Premier Doug Ford is touting Canada’s electricity, oil and critical minerals as potential leverage in the escalating U.S. trade war, but experts warn our hand may be weaker — and much riskier — than his tough talk implies.
Canada does not have as much clout over U.S. electricity supplies as Ford has suggested, and moving to weaponize oil and critical minerals could be “dangerous,” industry analysts told the Star.
“Using it as a political tool, even describing it that way, is a dangerous game,” said Heather Exner-Pirot, a senior fellow at the think tank Macdonald-Laurier Institute, referring to cutting off oil exports south of the border.
In a war of words with U.S. President Donald Trump on Monday, Ford floated a list of ways Canada could retaliate against the U.S. in response to new tariff threats targeting Canadian cars and auto parts.
“Everything is on the table,” he said, including restoring a 25 per cent surcharge on Ontario electricity exports sent stateside. Ford also suggested Canada could restrict oil and gas exports to the U.S. and “charge triple” for potash, uranium and rare earth metals.
Using Canadian oil and energy exports as a bargaining chip was a non-starter for Prime Minister Mark Carney just a month ago, when he said there was “no value” in doing so.
But Carney hedged Saturday when asked about the same tactic at the news conference, saying only, “We’ll see.”
On the electricity front, Ford may need a reality check, as the U.S. is not as dependent on Canada as he thinks, said Mark S. Winfield, a professor of environmental and urban change at York University.
Canada supplies most of the electricity the U.S. imports, he said, but that amounts to less than two per cent of overall U.S. electricity generation.
“It’s just not a leverage point,” Winfield said.
Ontario has no long-term supply contracts with the U.S., meaning the states it trades with could more easily turn to alternatives, Winfield explained. Quebec and Manitoba have long-term agreements with U.S. customers, but have seen their hydroelectricity exports decline significantly because of drought.
Thanks to the nuclear plants that churn out power around the clock, the province often ends up with a surplus that needs to go somewhere.
“It’s more a case of we ask them to take power off our hands as opposed to being dependent on us,” Winfield said.
Following a phone call with Ford on Monday afternoon, Alberta Premier Danielle Smith issued a statement rebuffing the idea of using oil exports as leverage as trade tensions escalate.
“As I’ve said in the past, cutting off Alberta energy exports to the U.S. would be extremely harmful to Canadians and is not a viable option,” Smith said.
The U.S. is currently paying Canada more for its oil because of high prices, and curbing exports would mean sacrificing that revenue, said Exner-Pirot of the Macdonald-Laurier Institute.
With the Trans Mountain pipeline running at full capacity, she added that there is little room to divert those barrels to other markets and nowhere to store that volume, leaving producers with no choice but to shut in oilsands production.
“The things we would do would harm us as much as them,” she said, warning that cutting off oil could also push the U.S. to reduce its reliance on Canadian crude over the long term, potentially by turning to suppliers such as Venezuela.
The move could also damage Canada’s brand as a reliable and trustworthy energy supplier to other countries, Exner-Pirot added.
Elizabeth Steyn, a University of Calgary law professor specializing in critical minerals, said Canada needs to exercise extra caution when it comes to using potash, uranium and nickel exports as leverage.
Potash would be the hardest for the U.S. to replace in the short term, but tariffs or export restrictions would also hurt Canadian producers, for whom the U.S. is the largest market, Steyn said.
Sudbury, Ont., is home to one of the world’s major nickel-producing regions, but the U.S. could also turn to alternative suppliers such as Indonesia and the Philippines, she said.
The risks are particularly acute for Canada to restrict uranium exports, given the mineral’s military applications in the U.S., Steyn added.
“We can hurt them in the short term with things like potash for sure, uranium potentially in the medium term, but the flak that we would get for ourselves is potentially bigger for us,” Steyn said.
