Danielle Smith Warns Carney: Cutting Off Alberta Oil Would Devastate Canada [VIDEO]

Adriana Stone 0 3 min read

Danielle Smith Warns Carney: Cutting Off Alberta Oil Would Devastate Canada (VIDEO)

Canadian Prime Minister Mark Carney walked away from trade talks with the United States after negotiations reportedly broke apart Friday night. He also threatened retaliation against American goods and raised the possibility of targeting Alberta’s oil exports.

Alberta Premier Danielle Smith says that would be a disastrous mistake. Her warning is direct: Canada depends heavily on the American market, and an attempt to punish the United States could quickly turn into an economic crisis at home.

The Trump administration is pushing for a more favorable trade arrangement with Canada and Mexico. President Trump refused to renew the existing USMCA framework and has used tariffs to force changes after arguing that the current setup has not provided enough benefit to American workers and businesses.

Washington’s complaints include Canada’s dairy system, where tariff-rate quotas and over-quota tariffs can approach 300 percent. The United States also objects to Canadian restrictions on American vehicles and wants stricter rules requiring more of a North American vehicle’s value to be produced in the United States.

American officials have also pointed to the treatment of U.S. alcohol exports. After earlier tariffs, most Canadian provinces stopped buying or selling American wine, beer, and spirits. U.S. alcohol exports to Canada reportedly fell 81 percent in one year. Vehicle exports also dropped about 22 percent, or $5.6 billion, after tariffs and quotas were imposed.

Carney has threatened measures aimed at industries including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. His threats have also included cutting off or taxing Alberta oil shipped to the United States.

Smith addressed the issue in a speech this week. She said Alberta oil is not just a provincial concern. It supports workers and businesses across Canada, while American refineries rely on the heavy crude produced in Alberta.

Smith’s full warning was blunt:

Mr. Speaker, although I understand the need to respond strongly to these tariffs, I cannot think of a more disastrous policy decision than cutting off or taxing Alberta’s oil to the United States. Doing so would absolutely devastate the Canadian economy. It would not only extinguish the livelihoods of hundreds of thousands of Albertans, it would economically hobble our friends and neighbors in other provinces to the east. Let me explain why, and it’s important that this be understood by every Canadian.

The Honorable Member for Ottawa— If Canada were to put, let’s say, a 50% export tariff on the 4 million barrels of oil that we export daily to the United States, the United States would immediately respond with a 50 to 100% export tariff on oil and natural gas that they export to Ontario, along with millions of barrels of diesel fuel and gasoline that Ontario and Quebec import from the Midwest.

This would bring the economies of Ontario and Quebec to a grinding halt.

Meanwhile, all those refineries in the United States that currently use Alberta’s heavy oil would start looking to Venezuela for replacement heavy oil and reverse the pipelines northward to get it to Midwest refineries.

As a result, we would lose the United States as a customer entirely and likely forever. This would result in the loss of about half a million jobs at a minimum, mostly in Alberta, but also hundreds of thousands of jobs in Ontario and Quebec.

And if we cut off our oil entirely, what then? The same results, but even worse. The United States would, of course, respond and cut off all gasoline and diesel from their refineries to Ontario and Quebec, right as we turn into fall and winter. And unlike Canada, the United States has strategic oil reserves that Canada does not. So although their gasoline prices will increase, they will be able to keep them at relatively manageable prices, just as they have done through the Iran War.

And without strategic oil reserves, Canada has no way to supply Ontario and Quebec with the oil, natural gas, and fuels that they would need in a timely fashion. The Toronto Stock Exchange would nosedive, along with millions of Canadians’ investments, particularly our seniors, and small and medium and large energy companies across Canada would shutter and lay off their employees, unable to find a market for their product. There is a better way forward.

Smith’s argument is that retaliation would not be a one-way exchange. If Canada imposed a 50 percent export tariff on the roughly 4 million barrels of oil sent to the United States each day, Washington could respond with tariffs on energy shipped to Ontario and Quebec.

That could put pressure on two of Canada’s largest provinces just as demand for heating fuel rises in the fall and winter. Smith also warned that U.S. refineries could replace Alberta’s heavy crude with oil from Venezuela and adjust pipelines to move that supply toward the Midwest.

Her central point is that Canada cannot easily replace the American market. Losing that customer could damage Alberta’s energy industry, hit workers in several provinces, weaken Canadian investments, and leave Ontario and Quebec scrambling for gasoline, diesel, and natural gas.

The video of Premier Smith’s remarks is available below.

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