With the prime minister back in Canada, a couple of additional things were made known about the meeting with Trump, and one of them was the fact that the “energy” portion of their conversation involved Mark Carney floating the possibility of reviving the Keystone XL pipeline. For those of you unaware, this is entirely an American decision—all of the infrastructure on the Canadian side of the border is pretty much in place, and this project was never in contention. The Trudeau government supported it, but the resistance was on the American side of the border, not only from environmental concerns, but also because there were conspiracy theories developing in places like Nebraska that this was a secret ploy to drain their aquifers. No, seriously. Nevertheless, this is something that the proponent abandoned after Biden rescinded the permits (even though part of the network was built and renamed), so it would need someone to pick it up again.
Meanwhile, US commerce secretary Howard Lutnick spoke virtually at a Eurasia Group event in Toronto, and said that there will be no tariff-free auto deal with Canada, that the most we can hope for is a relationship around auto parts, and that Canada needs to get used to coming in second place to the US. Lutnick also expressed a desire to replace the New NAFTA with bilateral deals rather than a trilateral agreement with Mexico. When Carney later addressed the same event virtually, he said that the government will come to some bilateral agreements with the US, and spoke of “granular discussions” around steel and aluminium tariffs, but didn’t address these comments, just as he didn’t address the reports of Lutnick’s remarks during QP.
It’s hard to know what to make of any of this. After insisting that there was a “rupture” in our trade relationship, this is yet one more proposal to deepen integration and reliance on the American market…but it’s also probably the most viable pipeline for Alberta (though there are proposals to optimise the capacity of the Trans Mountain Expansion that would increase its maximum capacity for west coast exports—not that it’s anywhere near capacity at the moment). On the other hand, if they want to pay for our oil, and also pay their own tariffs to do so, then why not take their money? None of this is going to stop Danielle Smith or the Conservatives from demanding that Carney rip up all of the government’s environmental legislation so that they can crank up production with no consequences (even though there are absolutely environmental consequences that are getting more and more expensive each year), and this isn’t going to create that many jobs in the sector, even if production is increased, given that they are increasingly relying on automation and have been since the last price crash in 2014. But everything is stupid all the time, so this is no exception.
effinbirds.com/post/7804636…
Ukraine Dispatch
President Zelenskyy says that Ukrainian forces are inflicting heavy losses on the Russians in a counter-offensive in the Donetsk region.