Alberta oil industry, experts react to threat of 10% tariff on Canadian oil

Impact of Potential 10% Tariff on Canadian Oil by U.S. President Donald Trump

Experts and professionals in the Alberta oilpatch industry have voiced concerns over U.S. President Donald Trump’s proposed 10 per cent tariff on oil imports from Canada. While this move is seen as less severe compared to the initially proposed 25 per cent tariff on other goods, it still raises apprehensions about its potential negative effects on both the industry and American consumers.

Canada stands as the primary source of oil imports for the United States, accounting for 60 per cent of crude oil imports in 2022, followed by Mexico at 10 per cent. The announcement of the tariff has prompted responses from key figures in the industry, including Premier Danielle Smith, who emphasized the detrimental impact on consumers, workers, and businesses on both sides of the border.

Richard Masson, an executive fellow at the University of Calgary, highlighted the interconnected nature of the energy systems between the two countries. He expressed concerns about the implications of tariffs on oil imports and the uncertainty surrounding who would bear the brunt of the costs. Despite this, he acknowledged that a 10 per cent tariff is a more favorable outcome than a higher percentage.

Deborah Yedlin, the president and CEO of the Calgary Chamber of Commerce, raised questions about the motivations behind the tariffs and their potential inflationary impact on businesses in both countries. She emphasized the need for clarity and information to assess the full extent of the repercussions.

Paul Colborne, the president and CEO of Surge Energy, viewed the 10 per cent tariff as manageable for the company due to proactive measures taken to mitigate risks. He credited diplomatic efforts for securing a lower tariff rate and stressed the importance of diversifying markets for Canadian oil exports.

Strategic Responses and Diplomatic Efforts

Adam Legge, president of the Business Council of Alberta, highlighted the importance of diplomatic engagements to address concerns raised by President Trump. He emphasized the need to demonstrate the value of the trade relationship between Canada and the U.S. and cautioned against implementing measures that could harm long-term economic prospects.

Former CEO Richard Masson echoed the sentiment, emphasizing the ongoing efforts to dissuade the U.S. from imposing tariffs and the importance of presenting a compelling case to protect consumer interests.

Colborne advocated for expanding market opportunities beyond the U.S. and emphasized the significance of pipeline infrastructure to access new markets. He called for continued efforts to diversify exports and reduce dependency on a single market.

As the industry navigates the implications of potential tariffs, stakeholders are urged to prioritize collaboration, diplomatic negotiations, and strategic planning to mitigate the impact on businesses and consumers in both countries.