Nationalisms are in most cases multifactorial and difficult to understand. However, on other occasions, there are factors that outweigh others and are evident. This appears to be the case in the Alberta region of Canada. This vast land, if it were an independent country, would be among the five largest oil producers in the world, which gives it juicy income. With Donald Trump headed to the White House and the threat of a full-scale trade conflict looming on Canada’s horizon (oil included), Alberta appears closer than ever to Washington and further than ever from Ottawa. If the US imposes tariffs, Canada is willing to respond and Alberta does not like that, which wants to continue selling its oil to the neighboring country. In this way, the imposition of an oil embargo on the United States, as suggested by the Minister of Foreign Affairs of Canada, Mélanie Joly, in response to Trump’s tariff threats to her country, would provoke a “crisis of national unity”it was warned this Monday from the Canadian province.
The head of Government of Alberta, the conservative Danielle Smith, stated in a press conference that, if the Canadian Government responds to the 25% tariffs of the US president-elect with an oil embargo, Canada “will have a crisis of national unity on its hands,” at the same time as a crisis with the US. “We simply will not allow it,” said Smith, who met with Trump at his mansion in Florida on Saturday. On Sunday, Joly herself, who is emerging as the person most responsible for designing Canada’s response to the threat of tariffs, declared that “everything is on the table” when asked if the Government could embargo oil sales to the United States.
Canada is one of the largest oil producers in the world and 84% of Canadian production comes from the Alberta tar sands. It is estimated that, in 2024, Canada produced a record 5.3 million barrels of oil per day, 10% more than in 2023, of which 80% were exported. 97% of Canadian crude oil sales have the US as their final destination. In 2023, 60% of the oil imported by the US came from Canada. Most of that crude oil comes from Alberta and expectations were very high, just as the large TMX pipeline (carrying Alberta crude oil to Canadian ports) was gaining traction.
The US trade deficit
In 2023, the US had a trade deficit of $40.6 billion in goods and services with Canada, mainly because of the huge quantities of Canadian oil and gas that the US imports and which have led Trump to claim that the US “subsidizes” its northern neighbor. .
Smith has already threatened in the past to promote the independence of Alberta if the Canadian government imposes measures that restrict activity in the oil sector. In 2022, the Smith Government passed a law, called Alberta Sovereignty in a United Canada, that allows the province to ignore federal laws, although the legislation also makes clear that it has not been designed to achieve independence from the country. Now, the possible annexation of Alberta to the US or the creation of a kind of oil macrostate (a special union of some kind) is gaining more and more force.
The threat to use Canadian energy exports as a weapon to avoid US tariffs has been raised several times since Trump announced he would tax Canada’s exports. The head of Government of the province of Ontario, Doug Ford, already said several weeks ago that he could retaliate against the US by cutting off electricity exports that supply energy to 1.5 million homes in New York, Michigan and Minnesota. .
“An eye for an eye”
Canada’s ambassador to the US, Kirsten Hillman, has spoken along similar lines, defending an “eye for an eye” by her country in the face of Trump’s threats. “With all due respect to President Trump, there may be other ways to meet those needs, but they will be more expensive, less reliable and will lead, as I say, to a bit of tit-for-tat, when in reality what we should be doing is working together”. Hillman said in an interview with Bloomberg, taxing and undercutting Canadian products would be costly for the U.S. economy and would force U.S. companies to turn to suppliers like China and Russia.
There is a lot at stake in this fight and all the actors involved know it. Trump does little to hide how greedy an oil epicenter is so close and, furthermore, confronted with the central power of his own country. Alberta’s pro-independence impulses are not new and Trump is tightening the screws at a time of clear political weakness in his northern neighbor. After years in power, Justin Trudeau’s Liberal government has begun to wobble dangerously, causing the president to throw in the towel and the conservative opposition have all the ballots to sweep elections that will not take long to arrive.
Waiting for the conservatives, theoretically closer to Trump, to prevail, The situation with Alberta threatens to continue opening up like a dangerous crater for Canada. The data leaves no room for doubt: although the region represents only 11% of the country’s total population, it accounts for more than 15% of its GDP. Their huge tax revenues thanks to oil are a real bounty that Ottawa does not want to lose and that in the province confirms the axiom that Canada cannot survive without them, but they can without Canada.
The latest macro data from Canada is especially revealing in this regard. The 0.3% month-on-month increase in GDP in October was much larger than the consensus (and preliminary) estimate of a 0.1% increase. Much of this strength was due to a 2.4% rebound in mining, oil and gas extraction, which was in line with data from Alberta, which showed oil production in the province reached a record level at the beginning of the fourth quarter.
Due to this same situation, Alberta is the area of Canada that registers the greatest support in polls for an eventual annexation with the United States. Although independence is its goal, ‘getting in the face’ of Ottawa and obtaining a beneficial regime by approaching Washington are points that are always on the table.
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