Trudeau Government Capping the Canadian Economy (and Energy Industry) Just to Impress International Agencies

The incoming Trump Presidency has promised to “unleash American energy” with plans to “free up the vast stores of liquid gold on America’s public land for energy development.” This week, the Trudeau government unveiled the draft details of its plans for a cap on greenhouse gas emissions from the Canadian oil and gas sector. These proposed regulations would cap all greenhouse gas emissions equivalent to 35 percent below levels in 2019 with the lofty goal of achieving a 40-45 percent reduction by 2030.

It is a plan that the province of Alberta and others contend would be a cap on production and cause elevated prices for consumer goods across Canada, cost up to 150,000 jobs and reduce national GDP by up to C$1 trillion ($720 billion).

These proposals would make Canada the only oil and natural gas-producing country to attempt an emissions cap on such a scale. The regulations propose to force upstream oil and gas operations to reduce emissions to 35 percent less than they were in 2019 by 2030 to 2032. Notably, while hydrocarbon production increased from 2019 to 2022, Canadian emissions from the sector declined by seven percent.

Perhaps significantly, and much to the apparent annoyance of Alberta’s Premier, the Federal announcement was made slightly ahead of the UN COP29 Climate Summit in Azerbaijan. Per the Paris Agreement, each country submits its climate ambitions to UN as National Determined Contributions (NDCs). However, the federal government has also passed the Net Zero Accountability Act, which, by December 1st, 2024, could require even more aggressive reduction targets for 2035. Does this mean that the federal government may be positioning itself to announce even more ambitious emission targets – all to be announced at that conference?

It is unclear whether, how and in what form, the emissions cap will come into effect. With the next federal election slated for late October 2025 and polls that show the current Liberal-NDP coalition government to be far behind the opposition Conservatives, the federal carbon tax and the proposed emission cap have an uncertain future.

Other business interests have voiced concerns about Canada’s increasingly discordant, incoherent climate policies and regulations, which have caused the Canadian oil and gas sector to be at a competitive disadvantage in the global energy market. Clearly, Alberta considers that the Federal government has, once again, overstepped its constitutional bounds with the proposed emissions cap and, along with its victorious Supreme Court challenge against the Impact Assessment Act, has vowed to launch more court challenges. Alberta and other Provinces have contended that, with regional exemptions, the federal carbon tax is being applied unfairly as a patchwork of standards with Alberta, New Brunswick, Saskatchewan, Ontario and Nova Scotia, and the opposition Conservative party, mounting a growing chorus against the Liberal government’s broader price on carbon. By contrast, the proposed regulations for an emissions cap have been aimed specifically at one industry sector – one that is largely concentrated in western Canada.

Meanwhile, Canadian oil production, aided by the new export capacity of the TransMountain Pipeline completed this year, has grown to a record 5.1 million barrels per day making Canada the prime (60%) source of US crude oil imports in 2023. Meanwhile, the industry has been engaged in considerations for the potential development of carbon capture and storage (CCS) to trap greenhouse gasses underground. However, this untested technology would cost billions, needs to be proven on a larger scale and requires industry cooperation combined with all levels of government support.

The Federal announcement, and the hostile reaction from Alberta and possibly other oil-producing provinces, mean that once again, Canadian investment in the oil and gas sector will be confronted with ever more uncertainty as they encounter time-consuming court challenges. These competing political agendas ensure that major Canadian investment decisions will, once again, be deferred while other international jurisdictions race to develop their hydrocarbon export capabilities, investments that are unencumbered by any emissions caps.

Canadians need to consider carefully how these policies and debates are affecting our energy security and standard of living as Canada. In addition to carbon pricing, Canada has already promulgated regulations for EV mandates in the transportation sector, policies that have required tens of billions in subsidies. It has also introduced the complex clean fuel standard and the proposed national clean electrical standards. These policies are affecting not just Canada’s productivity, GDP and exports. By attacking the Western provinces, Ottawa is unnecessarily creating regional tensions and a less politically stable federation. We need to think about how co-operative federalism can be re-established in ways that account for the basic needs of all Canadians – and not just accommodate arbitrary targets for emissions designed to impress international agencies.

Kasha Piquette is an Alberta-based strategic energy advisor and a former Deputy Minister of Alberta Environment and Protected Areas.

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Canada Caves: Carney ditches digital services tax after criticism from Trump

Published on June 30, 2025

Todayville

From The Center Square

By Brett Rowland

Canada caved to President Donald Trump demands by pulling its digital services tax hours before it was to go into effect on Monday.

Trump said Friday that he was ending all trade talks with Canada over the digital services tax, which he called a direct attack on the U.S. and American tech firms. The DST required foreign and domestic businesses to pay taxes on some revenue earned from engaging with online users in Canada.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” the president said. “We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.”

By Sunday, Canada relented in an effort to resume trade talks with the U.S., it’s largest trading partner.

“To support those negotiations, the Minister of Finance and National Revenue, the Honourable François-Philippe Champagne, announced today that Canada would rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the United States,” according to a statement from Canada’s Department of Finance.

Canada’s Department of Finance said that Prime Minister Mark Carney and Trump agreed to resume negotiations, aiming to reach a deal by July 21.

