Connect with us

Business

Trump’s oil tariffs could spell deficits for Alberta government

Published

4 minute read

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

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Bruce Dowbiggin

Why Best Friends Are Fighting: Tariffs Are Just Trump’s First Salvo

Published on

Trump is holding a mirror to a postmodern Canadian state that still thinks it’s Bob & Doug McKenzie and polite folk opening the door. Maybe it was at one time, but since Justin Trudeau spread his chocolatey goodness on the nation it’s now a world centre for money laundering that won’t pay its defence obligations.

The hysteria was mint this past weekend from panicky Canadians acting as if Donald Trump’s tariffs were a Pearl Harbor sneak-attack. They booed the Star Spangled Banner at sporting events, had conniption fits of self pity (‘we’ve been friends for so long!”) and generally acted like fainting goats by forgoing U.S. sun holidays.

Whatever the merits of Trump’s beefs the indignant reaction revealed a very unsettled nation. Punishing America by pulling wines you’ve already paid for off the shelves is baffling. Cancelling a Star Link contract with Elon Musk is just a self goal. (A chastened Musk replied, “Oh well!”) Alberta premier Danielle Smith, who’d used negotiating to get a cutout for Canadian oil, being roundly called a vendu by the righteous Eastern horde was precious.

Charter members of the crumbling legacy media outdid themselves in promoting Trudeau’s fanciful Team Canada theme. “This is a mind poisoned with grievance and resentment,” raged CBC panelist Andrew Coyne. “So coked up on his own bile that even in a moment of maximum national peril his first thought is how to use it to settle scores with the rest of the country.”

Well then. It was all rather unseemly. Noted Dilbert creator Scott Adams, “Canada’s response to Trump’s tariffs is to be publicly sad about it.” But are Trump’s concerns genuine? Is he picking unfairly on a longtime pal? The fact is that Trump is holding a mirror to a postmodern Canadian state that still thinks it’s Bob & Doug McKenzie and polite folk opening the door. Maybe it was at one time, but since Justin Trudeau spread his chocolatey goodness on the nation it’s now a world centre for money laundering that won’t pay its defence obligations.

Example: TD Bank was just fined $3B by US regulators for laundering fentanyl drug money back to Communist China. It’s the largest such fine in U.S. history.  A fine TD paid without complaint. Trudeau’s Canada is a credit-bubble real estate play inside a WEF construct wrapped up in an entitled clique that sits in first class but only pays economy. (And don’t get us started on the unsolved Sherman murders.)

Having gotten their news from CBC and Toronto Star, the average CDN does not understand any of this. While the Libs/ NDP swoon over climate and pronouns, Canada has become a place that Trump and other nations simply don’t trust. Security officials fear that anything said to Trudeau’s government will end up getting to China or other bad actors. And many of those same bad actors are domiciled in Canada at the moment. (The RCMP say there are over 4,000 separate groups dealing drugs in Canada.)

Canada’s exclusion from surveillance organizations like AUKUS and the G7 Quint talks is enough to tell you that Trump is not alone in distrusting Canada. Under the previous Obama doctrine, Canada was cool so long as it did DEI, ESG and had kittens over climate. Biden let the Great White North snooze away under Trudeau. The new American administration, however, has a higher bar of expectations.

Ones Trudeaupia has not met. How do you describe America’s sense of astonishment when it asked its “loyal friend” Canada not to import 5,000 undocumented Gazans during this current shooting war, not wanting terrorist sympathizers along its northern border. Then, out of spite, Trudeau’s response was to bring them in, give them healthcare and do photo ops with them?

Trudeau has also lectured Americans for electing Trump and not a woman in 2024. No wonder Trump played them last weekend about their lax border security. One of the “brilliant” ripostes on borders — repeated by all the clever people— was that only one percent of America’s fentanyl comes from Canada. For those who think that’s a mic-drop moment consider: that’s fentanyl seized by America at the border.

Here, Canada’s international crime agency destroys the one-percent argument. Canada is a major manufacturer and distributor of fentanyl. How major? There is a technique used by international drug and money launderers called the Vancouver Model.

