Nobody really knows exactly what Donald Trump is going to do once he fully takes over the levers of power of the largest economy in the world. But if there’s one thing for sure, the whole world is watching, Alberta included.
On Thursday, Alberta Premier Danielle Smith announced the province had signed on to the Governors’ Coalition for Energy Security, the first non-U.S. jurisdiction to be a part of the pact. With a dozen states having established the group in September with the goal of ensuring energy security, lowering energy costs, increasing reliability and bolstering sustainable economic development, it could be an important step for the province as it prepares for whatever is coming from the Trump administration.
Trump campaigned on across-the-board 10-per-cent to 20-per-cent tariffs on all imports to the U.S. – a move that could include oil and gas. And if he follows through on that promise, Smith might be banking on these new ties to a coalition of governors who hopefully share Alberta’s plans for its resource-reliant economy.
As The Globe’s Emma Graney reported Thursday, “the coalition’s goals echo the recent talking points of Alberta’s United Conservative government, particularly in response to policies floated by Ottawa, including the proposed oil and gas emissions cap and clean electricity regulations.”
And with Canada set to renegotiate the North American free trade deal between it, the U.S. and Mexico, these partnerships could be helpful, said University of Calgary professor Trevor Tombe. He said similar agreements in 2017 proved beneficial in the last round of negotiations.
“It might help prevent what would be a really devastating policy move in the States from being enacted in the first place,” he said.
Alberta accounts for 56 per cent of all oil imports to the U.S. – twice as much as Mexico, Saudi Arabia and Iraq combined, so any smoothing of trade barriers could have a major effect as the province hopes to try and ensure energy is excluded from potential tariffs.
But as The Globe’s Kelly Cryderman argued in her column this week, gasoline prices will weigh on Trump.
President Joe Biden did his best to keep gas prices in check, and Trump, who has promised to halve energy bills, “will also do what he must to keep gasoline prices steady, including making sure that his country has enough diluted bitumen from Canada.”
In an interview, Eric Nuttall, a partner and senior portfolio manager with Ninepoint Partners LP, said tariffs are not inevitable for Canadian oil and gas, and in reality, it “makes absolutely no sense.”
So any chance for Canada to remind the U.S. that its energy independence relies on its northern neighbours is worthwhile.