(Bloomberg) -- Since winning the US election, Donald Trump has taunted Canadian Prime Minister Justin Trudeau by calling him governor of a 51st US state, threatened 25% tariffs, and vented that the US is getting ripped off by its northern neighbor because of a trade deficit.
Pierre Poilievre — the Conservative leader who is the front-runner to beat Trudeau’s party in the next election — says he could increase Canada’s exports to the US and strike a “great deal” with Trump anyway.
Poilievre sketched out an elevator pitch to the US president-elect during an interview with right-wing Canadian influencer Jordan Peterson, posted online Thursday. If elected, Poilievre said he plans to speed up approvals to build oil refineries, liquefied natural gas plants, nuclear facilities and hydro power. Canada has the ability to grow its electricity surplus with the US, helping to run the data centers that are essential to its booming artificial intelligence sector, he added.
“If you look at the history of President Trump, he negotiates very aggressively and he likes to win, but in the end, he doesn’t appear to have a problem if his counterparty also wins,” Poilievre said. “And so I think that we can get a great deal that will make both countries safer, richer, and stronger.”
But Trump should also be aware that Canada currently sells its oil and gas to the US at “enormous discounts,” Poilievre told Peterson.
“Yes, it is a ripoff — Canada is ripping itself off,” the Conservative politician said.
The US trade deficit in goods with Canada was $50.5 billion through the first 10 months of the year. It would be larger, but Canadian crude is sold cheaply to US refineries, particularly in the Midwest.
The discount exists because Canada has few alternatives. There’s only one oil-export pipeline that goes to an ocean port in British Columbia, and the country is only now developing a liquefied natural gas industry with the capacity to ship large quantities of gas to Asia. So most of the fuel goes south.
“That is the true story — it’s the pathetic story — of our trade surplus, is that we’re actually handing over our resources, stupidly,” Poilievre said. “It’s not the Americans’ fault, it’s our fault, we’re stupid. And we’re going to stop being stupid when I’m prime minister.”
Poilievre argued that Trump has reason to be annoyed with US deficits with China and Mexico — “from a mercantilist point of view” — because they siphon away American jobs. But the trade gap with Canada is different, the Conservative leader said, because it’s driven by the sale of commodities that Canada has and the US needs, and actually supports American jobs where they’re processed downstream.
“The last thing he should want to do is to block the underpriced Canadian energy from going into his marketplace,” he continued, appealing to Trump. “In fact, what I would encourage him to do is to approve the Keystone pipeline,” he added, referring to a long-running Keystone XL project designed to ferry some 800,000 barrels a day from Alberta’s oil sands to southeast Nebraska, where it would link up with existing pipelines.
President Joe Biden revoked a key permit for that project after taking office in 2021, effectively killing it. Trump is in favor of Keystone XL, but there has been no sign yet that South Bow Corp., owner of the Keystone system, would want to revive it.
Lost Jobs
If Trump somehow stopped Canada’s trade surplus with the US immediately, American workers at refineries would lose their jobs and consumers would pay higher prices, Poilievre said. He argued that Canada should instead ramp up extraction of resources such as critical minerals that so both countries can get richer while weaning themselves off supplies from unfriendly states like China.
Poilievre added that he’s held talks with the conservative leaders of hydrocarbon-rich provinces Alberta and Saskatchewan, asking them to be ready to expedite resource project approvals.
Poilievre said he would address US concerns about border trafficking and military spending, adding that a Conservative government would invest the planned gains of his energy-exporting strategy in Arctic security. Trump has long complained the US is being shortchanged by allies, and Canada is currently far short of the North Atlantic Treaty Organization goal to spend 2% of gross domestic product on defense.
“I can fund a more robust military and continental defense if I have more free trade with the greatest economy the world has ever seen — and we can both win,” he said.
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