Advertisement 1

Varcoe: As Trump weighs tariffs on Canadian oil, concern mounts over 'investment drift' into U.S.

'These types of tariffs and these types of trade wars are not good for anybody and, particularly for Canada, it can have an impact of not being able to grow the industry'

Article content

Alberta has spent years setting the table to expand the petrochemical sector, and more than $35 billion of proposed projects are in the hopper for consideration under a provincial incentive program.

However, the threat of U.S. tariffs on all imports from Canada — potentially being imposed as early as Saturday — could disrupt big-ticket investments across the country, as companies try to assess the potential damage of a messy trade dispute with our largest trading partner.

Advertisement 2
Story continues below
Article content

Aside from the massive export of natural resources, other value-added products — including petrochemicals — cross the border daily and could be hit by Donald Trump’s pledge to place a 25 per cent levy on imports from Mexico and Canada.

“It can be very impactful. We in Canada already have some competitive disadvantages with regards to attracting investments,” Rocky Vermani, chair of the Chemistry Industry Association of Canada and a senior vice-president at Calgary-based Nova Chemicals, said in an interview last week.

Article content

“These types of tariffs and these types of trade wars are not good for anybody and, particularly for Canada, it can have an impact of not being able to grow the industry.”

On Thursday, Trump turned up the heat again on the trade front, telling reporters he intends to put 25 per cent tariffs on Canada and Mexico on Saturday, but hasn’t decided if it will include oil imports.

“It depends on what the price is. If the oil is properly priced, if they treat us properly, which they don’t . . . Mexico and Canada have never been good to us on trade.”

Canada is the largest supplier of foreign oil to the U.S., shipping more than four million barrels per day to the country.

Article content
Advertisement 3
Story continues below
Article content

Cross-border trade is essential for both countries, with $3.6 billion of goods moving between the two countries daily, but a 25 per cent tariff would shrink the country’s GDP by an estimated 2.6 per cent, according to the Canadian Chamber of Commerce.

Recommended from Editorial
  1. Minister of Energy and Natural Resources Jonathan Wilkinson at a press conference at the University of Calgary on Wednesday, Jan. 29, 2025.
    Federal funds announced for Alberta carbon capture technologies amid looming tariff threats
  2. Piping is seen on the top of a receiving platform which will be connected to the Coastal GasLink natural gas pipeline terminus at the LNG Canada export terminal under construction, in Kitimat, B.C., Wednesday, Sept. 28, 2022.
    Varcoe: In 'another body blow', tariff threats already felt as Alberta natural gas prices lag U.S.

Even the threat of a tariff is already creating uncertainty, weighing on business confidence and investment intentions, the Bank of Canada said Wednesday in a new monetary policy report.

“Tariffs pose a significant threat to capital investment in Canada by disrupting trade-dependent industries,” said Jessica Brandon-Jepp of the Canadian Chamber of Commerce.

When faced with uncertainty, companies eyeing significant investments will move cautiously.

“There’s a danger of that, for sure. And, to be honest with you, that’s part of the point of tariffs from President Trump’s perspective, is to create these incentives for people to actually do business and create jobs in the United States,” federal Natural Resources Minister Jonathan Wilkinson said Wednesday in an interview.

Advertisement 4
Story continues below
Article content

“This is why we truly need to try to sort this tariff issue out quickly . . . (so) everybody knows the rules of the game, and you don’t have that kind of foreign investment drift into the United States.”

Jonathan Wilkinson
Minister of Energy and Natural Resources Jonathan Wilkinson announces funding for carbon management technologies in Alberta during a press conference at the University of Calgary on Wednesday, Jan. 29, 2025. Gavin Young/Postmedia

After global oil prices tanked last decade, provincial governments under the NDP and UCP created incentive programs to attract major petrochemical investments that would add value to natural resources and help diversify the economy.

Several new facilities moved forward, including Inter Pipeline’s Heartland polypropylene plant in Strathcona County, which started up in 2022. Today, Dow’s $10-billion net-zero petrochemical project is under construction in Fort Saskatchewan.

Other major projects are in the planning stages.

Alberta’s Industrial Heartland Association estimates the total value of major projects being studied for the region northeast of Edmonton, but not yet approved, at about $17 billion.

