An Alberta-based trade analyst says Canada needs to exempt oil from any retaliatory tariffs the federal government might impose in reaction of those slated to be slapped on products from north of the 49th Parallel by the United States.
The federal government is vowing retaliation, with Foreign Affairs Minister Melanie Joly saying Monday that Ottawa is ready with $155 billion in tariffs on U.S. products.
Carlo Dade, the director of international policy at the University of Calgary, said Monday additional tariffs on energy would make a bad situation worse, arguing Canada can’t inflict enough economic pain on its large southern neighbour to get out of it.
“We need to see oil exempted from retaliation,” Dade told CTV News Edmonton.
“We are just going to have to bear with this. We are in a whole new world with Donald Trump, one that the first administration didn’t prepare us for.”
Trump, the U.S. president who took office at the end of January, previously promised 25 per cent tariffs on all Canadian goods and 10 per cent on energy, including oil, gas and electricity.
He said Monday afternoon the tariffs on both Canada and Mexico will be put in place on Tuesday.
Trump says part of the reason why his country is applying tariffs is vast amounts of fentanyl flowing into the U.S. from Canada, Mexico and China.
The imposition of tariffs come after Alberta spent $29 million on a new team to patrol its 298-kilometre border with the U.S. state of Montana and after Canada named a fentanyl czar to oversee the fight to stop drugs from flowing across the border.
Charles St-Arnaud, the chief economist for Alberta Central, said Monday he predicts the province’s Gross Domestic Product could drop by two per cent, with layoffs expected, if the tariffs are prolonged.
Alberta Central is the central banking facility and trade association for the province’s credit unions.
“We knew, even though we have lower tariffs on energy prices and because it’s our main export, it means that it’s maybe a positive in some ways, but we have to also take into account that we export a third of our GDP to the U.S., so even 10 per cent on one of our biggest exports still makes Alberta one of the most affected provinces in Canada,” St-Arnaud told CTV News Edmonton.
He said one of the biggest uncertainties is for how long tariffs might last.
“Are we talking a month or days, months, years?” St-Arnaud said. “That will be a big difference.”
St-Arnaud said while Alberta might escape a recession, tens of thousands of jobs could be lost if 25-per-cent/10-per-cent tariffs lasted for a full year.
“In Alberta, that (would) basically mean no growth and a decent amount of layoffs,” he said.
“We could be talking about 25,000 to 35,000 workers losing their jobs this year.”
