SASKATOON—The looming threat of potential tariffs on all Canadian goods will affect investments and trade as Saskatchewan and the entire country wait on whether or not President Trump moves forward with his proposal of a 25 per cent tax on all products crossing south of the border.
“It is disrupting the investment environment in Canada. The very threat of tariffs is disrupting the investment environment. I don't know that it's moving it to the U.S. as much as pausing the decisions. The impact in Saskatchewan is that we're in the investment attraction game,” said Moe during a press conference on Wednesday, Feb. 19, at the Saskatchewan Cabinet Office downtown.
“We've seen tens of billions of dollars in the mining sector and the [agriculture] value-added industry that's been attracted here. We're not finished yet. I would say we're just setting the pace with respect to attracting that investment and creating those jobs for Saskatchewan families that live here today and those [who] choose to live here. Anything that impacts investment attraction, like talk of tariffs with our trading partner, will have an impact, not only in this province but across Canada.”
The planned 25 percent tariffs on Canadian aluminum and steel will take effect on March 12. The Trump administration's 30-day reprieve on the 25 per cent tax on other products exported to the U.S., which could have taken effect on Feb. 4, is also less than two weeks old.
Moe said that even though everything is still up in the air—all are potential tariffs, and none have been enacted yet—if Trump's proposal moves forward, Saskatchewan and the entire country should be prepared.
“It would still be our hope that that isn't the case. That being said, we do need to be ready not only from a provincial perspective but be part of a national conversation as well as to determine what the impact of potential tariffs might be and how we're going to best not only support businesses but find a path through them,” said Moe.
“As I said, goal number one is not to have tariffs. If we do happen to have tariffs, goal two is to have them for the shortest period. If you remember, the last time, tariffs were imposed on steel and aluminum. Some counter-tariffs were imposed, and some were precise and selective counter-tariffs.”
Moe just returned from Washington, D.C., where he and other provincial premiers met with members of the Trump administration and other top Republican officials to discuss the proposed tariffs. The Saskatchewan premier then visited Mexico City and Guadalajara for a separate meeting to strengthen trade with their NAFTA partner.
He said the provincial government is ready to take action, if necessary, in case the tariffs were implemented in March. Saskatchewan is in a strong position to have leverage in any business and trade negotiations based on the fertilizer, food, and fuel products produced here, which are necessities in everyday life. Trump is proposing a 10 percent tariff on Canadian oil.
“Tariffs on any of those products will push up the fuel price for American families at the gas station and very quickly will push up the price for groceries when they visit the grocery store. We're in a very, I think, impactful position here in the province. We're also the least reliant proportionally of any province on exports to the U.S.,” said Moe.
“About 55 per cent of our products go to the U.S. That's about the lowest or maybe tied for the lowest of any province across Canada. They are our largest trading partner, and we're most certainly part of the discussion of finding a path to a long-term agreement here. Regardless of whether these tariffs come, we already see that even their threat disrupts much business, especially here in Saskatoon.”
He said steel wholesalers and retailers, not only in the province, would feel the pinch of a 25 per cent tariff on aluminum and steel, mainly if they source the products from other countries. However, this will most impact American consumers.
“We have a steel manufacturer just north of Regina in Everest with many hundreds of people employed directly, and I would say many hundreds and a few thousand more indirectly. To speak to how operationally problematic this can be, that particular steel operator takes most of the cars from Canada and throughout the Midwestern U.S., bringing and recycling them in. They cross the border once. Then, it sends that slate steel, the product, down to a mill in Portland, Oregon, that crosses the border twice. In Oregon, they take that slab steel and make it into a product called plate steel, which crosses the border again as it comes north to either Camrose or back to Regina, where they will make a pipe out of it,” said Moe.
“That's three times it's crossed the border now. Since we haven't successfully built pipelines in Canada, I suggest changing. That pipe often goes south to build a pipeline in North Dakota, Oklahoma, or elsewhere. It crosses the border yet a fourth time, a rudimentary product like steel is crossing the border four to five times in its manufacture until it finds its place in the ground for the next number of decades. Can you imagine how often an auto manufacturer crosses the border with the parts, a tractor manufacturer, or agricultural products? So herein lies the challenge regarding tariffs on any product.”
