Relief in Alberta oilpatch as Trump tariffs fail to materialize … for now

January 20, 2025 Canuck

After weeks of concern, confusion, calls for unity and subsequent dissent, Canada received some clarity on freshly sworn-in U.S. President Donald Trump’s threats to enact widespread tariffs on Canadian imports on his first day in office.

On Monday morning, Reuters confirmed a Wall Street Journal report that stated Trump would issue a broad trade memo on Monday. It would stop short of imposing new tariffs on Trump’s first day in office.

Rather, it would direct federal agencies to evaluate the U.S. trade relationship with China, Canada and Mexico, according to Reuters, citing an incoming Trump administration official.

Trump had previously threatened a 25 per cent tariff on Canadian goods, and the Canadian government had threatened retaliation in response.

Alberta found itself square in the national headlines as inauguration day approached, for its chief export — energy is Canada’s largest export to the U.S., worth about $125 billion last year — and for its premier’s response to Canada’s plans to retaliate.

Alberta Premier Danielle Smith, who recently met with the president-elect, is in Washington, D.C., for the inauguration, as is a large Alberta contingent of government and industry officials. In recent days, Smith had rejected the idea of retaliating against Trump via energy export taxes or bans.

A woman and a man talk at a party. — Alberta Premier Danielle Smith speaks with U.S. president-elect Donald Trump at Mar-a-Lago, Trump’s Florida home. (Danielle Smith/X)

In a statement Monday on X, Smith wrote that Alberta was “pleased to see that today President Donald Trump has decided to refrain from imposing tariffs on Canadian goods at this time as they study the issue further.”

“We appreciate the implied acknowledgement that this is a complex and delicate issue with serious implications for American and Canadian workers, businesses and consumers given the integration of our markets along with our critical energy and security partnership,” the statement reads in part.

Smith was not scheduled to attend the inauguration in person as the event was moved indoors due to cold temperatures.

Smith is scheduled to take part in the Canadian embassy’s inauguration day event later on Monday afternoon and will attend the Republican Governors’ Association evening reception.

Oilpatch cautious but relieved

Gurpreet Lail, president and CEO of Enserva, an association representing oilfield service companies, is in Washington for the inauguration.

She said there’s relief in the industry that promised tariffs have failed to immediately materialize, but added Canada still needs to focus on what its strategy is going to be.

“How do we actually work together to strengthen Canadian infrastructure and strengthen our strategy? We can’t be on defence all the time,” Lail said.

“We need to be on offence, and to be on offence means we have to get to new markets and we need to create more jobs. We need to bring investment back into our own country.”

Mark Scholz, president and CEO of the Canadian Association of Energy Contractors, is also in Washington.

“I think this is a relationship that we have to really work at. We have to continue to promote the mutual benefits that trade provides the two countries. And we’re not going to take that for granted,” he said.

Tariff threat raised concerns in Alberta

Prior to Monday’s news, Alberta businesses were waiting with bated breath to see what would transpire as Trump’s plans came into focus, said Deborah Yedlin, the president and CEO of the Calgary Chamber of Commerce.

“What is going to be the impact on the Canadian dollar? How inflationary is this going to be?” Yedlin said Friday on the Calgary Eyeopener. “This is potentially going to cause the pocketbooks … to shrink. Our terms of trade will shrink, because our dollar will be affected.”

Though several factors could change things, an analysis by University of Calgary economics professor Trevor Tombe suggested that a 25 per cent, across-the-board tariff by the U.S. could shrink Canada’s economy by two to three per cent, and Alberta would be the province most exposed “by a wide margin.”

How Danielle Smith’s approach to Trump tariff threats is playing out in Alberta

3 days ago

Duration 3:45

A joint statement from Canadian premiers pushing back on Trump tariff threats did not include the signature of Alberta’s Danielle Smith. CBC Alberta editor and commentator Jason Markusoff says Smith’s ‘Alberta first’ approach isn’t being embraced by all Albertans.

In such a scenario there would be concern around employment, Yedlin said.

“We’re worried about what happens with companies that are still struggling with the impact of higher interest rates and debt levels, and now this is going to be another blow for them to navigate,” she said.

Oil industry groups like the Canadian Association of Petroleum Producers (CAPP) will be on the ground at the inauguration today. Last week, CAPP was one of five major Canadian energy industry groups that released a statement, announcing they had formed a joint working group to combat the threats of tariffs.

Canada’s agriculture industry was also bracing for the potential of punishing tariffs. Last year, Alberta’s agriculture exports to the United States were worth $8.9 billion.

“It has the potential to really be devastating for our industry in Canada,” Keith Gregory, chair of the Alberta Cattle Feeders’ Association, told CBC News last week.

CBCNews.ca, the CBC News app and CBC Gem will carry the CBC News Special: The Inauguration of President Donald J. Trump, hosted by chief correspondent Adrienne Arsenault live from Washington, starting at 8 a.m. MT.

You can view the livestream everywhere you stream CBC News: on CBC Gem, the CBC News app, the CBC News YouTube channel and on your smart TV.

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