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Trump’s oil tariffs could spell deficits for Alberta government

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From the Fraser Institute

By Tegan Hill

After recently meeting with president-elect Donald Trump, Premier Danielle Smith warned that Trump’s tariffs could include oil. That’s just one more risk factor added to Alberta’s already precarious fiscal situation, which could mean red ink in the near future.

Trump has threatened a 25 per cent tariff on Canadian goods, which includes oil, and could come as early as January 20 when he’s sworn in as president. Such tariffs would likely widen the price differential between U.S. West Texas Intermediate (WTI) crude oil and Alberta’s Western Canadian select (WCS) heavy oil.

In other words, the average price difference between Canadian oil (WCS) and U.S. oil (WTI) could increase, reflecting a larger discount on Canadian oil. According to the Alberta government’s estimate, every $1 that WCS is sold at discount is a $600 million hit to the government’s budget.

To maintain its $4.6 billion projected budget surplus this fiscal year (2024/25), the Smith government is banking on oil prices (WTI) averaging US$74.00 per barrel in 2024/25. But every $1 decline in oil prices leads to a $630 million swing in Alberta’s bottom line. And WTI has dropped as low as US$67.00 per barrel in recent months.

Put simply, Trump’s proposed tariffs would flip Alberta’s budget surplus to a budget deficit, particularly if paired with lower oil prices.

While Smith has been aggressively trying to engage with lawmakers in the United States regarding the tariffs and the inclusion of oil, there’s not much she can do in the short-run to mitigate the effects if Trump’s tariff plan becomes a reality. But the Smith government can still help stabilize Alberta’s finances over the longer term. The key is spending restraint.

For decades, Alberta governments have increased spending when resource revenues were relatively high, as they are today, but do not commensurately reduce spending when resource revenues inevitably decline, which results in periods of persistent budget deficits and debt accumulation. And Albertans already pay approximately $650 each in provincial government debt interest each year.

To its credit, the Smith government has recognized the risk of financing ongoing spending with onetime windfalls in resource revenue and introduced a rule to limit increases in operating spending (e.g. spending on annual items such as government employee compensation) to the rate of population growth and inflation. Unfortunately, the government’s current plan for restraint is starting from a higher base level of spending (compared to its original plan) due to spending increases over the past two years.

Indeed, the government will spend a projected $1,603 more per Albertan (inflation-adjusted) this fiscal year than the Smith government originally planned in its 2022 mid-year budget update. And higher spending means the government has increased its reliance on volatile resource revenue—not reduced it. Put simply, Smith’s plan to grow spending below the rate of inflation and population growth isn’t enough to avoid budget deficits—more work must be done to rein in high spending.

Trump’s tariffs could help plunge Alberta back into deficit. To help stabilize provincial finances over the longer term, the Smith government should focus on what it can control—and that means reining in spending.

Tegan Hill

Tegan Hill

Director, Alberta Policy, Fraser Institute

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FEMA Quietly Slid $59 Million Out The Door For Illegal Migrants To Put Their Feet Up At ‘Luxury Hotels’: Musk

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From the Daily Caller News Foundation

By Jason Hopkins

“That money is meant for American disaster relief and instead is being spent on high end hotels for illegals!” he continued. “A clawback demand will be made today to recoup those funds.”

The Federal Emergency Management Agency (FEMA) handed out $59 million to “luxury” hotels in New York City to house illegal migrants, Elon Musk said Monday.

Musk — who leads the Department of Government Efficiency (DOGE), a temporary agency within the Trump administration tasked with weeding out frivolous spending by the federal government — said it was  his DOGE team that made the discovery. The top White House official said the payment was in violation of President Donald Trump’s executive order and efforts would be made to recover the funds. 

“The @DOGE team just discovered that FEMA sent $59M LAST WEEK to luxury hotels in New York City to house illegal migrants,” Musk posted on X. “Sending this money violated the law and is in gross insubordination to the President’s executive order.”

“That money is meant for American disaster relief and instead is being spent on high end hotels for illegals!” he continued. “A clawback demand will be made today to recoup those funds.”

The details around the alleged payout are not completely clear. FEMA did not immediately respond to a request for comment from the Daily Caller News Foundation, nor did a spokesperson for DOGE.

Former White House press secretary Karine Jean-Pierre in October denied the Biden administration was using FEMA funds for migrant accommodations, but in 2022 she suggested that the agency was assisting cities with the migrant crisis.

On his first day back in office, Trump signed an executive order that placed a temporary suspension on refugee resettlement into the United States. The president additionally noted how some major cities, like New York City and Chicago, have requested federal aid to help manage the massive influx of migrants entering their jurisdictions.

The president additionally signed an executive order placing a freeze on federal grants and loans as it conducts a review of the government’s spending, but that order has since been blocked by the courts.

However, New York City officials have a long history of placing illegal migrants into four-star hotels as they’ve struggled to find accommodations for the sheer number of asylum seekers flocking to the Big Apple.

New York City began housing migrants in the four-star Collective Paper Factory hotel around August 2023 after it was reorganized into a Department of Homeless Services emergency shelter. The five-story Collective Paper Factory itself is equipped with a restaurant, a gym, a bar, meeting rooms for guests and communal spaces.

