Commentary
Canada’s vulnerability as an energy exporter came into acute focus when President Trump began musing about applying tariffs to Canadian goods.
Canada could exert strong leverage in a potential trade war with the USA if it had a diverse customer base for its petroleum products. However, with 97 percent of its oil exports and 100 percent of its natural gas exports going to the United States, Canada can’t withstand tariffs or curtailment of exports for very long. Canada must diversify its customer base for petroleum products and do it soon.
With a buyer’s monopoly on Canada’s energy exports, the USA has enjoyed discounted oil from Canada for decades. In 2018, Canada was estimated to lose $50 million per day due to being forced to sell at a discount. That figure has grown as energy prices have climbed. Canadian oil and gas producers have long been trying to bring attention to these losses and highlighting the need for pipeline access to deepwater ports. But their pleas fell on deaf ears, as an ideologically driven federal government shut down pipelines, banned tankers, and regulated other energy projects out of economic viability….