As a recent discovery of 8 Kg during a truck stop in Swift Current illustrates, the amounts undiscovered in Canada and the U.S. that originate from shipments to Montreal or Vancouver are way more than the CDN media parroted over the weekend. For those booing the Star Spangled Banner, note that 8 kg. is enough for four million deadly doses of fentanyl. (B.C. NDP premier David Eby had to confess he can’t even begin to inspect all the drugs flowing through Vancouver).

This story of a Punjabi driver arrested in Manitoba with $50M in meth in his truck gives you the flavour. Last month, Toronto police seized 835kg from a truck and stash houses across the city. And, say experts, there are more terror suspects coming from Canada to America than from Mexico. Now tell us why the unchecked importation, distribution and profits from the drugs are not significant in a trade deal.

Speaking of truckers, Canada’s explosion in newly arrived cross-border truck drivers is another huge issue for Americans. As Toronto business writer Stephen Punwasi @stephenpunwasi explains a good portion of the “students” coming into the nation are getting a very different education on life in Canada. “Canada had no checks or balances for its study program. No background checks or school verification. Just show up at the airport w/ proof of funds, and a letter they won’t verify. That’s it. ” These “graduates” quickly end up in a rig running contraband drugs, guns and tech to supplement their minuscule earnings.

“Between 2017 & 2024, Ontario went from 80 truck driving schools to 280. The province has 6 auditors for 600 private career colleges—almost half for trucks, apparently. No enforcement standards.

“To recap,” continues Punwasi:

  • “money laundering capital of the world

  • – no school regulations

  • – criminals run certifications

  • – desperate folks from developing countries w/no standard of entry

  • – no scrutiny for x-border traffic”

Canadian trucking executives know the problem in the industry. They say new entrants make no money trucking, but they do make for easy “‘runners’. It is rampant. One executive says his firm has virtually exited the cross-border business, because of the changing demographics. These truckers— many of them speaking no English— are housed in suburban neighbourhoods in Brampton or Mississauga or Surrey, stacked by the dozens in barracks homes in between their sorties to the U.S. and the ROC. Attempts to restore local zoning laws are fought by the ringleaders.

But hey, says CBC, Trump exaggerates the problem. He’s also contemptuous of the current attempt to slide climate alarmist Mark Carney into Trudeau’s seat. The dread of being lectured by a CBC-approved suit like Carney is only leavened by the prospect that he can deal with Pierre Poilievre when— if— the Liberals ever let Canadians voice their will. This is what Canada’s Left call progress. Save the tundra and the Arctic swallow but crater the economy.

A final feature of the pearl clutching this past weekend was the idea that Trump would somehow invade or otherwise claim Canada as a 51st state. Canadians seem to feel that Trump’s job is to pacify their feelings, not act on behalf of those Americans who decisively elected him and his mandate. Like victims of a high school break-up Canadian progressives are now tearing up all the letters and sending back the jewelry from their tryst. Memo to Canada: Being U.S. president is not joining a book club. As such you don’t elect a trust-fund poseur.

Whatever Trump’s jest, the last thing he wants is the culture nightmare of Quebec, the vast land claims of the native tribes, the welfare status of the Maritimes and the unbearable smugness of the Flora MacDonald Marching Band in Ontario. If Canada or Canadians are to join America it will be because they’ve asked in, not be captured. Trump would dictate the terms, and he doesn’t want a dozen new Mississippis, especially ones with poutine.

For now, the 30-day pause in tariffs allows time to drop the theatrics and get on with the reality of an economy that will consume Canada’s economy at the present rate. By week’s end even Trump’s vitriolic critics like the Globe&Mail were offering backhanded acknowledgements that, however crude they found the president’s tactics, he did wake up Canadians to the issue of Canada’s lassitude on defence and the border. Doomberg summed up the conflict. “The economic wisdom of applying tariffs is worthy of debate, but the threat of tariffs has proved the perfect instrument for the task. Having weighed 250 daily American deaths on the scale of trade-offs, Trump’s actions have finally acknowledged reality. Godspeed’.”

