Alberta Premier Smith Responds to Trump’s ‘Subsidy’ Question, Highlights Canada’s Role in US Economy

Alberta Premier Danielle Smith answers questions at a news conference in Calgary on Feb. 1, 2024. The Canadian Press/Todd Korol

Alberta Premier Danielle Smith says Canada’s role in supplying raw materials essential to the U.S. economy explains the trade deficit the country has with its northern neighbour as President-elect Donald Trump asked why his country is continuing to “subsidize” Canada.

Smith made the remarks in a Dec. 18 social media post in response to Trump’s comments on Truth Social in which he once again repeated his call for Canada to be the 51st U.S. state.

“No one can answer why we subsidize Canada to the tune of over $100,000,000 a year? Makes no sense!” Trump wrote. “Many Canadians want Canada to become the 51st State. They would save massively on taxes and military protection. I think it is a great idea. 51st State!!!”

Smith said Trump has a fair question on the “trade deficit with Canada.”

According to the U.S. Bureau of Economic Analysis, the trade deficit with Canada amounted to US$67.9 billion ($91.6 billion) in 2023. Meanwhile, Statistics Canada estimates last year’s surplus with the United States at US$80.5 billion ($108.6 billion). Trade data reported by the two countries varies due to differences in assumptions.

Smith said, “The reason for this is because Canada (especially Alberta) sends billions of raw materials (oil, gas, minerals, grain, livestock, timber, etc) to your U.S. refineries and factories which your great American companies and workers upgrade and sell around the world, including back to Canada,” adding that Canada is the United States’ largest customer by a wide margin.

Smith said that millions of U.S. jobs and companies rely on affordable raw materials from Canada “to make trillions of dollars of wealth in your country.”

The premier also highlighted the longstanding positive relationship between the two countries. “We have fought and bled together in many wars, and built an incredible alliance and partnership,” she wrote.

Trump has pledged to impose a 25 percent tariff on all products from Canada and Mexico when he takes office in January, unless the two countries curb the flow of illegal immigration and drugs across their borders.

Smith has expressed Alberta’s willingness to work with the United States and strengthen trade. The province ships more than 4 million barrels of oil and gas to the United States daily, the premier noted.

Last week, the province announced a $29 million security border plan to address Trump’s concerns. Smith has also spoken to U.S. media, reiterating the province’s willingness to work with the incoming administration. The federal government also announced $1.3 billion in funding this week to further secure the border.

“I really hope we can strengthen that partnership throughout your presidency by securing our shared border as you’ve requested and partnering to protect our North American workers from unfair Chinese trade practices,” Smith wrote in her Dec. 18 post.