HOUSTON—Alberta and Saskatchewan, Canada’s largest natural gas and oil producers, will not retaliate as Ontario did in responding to President Donald Trump’s threats to impose 25-percent tariffs on steel and aluminum beginning March 12 and on all Canadian imports starting April 2, the provinces’ energy ministers said Tuesday.
“We want to de-escalate” the brewing trade war, Alberta Minister of Energy and Minerals Brian Jean told reporters during a press conference at CERAWeek by S&P Global at the Americas Hilton-Houston.
“We want to see the tariffs dropped,” he continued. “If we go back and forth” imposing additional costs on imports and exports between the nations, it will serve no purpose “but to hurt business and people who can’t afford to pay more for energy. We have to think about those folks.”
Jean and Saskatchewan Minister of Energy and Resources Colleen Young, who said her province also has no plans to respond to U.S. tariffs, spoke before Ontario Premier Doug Ford suspended the 25-percent tariff he slapped Monday on electricity generated in his province and dispatched to 1.5 million homes and business in New York, Michigan, and Minnesota.
Ford suspended the surcharge after President Trump ordered pending tariffs on steel and aluminum doubled to 50 percent. It was uncertain if the president would rescind that boost as of Tuesday evening.
Jean, speaking before Ford suspended Ontario’s tariff on exported electricity, said Alberta would take a different short-term path.
“The nice thing about Canada is we have 10 different jurisdictions that think for themselves,” he said, noting provincial officials are speaking with the Trump administration.
“There is conversation. We’re providing options that will be attractive to the Americans,” Jean said, adding he would not elaborate on “particulars” before hinting the Trump administration is committed to building the nation’s strategic oil reserve and “to do that, it would need a steady supply [of oil] from Canada.”
While Saskatchewan’s oil and gas production is relatively diminutive by comparison, the province is rich in critical minerals and other resources vital for emerging technologies.
While the United States is the world’s largest natural gas producer and exports more than 4 million barrels a day of liquified natural gas, it still imports more than 4 million barrels a day of Canadian crude oil, Jean said.
President Trump’s vow to make the U.S. “energy dominant” needs those 4 million barrels a day of Alberta oil, he said. “Without us, this can’t happen.”
Midwest oil refineries are designed to process only Alberta oil sand crude, Jean said, and imported energy from Canada supports more than 200,000 U.S. jobs.
Canada has been selling oil and natural gas to the United States “at a discount for 20 years,” he said.
‘A Nation-Building Moment’
Jean and Young said that while their provinces are not pondering immediate responses to President Trump’s March 12 and April 2 tariffs, the trade flap has forced Canada to confront its lack of infrastructure, specifically pipelines.Alberta produces 4.3 MMb/d of crude oil but can “incrementally increase” that output to 6 to 7 MMb/d and could boost it to as much as 8 to 9 MMb/d, Jean said, noting “if there is going to be a dramatic change” fostered by Trump’s tariffs, “it will be Canada finds other markets.”
Korea and Japan want Canadian natural gas and “European nations have approached us,” he said. “The truth is, we’re looking in every direction right now other than the United States.”
“To get that done, we need more egress” via pipelines east to Hudson Bay and west to the Pacific coast, he said. “This is a conversation we were not having three months ago.”
“That conversation should have happened 10 years ago,” Young said.
Jean said he is optimistic that the United States and Canada will resolve the dispute, but said issues can be settled without disruption that has real impact on lives on both sides of the border.
Asked if he has a solution, he said, “Sure. Drop your tariffs and let’s get back to business.”
There is no chance at all that Canadians want to be the “51st state,” Jean said, adding, “But the truth is, the Republicans would never get elected again” if Canadians were added to the U.S. electorate.
Before the press conference, Jean was joined by Saskatchewan Premier Scott Moe, Ontario Energy and Electrification Minister Stephen Lecce, and Asokan Generational Developments LTD Founder and President Justin Bourque in a discussion moderated by S&P Global Commodity Insights Centre of Emission Excellence Director Kevin Birn, also a native Canadian.
The overall tenor was befuddlement at what, exactly, President Trump seeks to achieve with his tariffs.
Moe said Canadians are disturbed and angry at Trump’s “51st state” taunts and wondered why he is insulting a nation that sees the United States as its “greatest friend and ally” for more than 150 years.
He wondered where the United States would get many critical minerals needed for the emerging digital economy and national security. Saskatchewan itself provides more than 20 percent of the world’s uranium.
Lecce was outspoken in criticizing what he called a “very unjust attack on the Canadian economy,” noting “9 million Americans woke up today” with electricity “because of the U.S.-Ontario economic relationship.”
The 25-percent tariff on aluminum is particularly unsettling, he said. “Sixty percent of aluminum” used in the United States is coming from Canada, Quebec specifically. There’s no immediate replacement for that.”
Lecce said the aluminum tariff will raise costs for food and a wide range of products. “Everything is going to go up as a consequence, it seems contrary to the objective of people in government, which is to make life more affordable,” he said.
Aluminum and other metals imported from Canada are vital to national security, Lecce said. “We’ve spoken to the Department of Defense in the U.S., [they’re] longing for more titanium and lithium and hydrate, nickel and cobalt.”
The United States has “a binary choice,” he continued. “Fundamentally, it’s either you’re buying from your democratic partner, a stable friend that has been by your side during the darkest days in America, or you’re buying from Vladimir Putin.”
Lecce said in a way, the trade dispute has given Canadians a gift.
“President Trump’s objective is division” and it’s backfired, he said. “I mean, in my time on Earth, in my country, I have never seen Canadians more united. I mean, obviously, this has been an incredible moment for patriotism, nationalism, and a resurgence … a nation-building moment.”
