benzie, and was published in the Toronto Star on December 13, 2024.

OTTAWA Three key premiers whose provinces generate energy exports dismissed Premier Doug Ford’s suggestion that Canada should slap punitive tariffs on America or shut off electricity, gas and oil shipments to the U.S. in retaliation for Donald Trump’s threatened tariffs on Canadian products, as Trump shrugged off Ford’s warning.

Alberta Premier Danielle Smith, Quebec Premier François Legault, and Newfoundland and Labrador’s Andrew Furey said bluntly they do not support Ford’s threat to “cut off their energy,” which he said would make Americans “feel the pain.”

Ford made the threat after all 13 premiers met the night before with Prime Minister Justin Trudeau on Canada’s response, and he reiterated it Thursday.

However Trump, the incoming U.S. president, appeared unmoved by Ford’s tough talk when speaking with a CNBC reporter Thursday on the floor of the New York Stock Exchange.

“That’s OK if he that does that. That’s fine,” Trump told CNBC, repeating his view on the CanadaU.S. trade deficit.

“The United States is subsidizing Canada and we shouldn’t have to do that,” Trump said. “And we have a great relationship. I have so many friends in Canada, but we shouldn’t have to subsidize a country. We’re subsidizing more than a $100 billion a year. We shouldn’t have to be doing that.”

Alberta’s Smith dismissed throttling Canadian energy shipments, as she unveiled Alberta’s own plan to beef up border security with new provincial sheriff patrol teams to allay Trump’s border concerns.

“Under no circumstances will Alberta agree to cut off oil and gas exports,” Smith said. “We don’t support tariffs. I don’t support tariffs on Canadian goods, and I don’t support tariffs on U.S. goods, because all it does is make life more expensive for everyday Canadians and everyday Americans.

“Instead, we’re taking a diplomatic approach, and we’re meeting with our allies in the U.S. We’re making the case for Alberta oil and gas to be part of the solution to energy affordability, to energy security and to, generally speaking, North American defence security as well.”

Ford reiterated the notion of cutting off Canadian energy exports to the U.S. right before Quebec and Newfoundland and Labrador unveiled a blockbuster new $225billion hydroelectricity deal, one the two provinces touted as key to Canada’s renewable energy commitments.

The deal replaces a scorned decadesold contract due to expire in 2041, and requires Quebec to pay 30 times more for thousands of kilowatt hours of power generated from the Churchill Falls plant. It will also see the two provinces develop new hydro power projects along the Churchill River, and generate 2,400 more megawatts for Quebec.

Legault called it an “extraordinary” deal for Quebec that means Labrador hydroelectricity will ramp up from a 17 per cent share of Quebec’s supply to 50 per cent.

Furey said the agreement “changes everything.”

“It is a fair deal for both parties. It’s a good commercial deal that recognizes the ills of the past and creates a new path forward for Newfoundland and Labrador, while allowing Quebec some certainty moving forward.

“So Premier Legault did show us the money,” Furey quipped.

So it was no surprise when both premiers immediately dismissed any call to shut off energy exports to U.S. markets.

“These tariffs will have significant impact on families and macroeconomies on both sides of the border. We hope it is just bluster. We’re preparing as if it is not. There will be no winners in a trade war,” Furey said, echoing Smith’s pledge.

“Certainly from Newfoundland and Labrador’s perspective, we have no interest in stopping the flow of oil and gas, our incredibly valuable and now wellsoughtafter, worldclass oil and gas, to the United States. Nor do we now have any interest in stopping export of any electrons that could be produced in Labrador to the northeastern seaboard.”

Legault said he met Trump in Paris last weekend, “and he told me very clearly that we can avoid those tariffs if we do what needs to be done with the borders.”

“He doesn’t want to see any more illegal immigrants coming from Canada to the U.S. So I think the best choice right now for Mr. Trudeau is to very fast table a plan with money, with the number of people, to better secure the border. I think we have to do that. It’s a lot better than getting 25 per cent tariffs starting on Jan. 21. So I prefer that than starting a war and stopping sending energy to (the) United States.”

The Alberta premier said her new measures, which include sheriff patrol teams and a “red zone” within two kilometres of the AlbertaMontana border, had been in the works since 2023 and would have been implemented even without Trump’s tariff threat.

Steve Verheul, Canada’s former top trade negotiator, has suggested that Canada could put export levies on key Canadian goods like oil and agricultural commodities, saying it would quickly drive up the cost of fuel and food to American consumers, and could be used as leverage to negotiate a “broader exemption across all the sectors” that may be hit by Trump’s tariffs.

Smith dismissed that, too, as a “terrible idea.”

Manitoba Premier Wab Kinew said Thursday he also intends to beef up border security using provincial conservation officers and spend more on overtime for RCMP officers at the border.

Kinew did not directly answer whether he would restrict electricity exports, but he said Manitoba is drafting a list of potential retaliatory tariffs in order to protect Canadian jobs at risk from Trump’s tariffs.

He said Canada must show “how are we going to stand up for the (agriculture) industry? How are we going to stand up for our energy industry and the manufacturing industry here in Manitoba? So we have to make sure that our response is comprehensive,” he said.

But at Queen’s Park, Ford did not walk anything back.

He said he’s “sending a message to the U.S.” not to impose tariffs on Canadian goods or else — as a “last resort” — Ontario will strike back.

“We power 1.5 million homes,” Ford said Thursday, referring to the electricity Ontario supplies Michigan, New York and Minnesota.

“If they put on tariffs, it’s going to be unaffordable for Americans to buy electricity,” the premier said, noting his province alone does about $500 billion in annual twoway trade with the U.S. and nine million American jobs depend on trading with Ontario.

“Just like if they put tariffs on the 4.3 million barrels of oil that Alberta is shipping down to the U.S. — if you put 25 per cent increases, every barrel of oil, every gallon of gasoline (goes up) by $1,” he said at Queen’s Park.

Ford said that “along with the federal government, all the premiers are putting a list together” of American goods that could be targeted with countertariffs.

“We can’t just roll over as we’re under attack and hurting our families and our jobs.”

Trudeau on Monday said Canada would respond to Trump’s threat to impose a 25 per cent surcharge on all Canadian and Mexican products on his first day in office to force the two border countries to “stop” illegal immigration and fentanyl from entering the U.S.

But it is far from clear what American products the Liberal government would levy countertariffs on.

Deputy Prime Minister Chrystia Freeland said only that several premiers said critical minerals and metals needed by the U.S. should be on any “robust” Canadian retaliatory tariff list.