The premier of Canada’s largest province said Wednesday he will cut off energy to the United States if President-elect Donald Trump imposes sweeping tariffs on all Canadian products.
Trump has threatened to impose a 25% tax on all products entering the U.S. from Canada and Mexico unless they stem the flow of migrants and drugs.
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“We will go to the full extent depending on how far this goes. We will go to the extent of cutting off their energy,” Ontario Premier Doug Ford after meeting with Canadian Prime Minister Justin Trudeau and other provincial premiers.
Ford said “100%” the tariffs are coming.
“We will use every tool in our tool box to fight back. We can’t sit back and roll over. We just won’t as a country. And isn’t this a shame, our closest friends and allies,” Ford said.
About 60% of U.S. crude oil imports are from Canada, and 85% of U.S. electricity imports as well.
It wasn’t immediately clear if Ford was talking about all Canadian provinces cutting off energy exports to the U.S. or just his province. But a spokesperson for Ford, Grace Lee, said it was raised in the call between Trudeau and the provincial premiers.
“Premier Ford can only speak on behalf of Ontario, but it’s an area of provincial jurisdiction that we would certainly look at,” Lee said in a email.
Ford’s threat to cut off Canadian energy exports to the U.S. comes amid years-long treaty negotiations between Trudeau’s government and outgoing President Joe Biden’s administration over Michigan Attorney General Dana Nessel’s efforts to shut down Enbridge Inc.’s Line 5 oil pipeline that carries Canadian oil and natural gas liquids across Michigan’s Upper and Lower peninsulas.
Line 5 supplies light sweet crude oil to refineries in Michigan and Ohio, but crosses the St. Clair River and sends most of its petroleum to refineries in Ontario. The Canadian-owned pipeline carries 540,000 barrels of petroleum daily across Michigan through a 30-inch diameter pipe, crossing the Straits of Mackinac within twin 20-inch diameter pipelines at the bottom of the lakebed. Nessel and environmental groups contend the pipeline is an ecological hazard to the Great Lakes should it ever rupture.
“Canada and the U.S. share a highly integrated energy system that supports both economies and jobs on both sides of the border. There are also mutual security interests when it comes to energy,” Enbridge said Wednesday night in a statement to The Detroit News.
“Currently more than 20% of all trade between the two countries is energy-related and more than 90% of that is related to oil, petroleum products and natural gas. The relationship between Canada and the US is key to both energy supply and security, and essential to maintaining U.S. competitiveness and providing people with the energy they need,” the Calgary-based pipeline company said, adding that it looks forward to working with the new Trump administration “to ensure that Americans have access to affordable, reliable sources of energy.”
‘Other ideas were discussed’
Lee, the Ontario premier’s spokesperson, noted 49% of Ontario’s electricity exports were to Michigan and said Ontario is also a major electricity exporter to Minnesota, New York and Michigan.
Patrick Anderson, CEO of East Lansing-based Anderson Economic Group, said economists have been considering potential effects of sweeping tariffs on both Canada and Mexico since Trump threatened them last month while rallying against the countries’ immigration policies.
“It is clear that Michigan is one of the most vulnerable states in the country to tariffs, including any kind of trade war between the United States and our very close trading partner, Canada,” Anderson said. “A huge amount of trade goes back and forth between the borders of the United States and Canada, especially in the auto industry, and has for decades.”
Anderson added: “Certainly, I hope that this rash statement by the Ontario premier is not one that ends up coming fruition because it would be extremely damaging to Canada, for whom energy is one of their largest exports, and would have a negative but much more moderate effect on the U.S.”
Canada also is the largest foreign supplier of steel, aluminum and uranium to the U.S. and has 34 critical minerals and metals sought by the Pentagon.
“Canada, of course, will respond to unjustified tariffs,” Deputy Prime Minister Chrystia Freeland said after the meeting.
Freeland said a number of provincial premiers voiced support for a robust response to tariffs imposed by a new Trump administration, including critical minerals that are exported to the U.S. She didn’t specifically mention oil.
“Obviously other ideas were discussed as well,” Freeland said when asked if Canada is considering cutting off energy exports to America.
About a third of Canada’s trade to the U.S. is energy.
The premier of Alberta, which has the vast majority of Canada’s oil supplies, didn’t immediately comment after the meeting.
Nearly $3.6 billion Canadian ($2.7 billion U.S.) worth of goods and services cross the border each day, with Detroit’s Ambassador Bridge being the busiest trade crossing in North America. Canada is the top export destination for 36 U.S. states.
Trudeau said this week tariffs would be “absolutely devastating” for the Canadian economy, but it would also mean real hardship for Americans.
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Economists say companies would have little choice but to pass along the added costs, dramatically raising prices for food, clothing, automobiles, alcohol and other goods.
The Produce Distributors Association, a Washington-based trade group, has said tariffs will raise prices for fresh fruit and vegetables and hurt U.S. farmers when the countries retaliate.
Trudeau said this week the government is still mulling over “the right ways” to respond, referencing when Canada imposed duties in 2018 against the U.S. in a tit-for-tat response to new taxes on Canadian steel and aluminum.
Canada’s central bank, meanwhile, lowered its key interest rate by half a percentage point on Wednesday and called Trump’s threat to impose sweeping new tariffs on Canada “a major source of new uncertainty.”
The Bank of Canada’s decision marked the fifth consecutive reduction since June and brings the central bank’s key rate down to 3.25%. Forecasters were widely expecting a big rate cut after the November labor force survey showed the unemployment rate rose to 6.8%.
Governor Tiff Macklem said in his prepared statement that the central bank opted for two large rate cuts in a row because inflation and economic growth don’t need to be restricted anymore. With inflation back at the 2% target, the central bank is now focused on keeping it there.
But the central bank noted a number of risks to the economy including Trump’s 25% tariff threat.
“We did underline that the threat of new tariffs on Canadian exports, particularly at the level suggested, that is a major source of new uncertainty,” Macklem said. “But the reality is we don’t know if those tariffs are going to be implemented.
“We don’t know if exemptions are going to be agreed on some parts, we don’t know at what level, we don’t know if Canada will take retaliatory measures.”
He said all those factors are important, adding it’s probably having some impact already.
Trudeau, meanwhile, got the attention of billionaire Elon Musk, a big supporter of Trump, with comments he made Tuesday about lamenting the fact that U.S. voters selected Trump over Kamala Harris as president.
“We were supposed to be on a steady if difficult sometimes march toward progress. And yet, just a few weeks ago, the United States voted for a second time to not elect its first woman president,” Trudeau said Tuesday night at a event sponsored by Equal Voice, an organization dedicated to improving gender representation in Canadian politics. “Everywhere, women’s rights and women’s progress is under attack – overtly and subtly.”
Musk said Trudeau is “such an insufferable tool” in a post on X.
“Won’t be in power for much longer,” he wrote.
Ford also criticized Trudeau for the remarks in their meeting with Trudeau on Wednesday.
“They are not helpful at all. It was brought up a couple of times in our meeting,” Ford said. “Donald Trump was elected democratically. If you like him or you don’t like him that’s not our issue. We elect Canadians and it was not helpful whatsoever. I’m sure the prime minister got the message loud and clear.”
Reprinted from The Detroit News
