Diane Francis: Why we should tax energy exports to the U.S.

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeDiane FrancisDiane Francis: Why we should tax energy exports to the U.S.Trump believes that because Canada is much smaller, it will roll over. But he’s wrong. Canada has cardsAbout 60 per cent of America’s oil and 98 per cent of its natural gas imports come from Canada. Photo by POSTMEDIA NEWS ARCHIVESCanada is economically and militarily interdependent with the United States, and Donald Trump is being a bully. He has launched an economic war with his northern neighbour that, like his war with Iran, will become a stalemate. He believes that because Canada is much smaller, it will roll over. But he’s wrong. Canada has cards.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountCanadians are upset with his “51st-state insults” and the majority support retaliation. Canada is an energy powerhouse and should impose export taxes on what it sells to the U.S. until Trump backs off. About 30 states trade or import electricity from Canada.Most vulnerable are Vermont, New York, Maine, Michigan and Minnesota, which rely on cross-border power grids. But fossil fuels are Canada’s biggest energy export. About 60 per cent of America’s oil and 98 per cent of its natural gas imports come from Canada. Export taxes on our energy would increase prices for consumers and businesses and hurt the U.S. economy.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againCanada also provides 80 per cent of America’s potash, an essential fertilizer. An export tax on the critical mineral would raise costs and reduce incomes for the country’s beleaguered farmers — and leave America without a viable alternative to boot. The only other sources are Russia, Belarus and China.Trump threatens 50 per cent tariffs on Canadian-made vehicles, parts and steel, but this plan will boomerang badly, hurting American consumers and its “Big Three” car giants — General Motors Co., Ford Motor Co. and Stellantis NV (parent of Chrysler, Dodge, and Ram).The Big Three have invested hundreds of billions of dollars in building factories in Canada, mostly in Ontario. This investment was devised to take advantage of Canada’s lower energy and labour costs — the latter being US$20-an-hour less in Canada, mostly because healthcare costs are borne by all Canadian taxpayers, not paid by corporations.This integrated supply chain has made cars cheaper for consumers on both sides of the border, and dismantling the industry would force massive write-downs for American companies and raise car prices for everyone.(Interestingly, Trump’s team asked for a carve-out from tariffs for the big truck manufacturers in Ontario, but Ottawa astutely refused. Canada’s truck plants produce vehicles that are wildly popular among MAGA followers — notably Silverados and Ford Super Duty trucks — and produce most of the parts for Ram and others.)Another card Canada has played is to impose $20 billion in tariffs on goods produced in states that are solidly Republican or have hotly contested political races. The affected products include processed cheese from Wisconsin, seafood from Maine, and washers and dryers from Kentucky.Ontario and some other provinces have kept their shelves empty of U.S. alcohol products, including Kentucky bourbons, Tennessee whiskeys, California wines, and all beer and ready-to-drink cocktails.These Canadian tariffs underscore the fact that American industries are collateral damage as a result of Trump’s tariff tirade.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.A recent poll by CBS News/YouGov showed that 62 per cent of Americans oppose new tariffs against Canada and 38 per cent approve. California Governor Gavin Newsom is one many leaders who posted: “Our closest ally. Our critical trading partner. And Trump is hitting Canada with 50 per cent tariffs. What the actual f*ck are we doing?”Trump’s style of negotiation — which includes trash-talking — has backfired. He belittles Canada and demotes the Prime Minister to “Governor Carney.” He tells fibs and claims Canadians want to join the U.S., but the facts are that few, if any, are attracted to America’s awful healthcare system, crime and poverty rates and political gridlock — not to mention its current leader, President Trump.Unfortunately, neither side will win this trade war. Canada is one of America’s biggest suppliers and customers and vice versa, which guarantees that a lengthy trade war will cause inflation and unemployment in both countries. If the conflict lasts more than a few months in its current form, Canada will go into a recession, further damaging the U.S. economy and disrupting supply chains.Canada’s federal government failed to address our U.S. dependency for decades and did not aggressively develop resources, exports, nor the military. Now Ottawa scrambles. On Aug. 24, I crossed the U.S.-Canada border by car at the Peace River Bridge. Instead of long lineups, there were only a handful of cars and virtually no trucks lined up in either direction. It was grim evidence of an intensifying trade war that no one will win.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.