In Canada, A Trade War Emerges

Canada has a trade war on its hands — and it is one entirely of its own making. For the past four months, two of its western provinces, Alberta and British Columbia, have been exchanging blows over an expansion to Kinder Morgan's Trans Mountain pipeline, which transports diluted bitumen from Edmonton, Alberta, to Burnaby, British Columbia. On April 16, the Alberta government introduced the Preserving Canada's Economic Prosperity Act, which would give Edmonton the power to cut off all crude oil, natural gas and refined product exports to its neighbor. That move could force British Columbians to pay about 30 percent more for gasoline, among other secondary effects. The willingness of Alberta Premier Rachel Notley to attempt such extreme measures to protect her province's greatest resource highlights the significance of the spat to both provinces — and to the rest of Canada, and even the United States. 

Frenemies: Alberta and British Columbia

Because of Canada's decentralized federal system, its provinces wield a great deal of autonomy. Such power allows each province to pursue its own objectives to the extent that they might clash with those of other provinces — as with Alberta and British Columbia — or even the national government in Ottawa. Abutting the Rocky Mountains, Alberta is the westernmost of Canada's prairie provinces, which include Saskatchewan and Manitoba. It is also home to more than 80 percent of Canada's oil production and over 95 percent of its oil reserves. On the other side of the Rockies, British Columbia shares a similar climate — both meteorologically and politically — with its Cascadian cousins in the United States: Oregon and Washington. The environmentalist movement is strong in the province, as are the voices of the indigenous First Nations. And although an April 18 poll by the Angus Reid Institute revealed that 54 percent of British Columbians now back the expansion, even supporters of the project have expressed worries about the consequences of an oil spill off the coast.

For much of the past two decades, the two provinces have enjoyed positive relations, signing a deal in 2006 to form an economic union between them. But as Alberta's options to export more crude oil to the United States encountered difficulties due to delays on the Keystone XL pipelines and others, the province has strived to send more oil through its West Coast neighbor. Alberta's oil production has also doubled since 2007, largely due to the exploitation of its oil sands — a source that environmentalists particularly abhor — which now make up 86 percent of its output. While he was prime minister from 2006 to 2015, Stephen Harper strongly supported Alberta's energy growth as part of his strategy to turn Canada into an energy superpower.

1 2 3 4
View single page >> |

In Canada, a Trade War Emerges is republished with permission from Stratfor.com.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.