As the deadline for possible tariffs on Canadian goods nears, Alberta’s economy is bracing for what could be a challenging few months. President Donald Trump has confirmed that 25% tariffs are set to be imposed starting tomorrow, February 1, marking a significant shift in U.S.-Canada trade relations.
The deadline for the 25% tariffs on Canada and Mexico, initially reported to be delayed to March 1, has now been confirmed to be set for February 1. White House Press Secretary Karoline Leavitt confirmed that the tariffs will indeed go into effect on Saturday, February 1, despite earlier reports suggesting otherwise. The tariffs will include a 25% levy on goods from Canada and Mexico, with a separate 10% tariff on China.
Despite the efforts of Canada’s Minister of Foreign Affairs, Mélanie Joly, to manage the diplomatic channels and address the looming tariffs, the federal government’s strategy of not having Prime Minister Justin Trudeau directly engage with President Trump has been a point of contention. Clearly, instead of opting for a public response, Trudeau should have sought to engage with Trump privately to address the concerns regarding the tariffs. White House Press Secretary Karoline Leavitt suggested that Trudeau would have been wise to speak directly with Trump before making public statements. By failing to prioritize a one-on-one conversation with Trump, the Federal government missed an opportunity to de-escalate the situation and could have avoided making it more challenging to find a resolution.
This latest development has created a ripple effect of uncertainty across Canada, with Alberta, in particular, poised to feel the impact due to its critical role in the energy sector. Here’s what we know so far about the tariffs, their potential impact on Alberta’s economy, and the diplomatic efforts underway to address the situation.
While the tariffs will affect a wide range of industries, Alberta’s oil and gas sector is especially vulnerable. Alberta is a major supplier of heavy crude to the U.S., and any tariffs placed on oil exports could disrupt not only Alberta’s economy but also the U.S. energy market.
The officials are concerned that the tariffs could lead to higher gasoline prices for U.S. consumers. Alberta exports about 24% of the oil that the U.S. needs and any disruption to this trade could have significant consequences. With the U.S. relying on Canadian oil to meet its refinery demands, Alberta’s energy exports are seen as a strategic asset. However, there are signs that oil could be exempted from the tariffs due to its importance to the U.S. economy.
Alberta Update
Alberta Premier Danielle Smith, who has been at the forefront of Alberta’s diplomatic efforts with the U.S., is focused on maintaining open communication to avoid a full-scale trade disruption. In the latest episode of Alberta Update, Premier Danielle Smith joined host Bruce McAllister for an in-depth conversation on the state of Alberta’s trade relations, particularly with the United States, and the issues that will dominate the province’s agenda as 2025 unfolds.
Smith addressed the high-stakes trade environment between Canada and the U.S., focusing on the looming tariffs that impact Canada and Alberta’s key industries. McAllister opened the conversation by discussing the three main issues currently dominating political discourse: trade, tariffs, and President Donald Trump. Smith confirmed the imminent threat of a 25% tariff if Alberta fails to address U.S. concerns by tomorrow, February 1.
“The deadline set for February 1, if we don’t show that we’re serious about stopping the flow of fentanyl and illegal migrants, would see a 25% across-the-board tariff. It looks like that’s coming based on the U.S. president’s recent statements,” Smith explained, acknowledging the gravity of the situation. This move, Smith noted, could severely disrupt Alberta’s economy, especially given the critical role of oil and gas trade with the United States.
The second deadline, set for April 1, would reassess the trade relationship with the U.S. and potentially bring additional tariff actions.
Throughout the interview, Premier Smith emphasized her diplomatic approach to managing Alberta’s trade relations with the U.S. She stressed the importance of maintaining open lines of communication with U.S. decision-makers, a strategy that has defined Alberta’s approach since 2005 when the province first established an office in Washington.
“My approach has been diplomacy because that’s been the Alberta way since 2005. We’ve built strong relationships and continuously work to de-escalate tensions,” Smith said. This diplomatic strategy has been critical, as the province works to prevent any further escalation of tariffs, which she believes would harm Canadian and American consumers.
Smith also pointed out that these tariff wars, if they continue, would have broader economic ramifications. “Tariff wars do not help anybody; they harm American consumers, and they harm Canadian consumers,” she explained, underlining the mutual detriment tariffs would bring to both countries. She emphasized the need for both sides to find common ground to avoid further damage to their intertwined industries.
Energy and the Pipeline Debate
A significant portion of the discussion revolved around Alberta’s energy sector, particularly the importance of pipelines in getting Alberta’s oil and gas to international markets. Smith expressed optimism that recent developments have made the country more aware of the need for pipelines, especially in the context of global energy trade.
“One hundred percent, the nation has indeed woken up to the importance of Alberta’s energy market and getting our product to other locations,” Smith asserted. She pointed to the push for greater energy export diversification, which has gained support in light of recent tariff threats from the U.S.
The Premier highlighted the cancellation of various pipeline projects, including Northern Gateway and Energy East, due to changing governmental policies and environmental concerns. “We had $176 billion worth of proposed projects that got cancelled because of the uncertainty created by various government laws,” she noted. Despite these setbacks, Smith remained hopeful, pointing to recent successes, including the completion of the Coastal GasLink pipeline and Trans Mountain pipeline expansion, as significant milestones in Alberta’s push to diversify its energy markets.
However, Smith couldn’t help but express frustration at what could have been. “It would have been nice if we’d been able to get some of those projects going,” she said, highlighting the opportunities missed due to policy-driven roadblocks. Despite these setbacks, she remained resolute in her belief that Alberta’s energy sector plays a pivotal role in the broader Canadian economy and must be prioritized in trade discussions.
Smith also took this opportunity to call for greater cooperation among Canadian provinces, particularly when it comes to facilitating trade. “What are we going to do to start doing more trade with each other? What are we going to do to stop blocking access to each other’s goods getting to market?” Smith asked, urging provincial leaders to work together in removing barriers to trade within Canada. She emphasized that addressing internal trade barriers is as important as negotiating external trade deals, especially as Alberta seeks to expand its export markets.
The Premier reiterated her focus on ensuring that Alberta’s products, especially energy, are not solely reliant on the U.S. market. “Our principal relationship is north-south rather than east-west with each other,” Smith said. This imbalance, she pointed out, leaves Canada vulnerable to unpredictable external pressures like tariffs. Alberta’s strategy moving forward is clear: diversify and ensure that trade flows freely domestically and internationally.
As Premier Smith continues to navigate the complex and often volatile terrain of international trade, her focus remains on strengthening Alberta’s position within Canada and on the global stage. She made it clear that the challenges of 2025 are far from over. Alberta will continue to engage diplomatically with the U.S. and other international partners while pushing for stronger internal trade policies to bolster the province’s economic resilience.
Smith concluded by stressing the importance of addressing the issues identified by the U.S., the flow of fentanyl and illegal migrants across the border, as key to resuming productive trade discussions. “We have to do more to demonstrate that we’re going to stop that flow if we’re going to get back to constructive trade conversations,” she said, calling for action from the federal government to help manage these challenges.