U.S. isn’t the only nation flirting with trade wars | COMMENTARY

Canada is also having trouble.

Did you know there is an internal trade war brewing in Canada? It’s between Alberta and British Columbia over the building of an oil pipeline to the Pacific Ocean. Alberta makes a good income from its tar sands and wants to expand its customer base by shipping that oil overland through a pipeline to Burnaby, B.C. The British Columbia government objects due to the threat of environmental pollution and its anti-fossil fuel philosophy.

Alberta has retaliated by threatening to cut off crude and refined oil, gasoline and natural gas to British Columbia. This action would cause petroleum prices to rise in B.C. amounting to a 30 percent increase, according to an April 25, 2018 “Stratfor” article entitled, “In Canada, A Trade War Emerges.” This potential trade war highlights the governmental differences between Canada’s confederation and the U.S. where such issues are dealt with on the national level.

The impact of this dispute will be felt in both Canada and the United States and it foreshadows what could happen if the U.S. and China engage in a much larger trade war.

In Canada, provinces exercise more power and control than the national government in Ottawa. Alberta, the westernmost of the Prairie Provinces, contains 80 percent of Canada’s oil production and 95 percent of its petroleum reserves. It tends to represent what we would call a “red state” mentality in the Lower 48. Jobs and capitalism prevail. British Columbia, separated from the Prairie Provinces by the Rocky and Cascade mountain ranges, has much more in common with the “blue states” of Washington and Oregon, both geographically and philosophically. There, protecting the environment takes precedence, as do objections from what Canadians call “First Nation” concerns.

The long-term U.S. delay in building the Keystone XL Pipeline through the U.S. exacerbated the problem for Alberta to get its petroleum to market. Alberta wants a guaranteed and inexpensive way to ship its oil.

As long as the conservative Stephen Harper was Canada’s prime minister from 2006-15, the national government favored oil production, desiring to turn Canada into a petroleum superpower. In 2017, the political makeup of B.C. was drastically altered with the election of John Horgan, whose New Democratic Party formed a coalition with the Green Party.

The conservatives (called Liberals in Canada) proposed to increase oil shipments to the Pacific from 300,000 to 890,000 barrels per day. Horgan vigorously objected because he needs the support of the Green Party to maintain control of the B.C. parliament, according to “Stratfor.” In November 2017, the National Energy Board ruled that the pipeline company was under no obligation to heed Burnaby’s ordinances. Burnaby is a Vancouver suburb and the Pacific terminus for the proposed pipeline.

In an attempt to kill the pipeline project, Horgan tried to push through legislation to enact an environmental study with no definite dates for its completion. In retaliation, the prime minister of Alberta, also an NDP member, cut off electricity talks with B.C. and banned the importation of British Columbia wine. The oil pipeline company, headquartered in Texas, threatened to abandon the project unless the national government and the two provinces could come to an agreement by May 31. Saskatchewan, also an oil exporting province, jumped in on the side of Alberta, threatening to suspend shipments to the coast.

Prime Minister Justin Trudeau is seeking to reduce tensions, although he has publicly favored the pipeline. He got the two provincial prime ministers to meet but no deal was reached. Trudeau and the Alberta prime minister then offered to guarantee the financing for the project to assuage the pipeline company’s financial fears. There is much at stake here: 20 percent of Canada’s exports and 17 percent of Alberta’s gross domestic product originate from petroleum sales.

The debate between the various provinces and the national government shows no signs of abating as the May 31 date looms large. If this issue is not settled amicably, the Prairie Provinces will be even more tightly tied to their neighbor to the south.

This conflict highlights the major differences between the Canadian government with its confederation of powerful and independent provinces and the U.S. with a more centralized and powerful national government. The local trade war in Canada may also foreshadow a far larger and damaging trade war on several fronts, based upon President Donald Trump’s tariff decisions in coming months.

More in Opinion

The crucial elements to good government

What makes good government? What makes bad government? We all have experienced… Continue reading

Enumclaw: trying to retain original charm while building booms

All Puget Sound areas are growing. In Enumclaw, the question is, how will its original charm be maintain while building booms throughout the city?

Are sheriffs above the law?

Washington voters have spoken on I-1639. Sheriffs need to set the stage to follow their oath of office - and enforce the law.

What tax raising idea will win out in March budget madness?

Democrats, who control the House and Senate, are set to release spending plans and revenue packages.

Gov. Inslee and the Supreme Court

In 2015, after another session without procuring a key weapon in his… Continue reading

Political parties often bring trouble

On his way out, George Washington made it clear that political parties have the potential for national harm.

Addressing concerns, inaccurate statements

To facilitate fact-based discussion about Lakeside Industries’ application to relocate its Covington… Continue reading

JFK and LBJ, America’s ‘best and brightest’

The year was 1975. I had just received my master’s in history… Continue reading

Trade issues coalesce Washington’s delegation

Historically, international trade issues have galvanized our state’s congressional delegation. Many wondered… Continue reading

Lies during the Cuban missile crisis

Presidential candidate John F. Kennedy lied about Soviet missile strength to win… Continue reading

When tomorrow becomes today: King County cities must tackle affordable housing

Microsoft has started the regional dialogue, but will cities rise to the challenge?

Letter to the editor: ‘The second amendment needs to be weighed in context’

On Jan. 8 former Congresswoman Gabby Giffords dropped in the hopper bipartisan… Continue reading