Restricting Alberta energy exports to the U.S. is within Ottawa’s purview, experts say.
But recent comments suggest that move may be unlikely, even if it’s not “off the table.”
U.S. President Donald Trump does not appear to be backing off on imposing tariffs against Canada, set to be imposed as soon as Saturday. As the country contemplates how to respond, two federal ministers are signalling that a ban on Alberta energy exports may not be the best path to take.
“I would say that anything that we do has to be done in a thoughtful way, it has to ensure regional equitability and it also has to ensure that you’re not provoking long-term unintended consequences,” Energy and Natural Resources Minister Jonathan Wilkinson said on Wednesday.
“Any response needs to be done in a thoughtful way targeting products that will hurt Americans more than they will hurt Canadians.”
Two weeks ago, the federal government and most premiers appeared together to say they supported a joint response to the tariff threat, with Prime Minister Justin Trudeau saying “everything (is) on the table.”
Alberta Premier Danielle Smith did not appear with them, and issued a statement saying she opposed any plan that involves cutting off energy exports especially oil, gas or energy that comes from her province.
Labour Minister Steven MacKinnon echoed Wilkinson’s remarks on Wednesday, saying that if tariffs come into place, the government would need to support workers and industries, while retaliating.
“No one region, no one sector will suffer disproportionately should Trump decide to put tariffs on his closest ally and partner,” MacKinnon said in Edmonton.
The comments appear to suggest that Alberta energy may not be a primary focus of retaliation for Ottawa, but he added that doesn’t mean it’s completely “off the table.”
“I’m not saying that we are not going to look at doing that at all ever, but I would say in the context of thinking about how best to respond, it has to be done in a manner that is thoughtful, that actually doesn’t harm Canada’s long-term interests and as I say, that is regionally fair,” Wilkinson said.
Canada sends 75 per cent of all goods and services exports to the United States.
Canada has been the top source of U.S. oil imports for many years, and supplied more than half of the total U.S. crude imports in 2023.
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The Canada Energy Regulator is the federal body with authority to regulate energy exports and “authorizes oil exports by issuing short-term orders for periods less than one year for light crude oil and less than two years for heavy crude oil.”
It also regulates the export of natural gas and natural gas liquids.
“If a pipeline system crosses provincial or international boundaries, it is regulated by the CER,” the regulator states. “Pipelines which lie completely within the borders of a single province are regulated by that province’s regulatory body.”
The federal government also has the authority to issue export or import restrictions.
“Export and import restrictions aim to hinder the economy, or specific sectors of the economy, of the targeted country,” according to Global Affairs Canada information.
“They typically prohibit buying, selling or shipping identified goods to or from the country; for example, oil and petroleum products or certain telecommunication products.”
Canadian and American trade lawyer Mark Warner with MAAWLAW said when it comes to products crossing the border, the federal government has the ability to put rules in place.
“Fundamentally, the Constitution gives authority for things that are at the border, since they belong to the federal government,” he said. “The power of the federal government is at its maximum when the goods are crossing the border.”
While Parliament is prorogued, Warner noted a full export ban of oil could be done by an order-in-council by the cabinet, meaning it would not require a vote in the House of Commons.
Ontario Premier Doug Ford said after the provinces signed the agreement that he respected the position by Smith, but that “Canada comes first” because no region will be exempt from the impacts of Trump’s potential tariffs.
Trudeau noted Trump’s tariff threat and other comments targeting Canada appeared focused on the Ontario auto sector rather than Alberta oil and gas.
Trump has threatened to impose a tariff of 25 per cent on all products from Canada, though it’s still not clear how widespread it will be as the president did not sign any executive orders once sworn in to put said tariffs in place last week.
He has still stood by his widespread threat with the current date set for Saturday.
Smith has said she opposes not only a ban on Alberta’s various energy products, but also any potential tariff, telling reporters earlier this week that oil and gas is owned by the provinces.
She added that cutting off pipeline supplies from going into the U.S., would choke key supplies to Ontario and Quebec as well as it would be unable to flow through Michigan to reach the latter provinces.
Joe Calnan, energy security forum manager at the Canadian Global Affairs Institute, said it also could cause a bigger problem for Canadian producers if Canada were to put an import or export tax on top of the 25 per cent tariff proposed by Trump.
“If we put an export tax on top of that, then we’ll just be increasing the economic burden carried by Canadian producers without necessarily impacting U.S. refiners,” he said.
When the United States Canada Mexico Agreement (USMCA or CUSMA) on free trade was signed in 2019, it saw the U.S. drop the 25 per cent tariff Trump imposed during his first term on Canadian and Mexican steel imports and 10 per cent on aluminum.
A year later in 2020, Trump re-imposed another 10 per cent tariff on aluminum, though after Canada put its own retaliatory tariffs in place the president dropped it.
According to Brookings Institute, a non-partisan think tank in Washington, D.C., tariffs against either country would “undermine” the “key role of trade and investment across North America” that CUSMA stresses.
Though the institute adds with the agreement up for review in 2026, it is possible the tariffs could be a means for the U.S. to “extract concessions” from both countries prior to the review.
Calnan added if the federal government does go the route of an export ban or tariff, it should impress on Americans why it’s doing so.
“The most important thing we need to do is make sure that the American people know that if and when there are downstream consequences of these tariffs, to make sure that we’re communicating that the reason they’re paying more at the pump is because of the tariff, it’s not because Canada just wants to punish them,” Calnan said.