PODCAST | Chats on U.S. relations
Canada’s trade and international relations were thrown into flux this year. As the world economy was shaken by tariffs, many of Western Canada’s key industries worried about the effects.
To unpack these concerns, Gary Mar, the President and CEO of the Canada West Foundation, sat down with Canadian Senator Andrew Cardozo for a wide-ranging interview about U.S. relations, trade diversity, energy, agriculture and more.
Q&A with Senator Andrew Cardozo
Here are some of the key takeaways from the conversation. The questions and answers have been edited for grammar, style and brevity.
Cardozo: Following the election of President Donald Trump in the United States, what challenges are facing Western Canada as a whole, and each of the four western provinces specifically?
Mar: Here in Western Canada, the things that we’re most trade-exposed to would include agriculture and energy in particular. Those are huge exports that we have. The four western provinces, particularly Alberta and Saskatchewan, are very focused on energy, but the three prairie provinces are really trade-exposed generally in the area of agriculture as well.
And British Columbia, it’s a little bit different; they’re not as trade exposed as the other provinces, but they’re still concerned about whether or not, for example, cruise ships will stop in British Columbia on their way to Alaska. So, there are all kinds of things that we need to work on collectively to try and diminish the impact of some of the policies that President Trump is proposing.
Cardozo: What do we need to do to really diversify trade?
Mar: We’ve expanded our trade with a lot of other countries, but the United States trade has continued to grow. About 3/4 of our exports go to one marketplace, the United States. And because of that, we get paid a discount on our commodity. The expansion of the Trans Mountain pipeline adds another roughly 900,000 barrels of oil that can go to tidewater in Vancouver. That’s a good thing because it opens up other marketplaces. We had LNG Canada finally come online and start delivering natural gas, and it has the potential to go to other parts of the world as well.
But know that geography plays a huge role in who you trade with. There’s a reason why we’ve benefited from trade with the United States – the largest, wealthiest marketplace in the world. And that’s because we share a huge border with them. So, the United States will always be our biggest trade partner even as we expand into other places.
Cardozo: How far do you think we are down the road of getting rid of interprovincial trade barriers?
Mar: The easy things have been done already. I think there’s still lots that needs to be done that may be harder. There have been many efforts over the years to try and knock down these barriers, including the Canadian Free Trade Agreement. Not many teeth to that legislation. Sometimes a province may be brought forward on a complaint, but there are no consequences for failing to comply. So, they’re largely ignored. We’ve got a way to go, but the easy things have been done already. Now it’s down to hard things.
Cardozo: How does agriculture factor into diversifying trade?
Mar: I think that we should be very proud that we’re one of only half a dozen countries in the world that are food secure. In other words, we produce much more food than we consume. And I think that that is an important role that Canada has. Every farmer in this country has a role in helping to feed the world.
And we can be doing more in agriculture to help make the world safer because every country in the world is just a few missed meals away from the start of a revolution. We can help change that equation with agriculture, agricultural technology, fertilizer, potash. Many Canadians don’t know how important our potash is to other parts of the world, including the United States. Probably 80 per cent of their potash comes from one place, and that’s Saskatchewan.
Cardozo: How does the export of canola factor in?
Mar: A lot of canola was going to China, but now, because of the tariffs that Canadians have placed on electric vehicles from China, China responded very strategically by putting barriers on canola. This is a real issue. The economic interest of nascent technology like EV batteries in Ontario is being supported by the federal government. But the sacrifice is being made by agricultural communities here in Western Canada.
Canola is an interesting one because some of the canola can actually be crushed, which is one of the things that Premier Scott Moe of Saskatchewan has done a good job of, and that crushed product is going into the United States for the production of renewable biodiesel. So, there are some things that we’re able to upgrade the value on and sell them somewhere other than China. But there’s no doubt that agriculture and seafood products out of British Columbia have suffered greatly as a result of pushback by the Chinese government against some of our imports into their country.
Cardozo: How should Canada be thinking about the future of energy exports?
Mar: We should be embracing the export of energy. And this goes to my view that Canada can play an important role in making the world greener. If all we did was move natural gas to places to displace the use of coal, we would dramatically reduce the amount of greenhouse gases (GHGs) into the atmosphere. Now you create some GHGs while producing the natural gas, but you have a net reduction of GHGs when it’s used to displace coal.
So, there’s a great case to be made, and the reality is that we need all forms of energy going into the future. It’s not just wind and solar. It’s all of the above. It’s uranium that comes from Saskatchewan. It’s oil and gas that comes from northeastern British Columbia, Alberta and Saskatchewan. We need all of those forms of energy in order to keep the world safer.
Cardozo: How has Prime Minister Mark Carney’s government approached the challenges we’ve discussed?
Mar: I’ve spoken to the Prime Minister and I’ve talked to Minister Tim Hodgson, the Minister of Natural Resources Canada, and I’ve seen his commentary here in Calgary. I think that people in the energy business are hopeful based on what they hear; they will be optimistic based on what they see. And there are signs like Bill C-5 that suggest that the Prime Minister is authentic when he says he wants Canada to be an energy superpower, including in traditional oil and gas.
The conversation was featured as part of Senator Andrew Cardozo’s Chats on Canada/U.S web series.