Varcoe: Trump wants Keystone XL revived, Canada wants lower tariffs – while a trade deal looms

It’s like a big neon sign flashing on top of Trump Tower: the U.S. president still wants Keystone XL to be built.

On Tuesday night, U.S. President Donald Trump said on social media his government reached a new trade deal with Canada – shortly before new 50 per cent American tariffs were set to hit some Canadian exports. He also took the time to mention that the Keystone XL pipeline project “may be awoken from the grave!”

This is not a surprise. But if the talk helps to unlock a trade deal, so much the better.

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“It’s something that we know that the president wants because, one, it’s access to continued oil, which is critical to the U.S. economy. And two, it’s a legacy project for him,” said Gitane De Silva, who previously served as Alberta’s senior representative to the U.S. and later became CEO of the Canada Energy Regulator.

“If he could get this built, that would be, I think, a big political win,” added James Coleman, a law professor at the University of Minnesota who specializes in North American energy infrastructure.

Shortly before the new American tariffs — targeting almost $29 billion of select Canadian products — were set to go into effect on Wednesday, the president announced he was pausing the levies for three days. This was “based on the fact that Canada and the U.S.A., subject to finalization of documents, have a deal,” he wrote.

On Wednesday, both countries indicated an agreement had largely been reached, subject to necessary documents being finalized, although details were not yet released.

Speaking to reporters, Trump called it “a very fair deal for both,” while Prime Minister Mark Carney said on social media that the two sides had made significant progress and were moving towards an agreement.

Congratulations Minister LeBlanc and Ambassador Greer for the significant progress in the Canada-United States trade negotiations. Canada entered these discussions with the best overall trade terms. We are now moving towards an agreement that reinforces that Canadian advantage,… https://t.co/2X8axwEeiE

Energy remains critical in the trading relationship between the two countries, as it has been for decades.

It is the largest-single export that Canada sells to the United States. In Alberta, cross-border trade was valued at $152 billion last year, dominated by $125 billion worth of minerals exports — mainly oil and natural gas — heading south.

If some revised version of Keystone XL goes ahead, the trade would keep expanding.