The political uncertainty in Canada right now is unparalleled in my adult lifetime. We are in literal limbo with a major trade dispute brewing, a non functioning government, and a Liberal party that seems to be using it as a political tool while they figure out who they want to lead them into the next election, which is looking more and more likely to happen in the fall now. None of this is good for anyone, outside of maybe the Liberals who can possibly gain some support on this wedge issue as they find a new leader.
It will impact this region greatly, and from my view right now, in no way positive. How so? I will lay it out below.
1. Energy Sector Challenges
Alberta exports most of its oil and natural gas to the U.S., so any tariffs or restrictions could increase costs for American buyers, making Alberta’s oil less competitive.
If the U.S. increases domestic oil production or prioritizes American energy (e.g., encouraging more fracking), demand for Alberta oil could decline.
The U.S. has previously discussed higher tariffs on imported oil to protect its own producers, which could directly harm Alberta’s oil industry.
2. Higher Costs for Businesses & Consumers
Many Alberta businesses rely on imported materials from the U.S., such as:
Construction materials (steel, aluminum, lumber)
Machinery and equipment
Automotive parts
Agricultural supplies
If tariffs increase the cost of these imports, businesses may pass higher costs onto consumers, making housing, food, and transportation more expensive.
Alberta relies on trade and foreign investment, so economic uncertainty caused by tariffs could slow business growth.
3. Agricultural Industry at Risk
The U.S. is a major buyer of Alberta beef, pork, and grain. If tariffs or trade restrictions make Alberta products more expensive, U.S. buyers might switch to domestic suppliers or other countries.
If Canada retaliates with tariffs on U.S. products, Alberta farmers might face higher costs for farm equipment, fertilizer, and feed.
The livestock industry (especially beef and pork) could be hit hard if U.S. protectionist policies favor American farmers.
4. Manufacturing and Tech Sectors Could Suffer
Alberta's manufacturing sector depends on U.S. markets and supply chains. Tariffs could make Alberta-made goods less competitive, leading to:
Job losses
Decreased investment in new production facilities
Slower growth in industries like petrochemicals and high-tech manufacturing
Technology startups and innovation hubs in Alberta also rely on global trade and U.S. partnerships. Tariff uncertainty could make investment harder to secure.
5. Currency Fluctuations and Investment Uncertainty
If tariffs disrupt trade, the Canadian dollar (CAD) could depreciate against the U.S. dollar.
This could make imports more expensive (bad for businesses)
It might help exports but also make foreign investment riskier
Investors prefer stable markets, and ongoing trade tensions with the U.S. could scare away investors from Alberta’s energy and business sectors.
The current “Team Canada” assembly in Ottawa wants to respond in kind with tariffs of their own. While I am not going to pretend to be a trade expert, there are many risks with this approach as well.
1. Higher Costs for Alberta Businesses
When Canada imposes tariffs on U.S. goods, it makes imported materials more expensive for Alberta companies that rely on them. Some key areas of concern:
Construction & Real Estate – Many Alberta builders and developers import materials from the U.S., including lumber, steel, drywall, and appliances. If tariffs increase costs, home construction becomes more expensive, pushing up real estate prices and slowing new developments.
Manufacturing & Energy – Alberta’s oil and gas sector depends on U.S. machinery and equipment. If those products become more expensive due to tariffs, energy companies may face higher operating costs, making projects less profitable.
Automotive Industry – Car dealerships and mechanics in Alberta import many parts from the U.S. Tariffs could drive up vehicle repair costs and make new cars more expensive.
Example:
In 2018, Canada placed retaliatory tariffs on U.S. steel and aluminum, which raised construction and manufacturing costs in Alberta. If similar tariffs return, it could hurt industries that rely on American imports.
2. Alberta Farmers & Ranchers Could Struggle
The agricultural sector in Alberta is heavily dependent on U.S. trade for both exports and imports. Retaliatory tariffs could lead to:
Higher costs for farm equipment & feed – Many Alberta farmers buy U.S.-made tractors, machinery, and animal feed. Tariffs would make these essentials more expensive, reducing profitability.
Reduced market access for Alberta beef & pork – If trade tensions escalate, the U.S. may restrict imports of Canadian beef or pork, reducing Alberta’s sales.
Disruptions in grain trade – Alberta exports wheat, barley, and canola to the U.S. If tariffs slow cross-border trade, Alberta farmers could lose key buyers.
Example:
During past trade disputes, U.S. buyers have sourced beef from other countries (like Australia) instead of Alberta, hurting ranchers.
3. American Retaliation Against Canada’s Retaliatory Tariffs
If Canada retaliates too aggressively, Trump could double down on tariffs, making the situation even worse. This could mean:
Higher tariffs on Alberta oil & gas – The U.S. could impose new energy tariffs, making Alberta’s oil more expensive and reducing exports.
Increased costs for Alberta consumers – If the trade war escalates, Alberta residents could see higher prices on food, cars, and household goods.
Economic slowdown – Retaliatory tariffs can lead to reduced investment, job losses, and uncertainty, hurting Alberta’s economy in the long run.
Example:
In 2018, Trump threatened tariffs on Canadian auto exports during a trade dispute. A similar move in 2025 could be devastating for Alberta’s economy.
4. Retail & Consumer Goods Will Become More Expensive
Many everyday products in Alberta come from the U.S. or contain American materials. If Canada imposes tariffs, these items could see price hikes:
Groceries – Alberta imports U.S. fruits, vegetables, and processed foods. Retaliatory tariffs could make food more expensive.
Clothing & electronics – Many consumer goods come from U.S. retailers or use American-made components. Prices could rise.
Alcohol – If Canada reintroduces tariffs on U.S. whiskey, wine, or beer (as it did in 2018), Albertans could pay more for imported drinks.
Example:
During the last tariff dispute, prices for U.S. ketchup, whiskey, and processed foods went up in Canada, hurting businesses that rely on these imports.
In conclusion, my opinion is we need a diplomatic approach. This all out battle benefits no average citizen of this country. Tariffs are the tip of the iceberg in what could be a tumultuous 4+ years with our neighbors to the south. Trump wants companies to move there, manufacture there, and create jobs there. If we cut off our oil, they may refit their refineries on the gulf coast, who can currently process our heavy oil (which is more expensive to do, which is also why we sell at a discount) to refine other oil from other parts of the world, or right in their backyard which would be disastrous.
We never should have gotten here, to the point where we were so reliant on one country who knows they have us. Pipelines to the coasts would have alleviated a bit of this burden and not made us so beholden to the US. And this isn’t just about oil, we are an export country and we are going to war with the biggest consumer in the world, who is also our next door neighbor. Call me crazy, but I think someone out there in this country must have the brains to figure out a better strategy.
I am optimistic this ends well, but with every press conference I watch lately, that hope is fading.
Chris
