In the aftermath of the US election victory, Donald Trump has humorously labeled Justin Trudeau, Prime Minister of Canada, as the governor of a conceivable 51st US state. In the mix, Trump has also raised concerns about tariffs and expressed dissatisfaction over perceived trade imbalances with the neighbour up north. Pierre Poilievre, though, the Conservative leader viewed as the top contender to Trudeau in the upcoming election, keeps a positive outlook. He believes that despite these complexities, he is capable of boosting Canada’s exports to the US and clinch an excellent deal with Trump.
During an interview, Poilievre unfolded a preliminary pitch to the newly-elected US President. If voted into power, Poilievre revealed his intent to expedite the approval process for the establishment of oil refineries, liquefied natural gas plants, nuclear facilities and hydro power. He opined that Canada can potentially increase the electricity surplus it has with the US, vital for running data centers crucial to the burgeoning field of artificial intelligence.
As he points out, when observing Trump’s pattern of negotiation, it is clear that he is assertive and driven towards victory. However, he also acknowledges when a win-win scenario emerges. ‘Based on this,’ says Poilievre, ‘I believe we can reach an agreement benefiting both nations, making them safer, wealthier, and more robust.’
Yet, Poilievre mentions something Trump should realize – that Canada currently sells its oil and gas to the US at substantial markdowns. He reveals, ‘It is indeed a form of exploitation – but regrettably, it’s Canada exploiting itself.’ He candidly discusses the existing US trade deficit in goods with Canada, which stood at $50.5 billion for the first ten months of that year.
The deficit would have been even more substantial if not for the fact that Canada sells its crude at a discounted price to US refineries, notably those in the Midwest. The reason behind this lowered pricing is due to Canada’s limited alternatives for selling its oil. The country presently has a singular oil-export pipeline leading to a coastal port in British Columbia and is just now developing a liquefied natural gas industry with sufficient capacity to transport significant quantities of gas to Asia. As a result, most of the fuel is directed southwards.
Offering a frank view, Poilievre said, ‘That is the true, albeit regrettable, narrative behind our trade surplus. We’re basically giving away our resources in an unintelligent manner. However, the blame lies on our own actions, not on the Americans. Once I hold office as the prime minister, these self-detrimental practices will cease.’
Poilievre concedes that Trump’s annoyance with the US trade deficits with China and Mexico is understandable, considering these situations lead to job displacement within the US. However, he believes that the trade deficit with Canada is of a different sort. According to the Conservative leader, it’s fuelled by the sale of commodities that are abundant in Canada and required by the US, and these transactions end up supporting American jobs involved in downstream processing.
‘The last thing he should entertain is the idea of halting the inexpensive Canadian energy supply flowing into his market,’ Poilievre expounds. ‘Instead, I’d encourage him to greenlight the Keystone pipeline,’ he added, speaking about the major Keystone XL project which was designed to transport around 800,000 barrels per day from Alberta’s oil sands to southeast Nebraska, where it would connect with existing pipelines.
President Joe Biden, however, pulled the plug on a pivotal permit for the Keystone project shortly after his grand entry to the Oval Office in 2021. This essentially put it on the back burner. Although Trump agrees with the idea of the Keystone XL, there are yet no indications that South Bow Corp., the owner of the Keystone system, has plans to resurrect the project.
In hypothetical scenarios where Trump obstructs Canada’s trade surplus with the US immediately, American refinery workers would face job loss and consumers would encounter elevated prices, as per Poilievre. Instead, he advocates for Canada to amplify the extraction of resources like critical minerals. This could elevate the wealth of both nations while reducing their reliance on supply from adversarial countries such as China.
He also shared that he has conducted discussions with the conservative leaders of Alberta and Saskatchewan, both of which are rich in hydrocarbons. He has urged them to be prepared to fast-track approval for resource projects. Poilievre also emphasised that he would address US concerns pertaining to border trafficking and military spending, underlining that a Conservative government would reinvest the anticipated gains from his energy export strategy in Arctic security.
Trump has recurrently expressed his annoyance about the US being given the rough end of the stick by its allies, pointing out that Canada’s defense spending significantly falls short of NATO’s set target of 2% of GDP. Poilievre, however, perceives an optimistic flip side. ‘By increasing free trade with the world’s largest economy, we can fund a more robust military and continental defense. It’s a win-win outcome,’ he noted.