The “chic” Square Hotel was converted into housing for migrants. Other “upscale” hotels in the Big Apple have also been converted into migrant housing in the past as city officials continue to deal with the migrant crisis, including The Row, which has also been described as a “four-star hotel.”

“A 4-star hotel is considered luxury lodging,” according to Kayak, a company that provides hotel booking services. “Guest rooms are noticeably more spacious, with top-quality linens, pillowtop mattresses, bathrobes, slippers, minibars, and upscale toiletries, plus equipped kitchens.”

NYC’s Department of Homeless Services was reportedly seeking a contract with local hotels to provide roughly 14,000 rooms in order to shelter migrants through 2025. City officials anticipated spending on migrants in need of housing for the current fiscal year and the past two years combined will exceed $2.3 billion, with a significant amount of these costs going toward hotel rent.

The Big Apple — a sanctuary city jurisdiction with strict laws restricting cooperation between local law enforcement and Immigration and Customs Enforcement — has become a major destination for the massive number of illegal migrants who’ve flocked into the United States. Roughly 230,000 migrants have arrived in NYC since the spring of 2022, according to data provided by the mayor’s office.

FEMA underwent an internal investigation in November after it was uncovered that a supervisor reportedly instructed disaster relief workers deployed in the aftermath of Hurricane Milton to avoid houses with Trump signs.

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Judge blocks Musk’s Department of Government Efficiency from accessing Treasury records

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From LifeSiteNews

The emergency ruling comes as 15 Soros-installed AGs seek to block Elon Musk and the Department of Government Efficiency (DOGE) from access to information that would reveal how activist groups in blue states have been funded by the U.S. government.

In a stunning and sweeping emergency injunction that has even stunned the people who demanded it, a Manhattan-based district judge has just removed Secretary of Treasury Scott Bessent from his authority over the Treasury Department; blocked any political appointee from accessing records within the Treasury Department; blocked any “special appointee” of President Trump from records within Treasury; and demanded that all information previously extracted be destroyed.

The emergency injunction, signed by District Judge Paul Engelmayer in Manhattan, was determined without any input from the Trump administration and applies until Friday, February 14, 2025, when U.S. District Judge Jeannette A. Vargas will hear the full arguments of the lawsuit.

The emergency ruling comes as a result of 15 (Soros-installed) attorneys general from New Jersey, New York, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, Nevada, Rhode Island, and Vermont all filing suit in New York seeking to block Elon Musk and the Department of Government Efficiency (DOGE) from access to information that would reveal how activist groups in their states have been funded by the U.S. government.

READ: Judge blocks Trump plan that would put thousands of USAID staff on paid leave

From Reuters:

The lawsuit said Musk and his team could disrupt federal funding for health clinics, preschools, climate initiatives, and other programs, and that Republican President Donald Trump could use the information to further his political agenda.

DOGE’s access to the system also ‘poses huge cybersecurity risks that put vast amounts of funding for the States and their residents in peril,’ the state attorneys general said. They sought a temporary restraining order blocking DOGE’s access.

The judge, an appointee of Democratic former President Barack Obama, said the states’ claims were ‘particularly strong’ and warranted him acting on their request for emergency relief pending a further hearing before another judge on February 14.

‘That is both because of the risk that the new policy presents of the disclosure of sensitive and confidential information and the heightened risk that the systems in question will be more vulnerable than before to hacking,’ Engelmayer wrote.

New York Attorney General Letitia James, a Democrat whose office is leading the case, welcomed the ruling, saying nobody was above the law and that Americans across the country had been horrified by the DOGE team’s unfettered access to their data.

‘We knew the Trump administration’s choice to give this access to unauthorized individuals was illegal, and this morning, a federal court agreed,’ James said in a statement.

‘Now, Americans can trust that Musk – the world’s richest man – and his friends will not have free rein over their personal information while our lawsuit proceeds.’

Engelmayer’s order bars access from being granted to Treasury Department payment and data systems by political appointees, special government employees and government employees detailed from an agency outside the Treasury Department.

The judge also directed that anyone prohibited under his order from accessing those systems to immediately destroy anything they copied or downloaded.

The order by the judge is transparent judicial activism; it will almost certainly be overturned and nullified by later rulings. However, it creates blocks and slows down the goal of DOGE and the objective of the Trump administration.

On what basis do states think they can sue the federal government to stop the federal government from auditing federal spending? How can a judge block the executive branch from executing the functions of the executive branch? This lawfare activism is ridiculous.

Within the ruling:

… restrained from granting access to any Treasury Department payment record, payment systems, or any other data systems maintained by the Treasury Department containing personally identifiable information and/or confidential financial information of payees, other than to civil servants with a need for access to perform their job duties within the Bureau of Fiscal Services who have passed all background checks and security clearances and taken all information security training called for in federal statutes and Treasury Department regulations… [Emphasis added.]

So the unelected bureaucracy is in charge and not the secretary of the Treasury?

Reprinted with permission from Conservative Treehouse.

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