Alberta Premier Smith rejects oil and gas export tax, warns of economic harm in U.S. trade dispute
Danielle Smith ruled out cutting or taxing Alberta's oil exports to the U.S., arguing such moves would trigger retaliation and destroy hundreds of thousands of jobs.
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Alberta Premier Danielle Smith is rejecting using the province's oil and gas exports as leverage in an escalating trade dispute with the United States, warning that taxing or cutting off energy exports could cause severe economic damage on both sides of the border.
Smith said Wednesday that Canada should instead "double down" on diplomacy with U.S. officials and avoid further escalation. "I cannot think of a more disastrous policy decision than cutting off or taxing Alberta's oil to the United States," she said Wednesday afternoon in Grande Prairie, speaking at a ribbon cutting for Northwestern Polytechnic's new Skilled Trades Training Centre.
Smith predicted that a 50-per-cent Canadian tariff on the roughly four million barrels of oil exported to the U.S. each day would prompt American retaliation. "When you take an action, you have to expect an equal and opposite, and probably even more forceful reaction," she said.
Alberta sends the majority of oil exports to the United States. Smith warned that an American tariff of between 50 and 100 per cent on Canadian oil and gas would result in the loss of about half a million jobs at minimum, mostly in Alberta but also hundreds of thousands in Ontario and Quebec.
Cutting off exports entirely could have even greater consequences, Smith argued, including U.S. restrictions on refined fuel shipped to Eastern Canada. "The United States would, of course, respond and cut off all gasoline and diesel from their refineries to Ontario and Quebec, right as we turn into fall and winter," she said. American refineries would likely look to Venezuelan oil to replace Alberta products, she added, meaning "we would lose the United States as a customer entirely and likely forever."
Smith called for fewer interprovincial trade barriers, faster approval of the West Coast pipeline proposed by her government, and equal markup nationwide for all Canadian alcohol products. She said Canada cannot win through economic force and instead needs focus on diplomacy, diversification, and strengthening domestic markets.
"Canada will not win this battle through brute force. We will win it through being smarter, more strategic, more agile, and using our relationship with the American people to have these tariffs reversed," Smith said.
As HOC reported in late August, Alberta's premier resisted a 'Team Canada' energy-export strategy as trade tensions with the U.S. deepened.
What is the federal government's position on whether to deploy oil and gas as negotiating leverage in the trade dispute?
Has the U.S. indicated what specific trade concessions it would accept to resolve the tariff escalation?
We'll update this story as answers emerge.
The facts
How much oil does Alberta export to the U.S. daily?
Alberta exports roughly four million barrels of oil to the United States each day.
How many jobs would be lost if the U.S. imposed tariffs on Canadian oil and gas?
An American tariff of between 50 and 100 per cent on Canadian oil and gas would result in the loss of about half a million jobs at minimum, mostly in Alberta but also hundreds of thousands in Ontario and Quebec.
What did Premier Smith say Canada should do instead of taxing oil exports?
Premier Danielle Smith said Canada should 'double down' on diplomacy with U.S. officials and avoid further escalation, focusing on being smarter, more strategic, and using relationships with the American people to have tariffs reversed.