“Tariffs are a headwind for capital investments,” association executive director Mark Plamondon said in a statement.

“For investors making multibillion-dollar investment decisions with the purpose of exporting to American markets, added tariff costs can substantially impact project economics.”

Advertisement 5
Story continues below
Article content

Under the Alberta Petrochemicals Incentive Program, the province provides grants worth up to 12 per cent of the capital expenses for an eligible project.

According to Alberta’s energy department, 15 applications are in various stages of the approval process, representing $37 billion in potential investment. If built, these developments would create more than 1,600 permanent jobs.

Several proposed projects in Alberta are in the hydrogen-ammonia export business, and they would send clean energy to markets such as Japan and South Korea, noted Greg Moffatt, CEO of the Chemistry Industry Association of Canada (CIAC).

However, the existing Canadian and U.S. chemistry industries remain interconnected.

“It’s hard to understand what the short-term impacts are going to be on our industry,” he said of tariffs.

“But it is going to be painful.”

Inter Pipeline Heartland Petrochemical Complex
The Inter Pipeline Heartland Petrochemical Complex is seen under construction in Strathcona County, Alberta in this file photo. Jason Franson/Bloomberg files

In 2023, the chemical sector in Alberta directly employed more than 8,500 people and exported more than $10 billion of products, with 89 per cent shipped to the U.S.

Data from the association shows $4.2 billion of plastic resin and plastic products from Alberta were exported into all U.S. states, but the main destinations included Texas, Michigan and Illinois.

Advertisement 6
Story continues below
Article content

The Canadian and U.S. petrochemicals industry is integrated with raw products flowing back and forth across the border, Vermani said.

For example, Nova Chemicals makes polyethylene, which requires ethane, a component of natural gas.

The company operates ethylene and polyethylene production complexes at its facilities in Joffre.

Nova imports ethane from North Dakota to supplement its supply from Western Canada, while its facilities in the Sarnia, Ont., region receive ethane from the Marcellus region in the U.S. Vermani estimates 50 to 60 per cent of Nova’s production from Canada crosses the border.

Any tariffs would have a significant impact on Nova’s business, he said.

“If there are retaliatory tariffs that the Canadian government comes out and puts on, that becomes an even more complex situation for us.”

It seems increasingly clear that pulling jobs and investment into the United States is part of Trump’s broader trade strategy.

And, it appears, we will soon find out if tariff talk shifts from being a threat to reality.

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com

Article content
Comments
You must be logged in to join the discussion or read more comments.
Join the Conversation

Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.