U.S. Commerce Secretary Howard Lutnick said Monday that the digital services tax would hurt the U.S.

“Thank you Canada for removing your Digital Services Tax which was intended to stifle American innovation and would have been a deal breaker for any trade deal with America,” he wrote on X.

Earlier this month, the two nations seemed close to striking a deal.

Trump said he and Carney had different concepts for trade between the two neighboring countries during a meeting at the G7 Summit in Kananaskis, in the Canadian Rockies.

Asked what was holding up a trade deal between the two nations at that time, Trump said they had different concepts for what that would look like.

“It’s not so much holding up, I think we have different concepts, I have a tariff concept, Mark has a different concept, which is something that some people like, but we’re going to see if we can get to the bottom of it today.”

Shortly after taking office in January, Trump hit Canada and Mexico with 25% tariffs for allowing fentanyl and migrants to cross their borders into the U.S. Trump later applied those 25% tariffs only to goods that fall outside the free-trade agreement between the three nations, called the United States-Mexico-Canada Agreement.

Trump put a 10% tariff on non-USMCA compliant potash and energy products. A 50% tariff on aluminum and steel imports from all countries into the U.S. has been in effect since June 4. Trump also put a 25% tariff on all cars and trucks not built in the U.S.

Economists, businesses and some publicly traded companies have warned that tariffs could raise prices on a wide range of consumer products.

Trump has said he wants to use tariffs to restore manufacturing jobs lost to lower-wage countries in decades past, shift the tax burden away from U.S. families, and pay down the national debt.

A tariff is a tax on imported goods paid by the person or company that imports them. The importer can absorb the cost of the tariffs or try to pass the cost on to consumers through higher prices.

Trump’s tariffs give U.S.-produced goods a price advantage over imported goods, generating revenue for the federal government.

Brett Rowland

Investigative Reporter

Business

Trump on Canada tariff deadline: ‘We can do whatever we want’

Published on June 29, 2025

Todayville

From The Center Square

By Brett Rowland

President Donald Trump appears unconcerned about an upcoming tariff deal deadline after abruptly ending all trade talks with Canada as his bid to overhaul world trade continues.

Trump is nearing the end of a self-imposed 90-day deadline to strike deals with nearly every U.S. trading partner as he works to reorder global trade by giving America a competitive advantage through tariffs on foreign goods.

Trump now says that the deadline could be extended past July 9 or even accelerated.

“We can do whatever we want. We could extend it, we could make it shorter. I’d like to make it shorter,” Trump said Friday at the Oval Office. “I’d like to just send letters out to everyone ‘Congratulations, you’re paying 25%.'”

On April 2, Trump announced reciprocal tariffs on nearly every nation that trades with the U.S. Seven days later, he paused those higher tariff rates for 90 days to give his trade team time to cut deals with key trading partners. That 90-day deadline ends July 9 and thus far Trump has brought home two deals: A limited trade pact with the United Kingdom and a trade truce with China.

Commerce Secretary Howard Lutnick told Bloomberg that new deals are on the way, and those could serve as models for others.

“We’re going to do top 10 deals, put them in the right category, and then these other countries will fit behind,” Lutnick said.

He said the U.S. was “close to the finish line” with India. Lutnick also said he had made an offer to the European Union.

Trump’s decision to suspend trade talks with Canada with just days left before the deadline underscored the flexibility of the president’s trade deadline.

“These are very complex negotiations and we are going to continue them in the best interests of Canadians,” Candian Prime Minister Mark Carney said Friday while leaving his office, according to local reports.

Canada has invariably been one of the top two trading partners for the United States for years. In 2024, Canada was the top destination for U.S. exports and the third-largest source of U.S. imports. On the other side, Canada exported 75% of its goods to the United States and imported almost half of its goods from the United States.

U.S. total goods trade with Canada was an estimated $762.1 billion in 2024, according to the Office of the U.S. Trade Representative. U.S. goods exports to Canada in 2024 were $349.4 billion. U.S. imports from Canada in 2024 totaled $412.7 billion. The U.S. goods trade deficit with Canada was $63.3 billion in 2024.

Services trade with Canada, exports and imports, totaled an estimated $140.3 billion in 2023. Services exports were $86.0 billion, and services imports were $54.3 billion. The U.S. services trade surplus with Canada was $31.7 billion in 2023, according to the Office of the U.S. Trade Representative.

Trump put a stop to the talks on Friday.

“We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country,” Trump wrote on Truth Social.

Trump said the digital services tax was a copy of a European Union proposal.

Earlier this month, the two nations seemed close to striking a deal.

Trump said he and Canada Prime Minister Mark Carney had different trade concepts between the two neighboring countries during a meeting at the G7 Summit in Kananaskis, in the Canadian Rockies.

Asked what was holding up a trade deal between the two nations at that time, Trump said they had different concepts for what that would look like.

The tariffs have frustrated Canadian leaders and residents. Tensions between the two neighboring countries have been high. And cities on both sides of the U.S.-Canada border have been affected.

Trump has repeatedly suggested that Canada join the U.S. as its 51st state. He previously called former Canadian Prime Minister Justin Trudeau “governor” regularly.