Canada’s Trade with the U.S.: A "Great Deal" in the Making?
The trade relationship between Canada and the United States has been a topic of discussion for many years. While some argue that Canada is taking advantage of its resources, others believe that the country should focus on developing new markets and diversifying its exports.
Pierre Poilievre’s Energy Pitch to Trump
In an effort to address concerns about trade deficits and border security, Pierre Poilievre, the leader of the Conservative Party in Canada, recently made a pitch to U.S. President Joe Biden (although he was actually addressing Donald Trump). He argued that increasing Canadian energy exports to the United States would not only benefit both countries but also help to address concerns about border trafficking and military spending.
The Discount on Canadian Energy
Poilievre pointed out that Canada has few alternatives for exporting its resources, with only one oil-export pipeline in British Columbia and a developing liquefied natural gas industry. As a result, most of the fuel goes south, resulting in a discounted price for U.S. consumers. He argued that this is not a trade surplus but rather a sign of Canadian foolishness in allowing the sale of its resources at such low prices.
The Keystone Pipeline
Poilievre also suggested that Trump approve the long-running Keystone XL project, which would transport oil from Alberta’s oilsands to southeast Nebraska. This project has been stalled due to concerns about environmental impact and regulatory approvals. Poilievre argued that it is in the best interest of both countries for this project to move forward.
The Impact on American Workers
If Trump were to somehow block Canada’s trade surplus with the U.S., American workers at refineries would lose their jobs, and consumers would pay higher prices. Poilievre argued that instead of trying to limit Canadian energy exports, the two countries should focus on ramping up extraction of resources such as critical minerals that can benefit both nations.
Poilievre’s Plan for Energy Exports
The Conservative leader said he has been in talks with the conservative leaders of hydrocarbon-rich provinces Alberta and Saskatchewan about expediting resource project approvals. He believes that by increasing energy exports, Canada can get richer while weaning itself off supplies from unfriendly states like China.
Addressing U.S. Concerns
Poilievre also addressed concerns about border trafficking and military spending, suggesting that a Conservative government would invest the gains of his energy-exporting strategy in Arctic security. He believes that with more free trade between Canada and the United States, both countries can benefit while reducing their reliance on other nations.
Conclusion
The relationship between Canada and the U.S. is complex, and both sides have valid concerns about trade deficits and border security. Poilievre’s pitch to Trump suggests that by working together, both countries can create a "great deal" for themselves and their citizens. However, it remains to be seen whether this proposal will gain traction in Washington.
Sources:
- Posthaste: Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.
- Bloomberg.com
This article is meant to provide an overview of the complex issues surrounding Canada’s trade with the U.S. It is not intended to be a comprehensive analysis or a recommendation for investment or policy decisions.
