U.S. tariff threat shows need for Alberta to find more trade opportunities, industry leaders say

February 5, 2025 Canuck

Now that Albertans have a brief reprieve from the threat of incoming U.S. tariffs on Canadian goods, politicians, industry leaders and consultants say now’s the time to find different buyers for Alberta goods.

Dennis Darby, CEO of the Canadian Manufacturers and Exporters said highways, rail lines and trade corridors built to serve a century-long relationship with the United States won’t be changeable overnight, but U.S. President Donald Trump’s tariff threats are a wake-up call.

“Never let a crisis go to waste,” Darby said of Trump’s now-postponed plan to slap 25 per cent tariffs on Canadian goods and 10 per cent tariffs on oil and gas products.

Darby says there’s not much politicians can do during the 30-day reprieve from U.S. tariffs, but reducing inter-provincial trade barriers is long overdue.

Gitane De Silva, a consultant and past Alberta diplomat in Washington, D.C., said Alberta has led the country in trying to eliminate internal trade barriers, and the province should continue to lead by example.

Barriers include regulations between provinces that don’t line up. For example, a semi-trailer crossing a provincial border might have to switch a flag for a safety light to meet local requirements. It’s a stumbling block that wastes time and money, she said.

Watch | How can Alberta prepare for tariff threat:

What does Alberta need to do to prepare for tariff threats

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With potential U.S. tariff threats on hold, some businesses are calling on the Alberta government to push for the lifting of interprovincial trade barriers. As Travis McEwan reports, some experts say it’s time for Alberta to look at other trade partners, but cutting back on trade with the U.S. could be very difficult.

De Silva said different certification requirements also make it difficult for professionals to cross provincial and territorial boundaries for work.

A 2019 study found removing trade barriers not tied to geography could increase Alberta’s GDP by $11 billion per year, and could flush another $1.8 billion into government coffers in tax revenues.

The G7 leaders’ meeting scheduled for Kananaskis this June is a perfect opportunity for Alberta to discuss potential new international trade relationships, she said.

However, she said the province should continue to lobby the U.S. diligently to convince the Trump administration of the potential harm to both countries.

“It would be very difficult for us to quit the United States,” she said. “That’s not to say that we could not, we should not continue to push to diversify our markets, but there’s also a lot of trade infrastructure that needs to be built to facilitate that.”

No toasts to trade barriers

The sale of alcohol within Canada has long been trade irritant for some liquor producers.

Nathan Flim, founder of the Fort Distillery northwest of Edmonton, sells his mixed liquor products to 14 states, and hopes to expand sales to several more.

“We started looking at expansion across Canada, and for liquor business, it’s almost impossible,” he said Tuesday, as employees filled and corked bottles, applied labels, and slotted them in boxes to be shipped.

A man wearing a black shirt and jeans stands by a wooden table, on which a row of bottles containing different colours of liquor sits. Additional shelves of liquor bottles are visible behind him on a pink cinderblock wall. — Fort Distillery founder Nathan Flim says he was frustrated by rules preventing him from selling his liquor products in other provinces. (Travis McEwan/CBC)

He said selling in the U.S. involves more travel to make deals, but at least states are open to buying the products. He said it’s an ironic situation for a company that takes pride in using Canadian ingredients.

Also rumbling down those highways across the border are trucks full of lumber, and pulp to manufacture toilet paper and tissues.

Jason Krips, president and CEO of the Alberta Forest Products Association, says about half of Canadian lumber and pulp is exported to the U.S. American homebuilders are deeply dependent on Canadian lumber, he said.

Should tariffs apply on top of existing softwood lumber duties, which are also slated to rise, it would be an existential threat to Alberta’s forestry industry, Krips said.

He said there are several things that could help, quickly, including the provincial government and municipalities using more wood in the construction of public infrastructure.

View of forest from the air — About half of Alberta lumber is exported from Canada, and 97 per cent of that goes to the U.S., says the Alberta Forest Products Association. (David Bajer/CBC)

He also wants American wood customers and Canadian politicians to continue to put pressure on U.S. lawmakers to abandon the tariff idea. Although shipping is expensive, he says there’s also a growing demand in Asia for high-end wood products.

With tariffs posing a threat of recession and potential job losses in Alberta, Gil McGowan, president of the Alberta Federation of Labour, says the provincial government has unique leverage to put pressure on the U.S. by curtailing oil and gas sales refineries in the Midwest rely on.

“We’re still at risk and we’re still at the bargaining table,” McGowan said. “And when at the bargaining table, you want to find your strongest cards.”

More pipelines

Alberta Seniors, Community and Social Services Minister Jason Nixon said Tuesday Canada needs better ways to move petroleum across the country, both for domestic use and to ship to overseas markets.

“I hope that we finally see the federal government take that seriously,” Nixon said at an unrelated news conference. “Let’s start with pipelines and railroad expansion, port expansions, to make sure that we’re not sending 80 per cent of our products to just one trading partner.”

Former premier Rachel Notley said in an interview Tuesday inter-provincial trade barriers are challenging to overcome because many regulations exist for safety reasons and public concern.

She said it’s “ridiculous” that the only pipeline delivering oil and gas to eastern Canada has to cross the international border twice. And that Canada can change this independent of the U.S.

“We’d have a much stronger hand to play with respect to these kinds of economic threats that are being used to challenge our sovereignty,” Notley said.

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Canada News

U.S. tariff threat shows need for Alberta to find more trade opportunities, industry leaders say

No toasts to trade barriers

More pipelines

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