Varcoe: Don't do anything 'dumb': Using energy as weapon in trade war should be a 'non-starter,' says Smith

It’s a non-starter and would hurt Canadians, says Premier Danielle Smith.

As a trade battle between Canada and the United States enters a new phase, Smith spoke for about a half-hour with Ontario’s Doug Ford on Monday to discuss ways to work together.

But the “non-starter” for Alberta’s premier is using energy as a weapon in the clash, such as threatening to reduce supplies or place export levies on oil and natural gas headed to the U.S.

In an interview on Tuesday, Smith noted large volumes of Canadian crude move into Ontario via pipeline through Michigan and Wisconsin, making it vulnerable to American trade action. Ontario also consumes natural gas imported from the U.S.

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“I f you start talking about cutting that off or tariffing it, well, the Americans actually have a greater stick,” Smith said.

“You can just imagine if we put 50 per cent tariffs on oil and gas leaving Canada, they would put 50 per cent tariffs or more on oil and gas leaving the United States into Canada. And so that would be a wipeout of the Ontario and Quebec economies,” she added.

“ I don’t want to do anything that is going to result in a retaliation that would be crippling to Eastern Canada, and crippling to consumers in the middle of an affordability crisis. That would just be dumb, and I don’t want Canada to do anything that’s dumb. ”

On Tuesday, the federal government unveiled its list of counter-tariffs that will be placed on American products imported into the country, along with a $7.5-billion assistance package for Canadian businesses and workers affected by the trade dispute.

The federal government said higher tariffs will be imposed on U.S. goods from sectors including steel, agriculture, electronics, appliances, and pulp and paper, beginning Sept. 8. It did not include levies or restrictions involving oil, Canada’s largest export to the U.S.

The Trump administration placed 50 per cent tariffs on an array of almost $28 billion of Canadian imports, starting Saturday, following the termination of negotiations on a trade agreement.

On Tuesday, Federal Finance Minister François-Philippe Champagne told reporters that most of the imported goods being hit with counter-tariffs can be substituted with Canadian products.

Ontario’s premier wants to see oil, gas and potash used as potential leverage in the conflict. His province’s auto and manufacturing sectors are being pounded by U.S. trade action.