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster. His new book Deal With It: The Trades That Stunned The NHL And Changed Hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org. You can see all his books at brucedowbigginbooks.ca.

Continue Reading

Business

90% of Ukraine news outlets get funding from USAID: new report

Published on

From LifeSiteNews

By Matt Lamb

USAID, targeted by Elon Musk and Donald Trump for cuts, is a heavy funder of news outlets in Ukraine, according to a new report. The agency has come under scrutiny for wasteful and ideological projects.

The United States Aid for International Development (USAID) provides funds to 90 percent of Ukrainian news outlets, according to a new report from the Columbia Journalism Review and Reporters Without Borders.

While much focus has been on USAID and other federal entities subscribing to news outlets such as Politico, a broader issue may be taxpayers paying for news coverage in foreign countries.

Working off data from Reporters Without Borders, the Columbia Journalism Review reported that “USAID had boasted of supporting more than six thousand journalists, around seven hundred independent newsrooms, and nearly three hundred media-focused civil society groups in thirty or so countries.”

The Trump administration reportedly froze $268 million for these endeavors.

“RSF also noted the harsh effect on journalism in Ukraine, where 90 percent of news organizations rely on USAID funding, some very heavily,” the Journalism Review reported.

The United States has spent nearly $66 billion on direct military assistance to Ukraine in its ongoing war against Russia. Taxpayers have sent another $120 billion or so to the country in other foreign aid, according to an inspector general report current as of September 30, 2024.

The journalism groups released the reports ostensibly to defend U.S. funding of outlets.

On a related issue, the Trump administration is also cutting off taxpayer-funded subscriptions that government employees set up with news outlets.

“I can confirm that the more than $8 million taxpayer dollars that have gone to essentially subsidizing subscriptions to Politico on the American taxpayers’ dime will no longer be happening,” White House Press Secretary Karoline Leavitt said during a press conference yesterday.

“The DOGE team is working on canceling those payments now,” she said.

She stated further:

Again, this is a whole-of-government effort to ensure that we are going line by line when it comes to the federal government’s books. And this president and his team are making decisions across the board on ‘Do these receipts serve the interests of the American people? Is this a good use of the American taxpayers’ money? If it is not, that funding will no longer be sent abroad and American taxpayers will be seeing significant savings because of that effort.

Conservatives celebrated the news.

“The Federal Government is not a good steward of your tax dollars,” Josh Tanner, an Idaho state representative, wrote on X. “They spent $8 Million on propaganda media. This is even more of a reason for Idaho tax dollars to be accounted for, applied appropriately, and reduced where necessary. The Fed has failed, our state must succeed.”

“Even if the govt money to Politico wasn’t an outright grant, providing $8 Million in taxpayers funds for ‘subscriptions’ to a super Lefty publication is just absurd and abusive to hard-working Americans!” conservative commentator Steve Cortes wrote.

payroll issue with Politico‘s payroll was initially blamed on the funding freeze, though the company said it was a “technical error” that created the problem.

USAID under scrutiny, uses tax dollars to promote DEI around the world

The Trump administration has closed, at least temporarily, USAID. Secretary of State Marco Rubio is now the administrator of the agency, which has funded a variety of ideological projects across the globe.

“USAID has a history of ignoring [the national interest of the United States] and deciding that they’re a global charity. These are not donor dollars, these are taxpayer dollars,” Secretary Rubio said recently.

Leavitt highlighted some of the ideological and wasteful projects funded through this agency, including “$1.5 million to advance DEI in Serbia’s workforce.”

The agency has also been used to pressure conservative, poorer countries into adopting pro-abortion policies, as LifeSiteNews previously reported.

State Department spokeswoman Tammy Bruce highlighted other wasteful projects in a post on X.

She listed projects the freeze had stopped, including “$16 million in unjustified funding for institutional contractors in the gender development offices,” “$4 million to unjustified funding for the Center for Climate-Positive Development,” and “$600,000 to fund technical assistance for family planning in Latin America.”

Continue Reading

Trending

X