Prime Minister Mark Carney told reporters in Red Deer, Alta., on Wednesday that he didn’t 'see the value' of putting energy exports on the table in trade talks.Jeff McIntosh/The Canadian Press
Prime Minister Mark Carney is ruling out restricting Canada’s oil and gas supply to the U.S. in the face of President Donald Trump’s expanding trade war, removing a potent bargaining chip as Ottawa seeks a deal with Washington.
Mr. Carney’s government is also planning to scrap a tax on online streaming services such as Netflix and Amazon Prime, the latest in a series of concessions to U.S. trade demands for which Canada has not received anything in return.
Dominic LeBlanc, the Minister responsible for Canada-U.S. trade, is in Washington this week, where he met with U.S. Trade Representative Jamieson Greer and attended a social event co-sponsored by the Canadian government and major U.S. tech companies.
Speaking to reporters in Red Deer, Alta., on Wednesday, Mr. Carney said he didn’t “see the value” of putting energy exports, such as Alberta’s oil, on the table in trade talks.
“Canadians are reliable,” he said. “One of the biggest commodities, arguably the best, is trust. People trust us, and so, when you’re a supplier of a key commodity, key service, you’ve got to think really hard about not supplying.”
The move marks a divergence from the Prime Minister’s insistence last week that “everything is on the table” as he decides how to respond to the latest round of Mr. Trump’s tariffs, which are set to take effect on Aug. 19.
The U.S. is heavily dependent on Canadian oil – importing about four million barrels a day, nearly two-thirds of all its petroleum imports – making it a powerful potential leverage point.
An oilfield pumpjack seen near Trochu, Alta., in 2022.Larry MacDougal/The Canadian Press
Mr. Carney also defended Ottawa’s decision to end a 5-per-cent tax that streamers must pay to support the creation of Canadian television, movie and music content. A government lawyer wrote in a July 17 court document that Ottawa intends to “eliminate” the levy.
The decision only came to light this week when The Wire Report, a telecom industry news website, obtained a copy of the lawyer’s letter. It follows Culture Minister Marc Miller’s June order that the federal broadcast regulator review its decision to increase the tax to 15 per cent.
The Prime Minister insisted on Wednesday that the policy U-turn was about keeping streaming services affordable. “Most Canadians have one or two or more of these streamers and it’s real money. This stuff adds up.”
The Online Streaming Act has been frequently cited by the U.S. government as a top trade irritant. Amazon, Apple and Spotify are all suing in Canadian federal court in a bid to stop the law.
Mr. Miller’s spokesperson, Hermine Landry, told The Globe and Mail that streaming platforms “will still be required to reinvest a percentage of their revenues in Canadian and Indigenous content.” She said there was no update on what the percentage would be or when a decision on that would be made.
LeBlanc returns to Washington in effort to advance trade talks
Mr. LeBlanc and Janice Charette, Canada’s chief trade negotiator to the United States, met in Washington on Wednesday morning with Mr. Greer. Ms. Charette also met on Tuesday with Jeffrey Goettman, Mr. Greer’s deputy for the Western Hemisphere.
Canada is aiming to avoid Mr. Trump imposing his latest round of tariffs – which would amount to 50 per cent on US$20-billion worth of goods, including electronics and alcohol – as well as to reach a deal to lower or eliminate his previously imposed levies on autos, metals and other goods.
On Tuesday evening, Mr. LeBlanc and Mark Wiseman, Canada’s ambassador to the U.S., attended a Canada-U.S. Friendship Day event at the Washington Nationals-Toronto Blue Jays baseball game in the American capital. The event was sponsored by the Government of Canada, Netflix, Amazon and Google.
Since taking office last year, Mr. Carney has made a string of concessions to Mr. Trump, such as rolling back retaliatory tariffs on U.S. goods and cancelling a planned digital services tax. Earlier this month, Ottawa agreed to give the U.S. half the net toll revenue from the new Gordie Howe International Bridge between Windsor and Detroit, even though Canada paid the entire $6.4-billion price tag to build the span.
So far, however, Mr. Trump has only increased tariffs on Canada and the two sides have not reached Mr. Carney’s promised trade deal.
Some voices, such as Ontario Premier Doug Ford, have urged Mr. Carney to get tougher such as by imposing dollar-for-dollar tariffs on U.S. goods. Mr. Ford himself briefly slapped a 25-per-cent surcharge on his province’s electricity exports to the U.S. last year before abruptly changing course after Mr. Trump threatened more tariffs.
Eric Miller, a cross-border business consultant, said throttling the U.S.’s energy supply is “the biggest hammer” Canada has, but it can’t realistically be deployed. Such a move would risk costly U.S. retaliation, such as shutting off the pipelines that carry Alberta crude to Ontario refineries via shortcuts through the U.S.
“This is like Canada’s nuclear weapon,” Mr. Miller, president of the Rideau Potomac Strategy Group, said. “Everybody knows it has it, but it can’t really use it.”
He said the killing of the streamer tax was a “minor” capitulation because the Carney government doesn’t seem to care that much about it. The aim might be to “lower the temperature” in talks by pleasing tech companies, which hold sway with Mr. Trump.
Tony Keller: Canada’s best response to Trump’s latest tariff threats? Keep calm and carry on
Former U.S. diplomat Scotty Greenwood said that Canada has to be ready to show strength with the U.S. and have a plan in place if there’s no deal by Aug. 19.
“Canadians have been hesitant or reticent to flex their muscle. It’s time to be really tough and really flex,” she said. “With this particular President, this particular counterparty, you’ve got to negotiate from a position of strength.”
She said Mr. Carney will need the premiers and Canadians united behind him, particularly as the latest round of tariffs heavily target Ontario and Quebec while sparing Alberta and Saskatchewan. “It’s a smart move on the part of the U.S.,” she said, “and Canada has to be equally smart about it.”
Conservative MP Shuvaloy Majumdar said Canada should create “a strategic reserve of critical minerals and energy” and unleash its auto and defence manufacturing base to “build up leverage” in negotiations with the U.S.
The Prime Minister on Wednesday made clear that it is possible there will ultimately be no deal at all, vowing to only sign if he can get a good one.
“We’re only going to accept a solution that works for Canadians,” he said. “We’re going to focus now on building toward an agreement, if an agreement is possible.”
Otherwise, he said, Canada has “lots of options” to find other markets for its goods. “Everybody wants to do more with Canada,” he said, “except the United States.”
With reports from Barry Hertz and Mark Rendell in Toronto