TORONTO – In response to President-elect Donald Trump’s recent comments regarding Canadian trade, Alberta’s Premier, Danielle Smith, clarified the reasons behind Canada’s trade deficit on Wednesday. She highlighted that the deficit can be attributed to the significant volume of raw materials that Alberta exports to the United States, which ultimately generates trillions in wealth for American businesses.
Trump has suggested that Canada benefits excessively from U.S. subsidies and has threatened to impose a 25% tariff on Canadian goods. He expressed his discontent on social media, questioning why the U.S. subsidizes Canada to the tune of over $100 million annually, and proposed that many Canadians would prefer Canada to become the 51st state for tax and military benefits. He provocatively dubbed the idea as “51st State!!!”.
Premier Smith aimed to address Trump’s allegations directly while overlooking his notion of Canada becoming the 51st state. She responded, “Fair question on the trade deficit with Canada, Mr. President – the reason for this is because Canada, particularly Alberta, exports billions of raw materials such as oil, gas, minerals, and timber to U.S. refineries and manufacturing facilities. These materials are processed and resold globally, including back to Canada, which is your largest customer.” Smith indicated that Alberta contributes approximately 4.3 million barrels of oil and gas to the U.S. each day.
Additionally, Smith pointed out that the demand for affordable raw materials from Canada sustains millions of jobs in the U.S., contributing significantly to American wealth. Statistics reveal that about 60% of U.S. crude oil imports and 85% of electricity imports originate from Canada.
Kirsten Hillman, Canada’s ambassador to the U.S., noted that the trade deficit with Canada was $75 billion last year, with energy exports constituting a significant portion of American imports from Canada. Hillman explained that with Canada being one-tenth the size of the U.S., a balanced trade agreement would mean that, on a per capita basis, Canada would be purchasing ten times more from the U.S. than vice versa.
Furthermore, Premier Smith announced her intentions to attend Trump’s inauguration. This follows Ontario Premier Doug Ford’s comments, stating that Trump’s tariff proposal would be disastrous for both Canadian and U.S. stock markets. Canada stands as the largest foreign supplier of steel, aluminum, and uranium to the U.S. Moreover, it is home to 34 critical minerals and metals that are of keen interest to the Pentagon.
On a daily basis, nearly $3.6 billion Canadian (approximately $2.7 billion U.S.) worth of goods and services flow across the border, with Canada ranking as the primary export destination for 36 states in the U.S. This economic relationship emphasizes the importance of balanced trade and cooperation between the neighboring countries.