‘We need to be very well prepared’: Canada West Foundation talks second Trump term

Gary Mar, Canada West Foundation President and CEO, speaks to Alberta Primetime about expectations for Canada-U.S. relations as Donald Trump returns to the White House.

This interview has been edited for clarity and length.

Michael Higgins: What do Canadians need to be ready for when Donald Trump returns to presidency?

Gary Mar: You've made a really important observation right off the outset which is that this is the second Trump administration, and it won't be like the first one.

The first one in 2016 was kind of unexpected, I don't think Mr. Trump expected to be the president of the United States, and so when it came to his policies, we are stuck trying to read the tea leaves through his tweets. Now, he actually has a much more fully developed and robust set of policies that have been developed by people that have been working on it for the last four years.

I guess the first thing that I'd say is we should ignore the tweets and we should actually look at the people that have been writing things for him. So for example, the global based tariff is something that was written by a MAGA-affiliated think tank that's associated with JD Vance, the vice president-elect, and was written in part by contributions to Robert Lighthizer, who is the former U.S. Trade Representative. We should be paying attention to that.

I would say this, there's a lot of Canadians who are going out there saying, “we have some hopeful signs, but we need to prepare for the worst”. The global base tariff starts at 10 per cent and can rise by five per cent each and every year that the United States continues to have a trade deficit. So it could rise to 15, it could rise to 20, it could go back to 15 and back to 10. It's hard to say.

There's a lot of wishful thinking going out there that it won't be as bad as it seems, but I think that there are strong messages that are out there that we need to be very well prepared. Particularly here in the province of Alberta, 30 per cent of our GDP for the province relies upon exports to the United States, so when the premier talks about trying to make those messages clear to the United States that they want Canadian energy, she makes a very good point because it's vital to us here in the west.

In terms of dollars, the largest export of the United States is the province of Ontario, but in terms of percentage of GDP, it's places like New Brunswick, Alberta, Saskatchewan, and so it will be very important, particularly on the energy file. There may not be upside for a lot of oil going into the United States if it displaces the development of U.S. oil, but maybe there's a huge opportunity for gas that could go into LNG facilities for export from the United States in labeling this as America first, at least that was his approach on the campaign trail.

MH: What's the likelihood that the Canadian businesses, including the oil patch, will be under pressure or motivated to pack their bags and head south of the border? Or is it more about investment?

GM: When it comes to oil, we need to change our messaging. We need to change our messaging to say we actually export jobs in a pipeline. I've been to the refineries in places like Lima, Ohio and marathon refinery in Detroit, the refinery in Denver, Colorado, all of those refineries operate on oil that comes to the United States from Canada, from the oil sands.

So it's important to say we're not displacing your production of oil in the United States, but rather, we're creating jobs because you refine it in places like Ohio, where Vice President elect JD Vance is from, we actually create jobs by exporting natural gas that you turn into LNG and export it off the Gulf Coast.

Having U.S. energy security will be important to the United States, but the messaging should be that it's about jobs that we create down there.

MH: A lot of this centres around energy policy so where do you see Canadian Environmental Policy factoring into the equation? There's certainly a significant political and business community pressure building right here in the province against Ottawa's draft emissions cap.

GM: The draft emissions cap I think will likely go to court and it will likely be found to be unconstitutional. Having said that, some of the damage has already been caused. People don't like the uncertainty of trying to figure out whether or not the emissions cap is going to be put in place, or whether it's going to be challenged successfully, and so they would rather not have to deal with that uncertainty. It's already driving investment dollars out of the Canadian oil patch and into the United States or other places in the world.

I think of the of the ten largest producers of oil in the world, there's only one that's thinking about an emissions cap, and that's Canada.

MH: On the ground in D.C., whether it's James Rajat, Alberta's current senior representative to the U.S., or ambassador Kirsten Hillman, what’s going to be the Canadian ground game?

GM: I think the Canadian ground game has to be recognized that it's not just about the relationship between Ottawa and D.C. It's about the relationship between Edmonton and North Dakota. It's about understanding that there are 35 US states that describe Canada as their number one export destination.

It requires an all out ground game, not just in Washington, but with all of the premiers engaging with governors, many of whom are Republicans, who will recognize that the trade relationship between Canada and its provinces and their states is a critically important one.

So it's about a lot more than just what Alberta does in Washington, although that's important, and it's about a lot more than what Ambassador Hillman has been able to do, although she's doing a great job. There's a lot more that needs to be done, all across the board.