Latest National Stories
    universo-virtual.com
    buytrendz.net
    thisforall.net
    benchpressgains.com
    qthzb.com
    mindhunter9.com
    dwjqp1.com
    secure-signup.net
    ahaayy.com
    soxtry.com
    tressesindia.com
    puresybian.com
    krpano-chs.com
    cre8workshop.com
    hdkino.org
    peixun021.com
    qz786.com
    utahperformingartscenter.org
    maw-pr.com
    zaaksen.com
    ypxsptbfd7.com
    worldqrmconference.com
    shangyuwh.com
    eejssdfsdfdfjsd.com
    playminecraftfreeonline.com
    trekvietnamtour.com
    your-business-articles.com
    essaywritingservice10.com
    hindusamaaj.com
    joggingvideo.com
    wandercoups.com
    onlinenewsofindia.com
    worldgraphic-team.com
    bnsrz.com
    wormblaster.net
    tongchengchuyange0004.com
    internetknowing.com
    breachurch.com
    peachesnginburlesque.com
    dataarchitectoo.com
    clientfunnelformula.com
    30pps.com
    cherylroll.com
    ks2252.com
    webmanicura.com
    osostore.com
    softsmob.com
    sofietsshotel.com
    facetorch.com
    nylawyerreview.com
    apapromotions.com
    shareparelli.com
    goeaglepointe.com
    thegreenmanpubphuket.com
    karotorossian.com
    publicsensor.com
    taiwandefence.com
    epcsur.com
    odskc.com
    inzziln.info
    leaiiln.info
    cq-oa.com
    dqtianshun.com
    southstills.com
    tvtv98.com
    thewellington-hotel.com
    bccaipiao.com
    colectoresindustrialesgs.com
    shenanddcg.com
    capriartfilmfestival.com
    replicabreitlingsale.com
    thaiamarinnewtoncorner.com
    gkmcww.com
    mbnkbj.com
    andrewbrennandesign.com
    cod54.com
    luobinzhang.com
    bartoysdirect.com
    taquerialoscompadresdc.com
    aaoodln.info
    amcckln.info
    drvrnln.info
    dwabmln.info
    fcsjoln.info
    hlonxln.info
    kcmeiln.info
    kplrrln.info
    fatcatoons.com
    91guoys.com
    signupforfreehosting.com
    faithfirst.net
    zjyc28.com
    tongchengjinyeyouyue0004.com
    nhuan6.com
    oldgardensflowers.com
    lightupthefloor.com
    bahamamamas-stjohns.com
    ly2818.com
    905onthebay.com
    fonemenu.com
    notanothermovie.com
    ukrainehighclassescort.com
    meincmagazine.com
    av-5858.com
    yallerdawg.com
    donkeythemovie.com
    corporatehospitalitygroup.com
    boboyy88.com
    miteinander-lernen.com
    dannayconsulting.com
    officialtomsshoesoutletstore.com
    forsale-amoxil-amoxicillin.net
    generictadalafil-canada.net
    guitarlessonseastlondon.com
    lesliesrestaurants.com
    mattyno9.com
    nri-homeloans.com
    rtgvisas-qatar.com
    salbutamolventolinonline.net
    sportsinjuries.info
    topsedu.xyz
    xmxm7.com
    x332.xyz
    sportstrainingblog.com
    autopartspares.com
    readguy.net
    soniasegreto.com
    bobbygdavis.com
    wedsna.com
    rgkntk.com
    bkkmarketplace.com
    zxqcwx.com
    breakupprogram.com
    boxcardc.com
    unblockyoutubeindonesia.com
    fabulousbookmark.com
    beat-the.com
    guatemala-sailfishing-vacations-charters.com
    magie-marketing.com
    kingstonliteracy.com
    guitaraffinity.com
    eurelookinggoodapparel.com
    howtolosecheekfat.net
    marioncma.org
    oliviadavismusic.com
    shantelcampbellrealestate.com
    shopleborn13.com
    topindiafree.com
    v-visitors.net
    qazwsxedcokmijn.com
    parabis.net
    terriesandelin.com
    luxuryhomme.com
    studyexpanse.com
    ronoom.com
    djjky.com
    053hh.com
    originbluei.com
    baucishotel.com
    33kkn.com
    intrinsiqresearch.com
    mariaescort-kiev.com
    mymaguk.com
    sponsored4u.com
    crimsonclass.com
    bataillenavale.com
    searchtile.com
    ze-stribrnych-struh.com
    zenithalhype.com
    modalpkv.com
    bouisset-lafforgue.com
    useupload.com
    37r.net
    autoankauf-muenster.com
    bantinbongda.net
    bilgius.com
    brabustermagazine.com
    indigrow.org
    miicrosofts.net
    mysmiletravel.com
    selinasims.com
    spellcubesapp.com
    usa-faction.com
    snn01.com
    hope-kelley.com
    bancodeprofissionais.com
    zjccp99.com
    liturgycreator.com
    weedsmj.com
    majorelenco.com
    colcollect.com
    androidnews-jp.com
    hypoallergenicdogsnames.com
    dailyupdatez.com
    foodphotographyreviews.com
    cricutcom-setup.com
