‘No economic justification’: Alberta premier responds to 10% tariff on Canadian oil

February 1, 2025 Canuck

Alberta Premier Danielle Smith says the province will continue to try to convince U.S. President Donald Trump to reverse course on the tariff the U.S. is imposing on Canadian goods.

In a lengthy post on X, formerly known as Twitter, on Saturday, Smith said she was disappointed with the announcement that the U.S. will place a 10 per cent tariff on Canadian energy products, as well as a 25 per cent tariff on all other Canadian goods.

The decision will harm Canadians and Americans alike, straining the relationship between the two countries, Smith said.

She added that she will work with the federal government and her provincial counterparts on a proportionate response to the tariffs.

“Alberta will do everything in its power to convince the U.S. president and Congress, as well as the American people, to reverse this mutually destructive policy,” Smith said.

In her statement, Smith partly attributed the reduced 10 per cent tariff on Canadian oil to advocacy by her provincial government and the Albertan industry. She says the province helps create substantial wealth in the U.S. through American companies upgrading and refining Canadian crude.

“It is also worth noting that if oil and gas exports are excluded, the United States actually sells more to Canada than Canada sells to the U.S,” Smith said.

“As I’ve stated to every American policymaker I’ve met with these past months, Canada buys more from the U.S. than any country on earth — more than U.K., France, Germany, Italy and Vietnam combined. There is, therefore, no economic justification for tariffs imposed on any Canadian goods.”

Smith says the province will continue diplomatic efforts in the U.S. to advocate for lifting the tariffs, and pointed out that American consumers will also feel the policy’s detrimental effects.

She highlighted the strategic use of Canadian import tariffs on U.S. goods that are more easily purchased from Canadian and other non-U.S. suppliers. Such a response would minimize costs to Canadian consumers, Smith argued, while creating maximum impact south of the border.

She also called for all funds raised from retaliatory import tariffs to go directly to benefit the Canadians most impacted by a trade war.

The province still opposes a ban on exports to the U.S. or export tariffs on goods leaving Canada for the U.S.

“Such tactics would hurt Canadians far more than Americans,” Smith said.

“Canada can and must now come together in an unprecedented effort to preserve the livelihoods and futures of our people and expand our political and trade relationships across the globe. We can no longer afford to be so heavily reliant on one primary customer. We must stop limiting our prosperity and inflicting economic wounds on ourselves.”

Tariff impact on Alberta, America

Gary Mar, president and CEO of the Canada West Foundation, says tariffs on Canadian oil will hurt American consumers at the gas pumps. In 2023, roughly 60 per cent of U.S. crude oil imports originated in Canada.

“It’s impossible not to see an increase in the price of gasoline in the U.S. whenever you put a tariff on Canadian oil that comes in,” he said. “So one can hope that… maybe there will be something else that happens that causes the president of the United States to change his mind, and not just on oil, but all kinds of commodities that come from Canada.”

WATCH | ‘It’s a lose-lose’: Alberta reacts to latest tariff threat from U.S. President Donald Trump

‘It’s a lose-lose’: Alberta reacts to latest tariff threat from U.S. President Donald Trump

1 day ago

Duration 1:42

Business leaders and industry experts are expressing slight relief that Canadian oil exports to the U.S. may not face the full 25 per cent threatened tariff, but still there’s concern over who will pay and whether consumers will feel the pinch.

Mar expects at least some U.S. residents to be upset if gasoline prices increase around the country, because Trump campaigned on reducing the cost of fuel. He adds it’s likely that Trump’s move to apply tariffs on Canadian oil may backfire.

“I think that what you’ll see though is that Americans will say ‘This is not the America First policy I signed up for,” he said.

The impact tariffs will have on Canada’s economy is undeniable, Mar says, but he’s optimistic that Trump will reverse course eventually.

“It’s not going to be good for the oil and gas industry [in Alberta], but the pain hopefully will be a temporary one,” Mar said.

Trump has previously spoken about the possibility of reviving the Keystone XL pipeline project. Mar says if resurrecting Keystone is his endgame, he’ll need Canada’s cooperation.

“The line is completed between Hardisty, Alta., and the Montana border. And they need perhaps a joint Canada-U.S. venture backstop by government to de-risk the project, and then go forward on that and bring life into President Trump’s ambition to become an energy superpower,” he said.

“He can’t do it without access to Canadian oil and gas.”

What should the response be?

Mar says placing an embargo on oil going into the U.S. is “one of the worst” strategies that Canada could implement in retaliation to Trump’s tariffs.

If American voters become angry at the president’s actions for raising the cost of their gasoline, Mar says entirely cutting off oil to the U.S. would shift that anger onto Canada.

“[Trump] may discover in fact, that we sell oil at a discount to the United States and he may take that fact and say, ‘Well, I did that. I get the win because we get cheap oil from Canada and that’s the reason why we’re taking the tariff off,'” Mar said.

In the short-term, Canada must strategize a response to how it will tactically deal with tariffs, Mar said. But long-term, he said the country will have to find an alternative to relying on the U.S., and explore other marketplaces to sell oil and gas.

In a statement Saturday, the Calgary Chamber of Commerce urged the federal government to focus on diplomacy and de-escalation rather than retaliatory measures.

“Retaliation should be seen as a last resort option, particularly given Americans will feel the impact of President Trump’s tariffs on a daily basis when they buy groceries and fill up their cars,” the statement reads.

“Americans are likely to see up to a 30c/gallon price increase at the gas pumps, many of the eight million jobs in the U.S. tied to trade with Canada may be compromised, and their industries, many of which rely on Canadian inputs, will be hamstrung.”

Smith also called for the country to fast-track the construction of oil and gas pipelines to the east and west coasts of Canada, while bolstering other energy infrastructure and reducing red tape around interprovincial trade.

“Alberta stands ready to do our part if this true Team Canada approach is taken,” Smith said.

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Canada News

‘No economic justification’: Alberta premier responds to 10% tariff on Canadian oil

Tariff impact on Alberta, America

What should the response be?

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