    chprowebdesign.com
    katyrealty-kanepa.com
    tasramar.com
    bilgipinari.org
    four-am.com
    indiarepublicday.com
    inquick-enbooks.com
    iracmpi.com
    kakaschoenen.com
    lsm99flash.com
    nana1255.com
    ngen-niagara.com
    technwzs.com
    virtualonlinecasino1345.com
    wallpapertop.net
    nova-click.com
    abeautifulcrazylife.com
    diggmobile.com
    denochemexicana.com
    eventhalfkg.com
    medcon-taiwan.com
    life-himawari.com
    myriamshomes.com
    nightmarevue.com
    allstarsru.com
    bestofthebuckeyestate.com
    bestofthefirststate.com
    bestwireless7.com
    declarationintermittent.com
    findhereall.com
    jingyou888.com
    lsm99deal.com
    lsm99galaxy.com
    moozatech.com
    nuagh.com
    patliyo.com
    philomenamagikz.net
    rckouba.net
    saturnunipessoallda.com
    tallahasseefrolics.com
    thematurehardcore.net
    totalenvironment-inthatquietearth.com
    velislavakaymakanova.com
    vermontenergetic.com
    sizam-design.com
    kakakpintar.com
    begorgeouslady.com
    1800birks4u.com
    2wheelstogo.com
    6strip4you.com
    bigdata-world.net
    emailandco.net
    gacapal.com
    jharpost.com
    krishnaastro.com
    lsm99credit.com
    mascalzonicampani.com
    sitemapxml.org
    thecityslums.net
    topagh.com
    flairnetwebdesign.com
    bangkaeair.com
    beneventocoupon.com
    noternet.org
    oqtive.com
    smilebrightrx.com
    decollage-etiquette.com
    1millionbestdownloads.com
    7658.info
    bidbass.com
    devlopworldtech.com
    digitalmarketingrajkot.com
    fluginfo.net
    naqlafshk.com
    passion-decouverte.com
    playsirius.com
    spacceleratorintl.com
    stikyballs.com
    top10way.com
    yokidsyogurt.com
    zszyhl.com
    16firthcrescent.com
    abogadolaboralistamd.com
    apk2wap.com
    aromacremeria.com
    banparacard.com
    bosmanraws.com
    businessproviderblog.com
    caltonosa.com
    calvaryrevivalchurch.org
    chastenedsoulwithabrokenheart.com
    cheminotsgardcevennes.com
    cooksspot.com
    cqxzpt.com
    deesywig.com
    deltacartoonmaps.com
    despixelsetdeshommes.com
    duocoracaobrasileiro.com
    fareshopbd.com
    goodpainspills.com
    kobisitecdn.com
    makaigoods.com
    mgs1454.com
    piccadillyresidences.com
    radiolaondafresca.com
    rubendorf.com
    searchengineimprov.com
    sellmyhrvahome.com
    shugahouseessentials.com
    sonihullquad.com
    subtractkilos.com
    valeriekelmansky.com
    vipasdigitalmarketing.com
    voolivrerj.com
    zeelonggroup.com
    1015southrockhill.com
    10x10b.com
    111-online-casinos.com
    191cb.com
    3665arpentunitd.com
    aitesonics.com
    bag-shokunin.com
    brightotech.com
    communication-digitale-services.com
    covoakland.org
    dariaprimapack.com
    freefortniteaccountss.com
    gatebizglobal.com
    global1entertainmentnews.com
    greatytene.com
    hiroshiwakita.com
    iktodaypk.com
    jahatsakong.com
    meadowbrookgolfgroup.com
    newsbharati.net
    platinumstudiosdesign.com
    slotxogamesplay.com
    strikestaruk.com
    trucosdefortnite.com
    ufabetrune.com
    weddedtowhitmore.com
    12940brycecanyonunitb.com
    1311dietrichoaks.com
    2monarchtraceunit303.com
    601legendhill.com
    850elaine.com
    adieusolasomade.com
    andora-ke.com
    bestslotxogames.com
    cannagomcallen.com
    endlesslyhot.com
    iestpjva.com
    ouqprint.com
    pwmaplefest.com
    qtylmr.com
    rb88betting.com
    buscadogues.com
    1007macfm.com
    born-wild.com
    growthinvests.com
    promocode-casino.com
    proyectogalgoargentina.com
    wbthompson-art.com
    whitemountainwheels.com
    7thavehvl.com
    developmethis.com
    funkydogbowties.com
    travelodgegrandjunction.com
    gao-town.com
    globalmarketsuite.com
    blogshippo.com
    hdbka.com
    proboards67.com
    outletonline-michaelkors.com
    kalkis-research.com
    thuthuatit.net
    buckcash.com
    hollistercanada.com
    docterror.com
    asadart.com
    vmayke.org
    erwincomputers.com
    dirimart.org
    okkii.com
    loteriasdecehegin.com
    mountanalog.com
    healingtaobritain.com
    ttxmonitor.com
    bamthemes.com
    nwordpress.com
    11bolabonanza.com
    avgo.top