The threat of US sanctions has already inspired dangerous plans for fossil-fuel infrastructure in Canada, and attacks on working-class interests, argues John Clarke

Canadian business interests are scrambling to respond to the looming threat of massive tariffs on the products that they export to the US. Less than a week after postponing this measure for at least a thirty day period and potentially reconsidering it, Trump has now announced that a 25% tariff will be imposed on all steel and aluminium imports, including those that come from Canada. Such unpredictability is a notorious feature of his method of operating.

When it comes to Canadian oil exports, Trump had initially proposed that these would face a 10% charge, with 25% imposed on other products, but increases in these rates are entirely possible. Indeed, it is highly likely that Canadian retaliatory tariffs would be responded to with even more severe measures.

In this situation, as the CBC puts it, Canadian businesses are considering ‘how to reduce their reliance on what used to be our most reliable partner as both an export market and a source of all manner of goods.’ Fossil fuel interests are now developing plans along the same lines, with some dreadfully serious consequences in terms of the climate crisis and environmental degradation.

Another pipeline

Canada’s oil production is centred in Alberta and some 85% of that province’s oil exports go to the US. Beyond this, ‘(e)ven some Canadian-bound oil flows through the United States along Enbridge’s Line 5 pipeline, which runs through southern Manitoba and a corner of North Dakota into Minnesota, Wisconsin, Michigan and eventually southern Ontario.’ Should Trump interfere with that flow of oil or follow through with his tariff measures, the implications for Canada’s fossil fuel companies are enormous.

So it is that the threats posed by the protectionist Trump administration have led to some urgent deliberations on export strategies and transport options by the representatives of an oil and gas industry that the CBC assures us ‘will still be around for a few more decades.’

Among the options that are being put forward is a previously rejected idea of ‘transporting oil across the northern Manitoba muskeg and filling tankers at a port on Hudson Bay.’ Though such a project would have dire implications, ‘in this particular moment, nothing is off the table, including a once-fantastical sounding Alberta-based proposal to thread an oil pipeline parallel to the Nelson River, along the south side of Wapusk National Park and below a section of Hudson Bay itself to a floating, offshore terminal capable of servicing oil tankers with ice-reinforced hulls.’

Similar ideas to this were under discussion in 2023 and it was noted at the time that ‘the southwestern coast of Hudson Bay is too remote for cleanup crews to remediate oil spills and too ecologically fragile to sustain more industrial activity.’ There is no doubt that such a vast and costly project would have appalling consequences on the area and would represent a further encroachment on the rights of Indigenous populations. It would also signal a clear readiness to reconfigure and perpetuate fossil fuel extraction in the face of an intensifying climate disaster.

An article in the National Observer, in 2021, noted that Canada was one of the ten worst carbon emitters on the planet in absolute terms. However, with its relatively small population, Canada ‘is either the worst, or the second-worst, polluter in the world’ on a per capita basis. As the article points out, ‘for the country to be one of the top 10 carbon emitters with so few people shows Canada’s carbon footprint is closely tied to the extraction and refining of fossil fuels for export, rather than our domestic energy needs.’ It is clear that the trade war crisis will be used as a way for fossil fuel companies to continue their destructive role under the cover of acting to protect the ‘national interest’ from the threat posed by Trump’s tariffs.

The perpetuation of the production of dirty oil is but one way in which US tariff measures and a resultant trade war will be used to advance the interests of capitalists and intensify attacks on working-class people. Nikolas Barry-Shaw notes that ‘the country’s corporate class (are) pushing their long-standing wishlist of corporate tax cuts, deregulation, and austerity’ in response to the crisis. At the present time, the ‘Business Council of Canada, the Canadian Chamber of Commerce, and other corporate lobby groups are pressuring political leaders to jack up military spending, clamp down on migrants at the border, and hand even more resources to oil and mining companies—claiming these policies will make Trump’s threats go away.’

Writing for Counterfire, David Bush has explained the high level of integration between the Canadian economy and that of the US, under which we see ‘…roughly $3.6 billion worth of goods and services crossing the border daily. For bosses, this has been an incredible success story.’ However, ‘(f)or workers on both sides of the border, this integration has come at a price. Capitalists used the threat of capital mobility to attack unions and wrench concessions from workers.’

It is hard to overstate just how serious the turn of the US towards a protectionist approach is for Canadian capitalism. A trade war with Canada would have a very serious economic impact on the US but, for the Canadian economy, the implications are truly enormous. Research conducted by Scotiabank shows that ‘(t)rade between the two countries accounted for 77% of total Canadian goods exports and 63% of Canadian goods imports, but only 18% of total US goods exports and 14% of US goods imports.’

‘National interest’

That a trade war will have a devastating impact on Canada is beyond dispute but this doesn’t mean that the interests of workers and capitalists can or should be reconciled. A Canada-U.S. Economic Summit was convened in Toronto on 7 February and, in announcing it, Justin Trudeau’s office promised to ‘bring together Canadian leaders in trade, business, public policy, and organized labour. Using their sectoral expertise, the leaders will explore ways to grow Canada’s economy, make it easier to build and trade within the country, diversify export markets, and rejuvenate productivity.’

At this gathering, Trudeau made the most of Trump’s bluster about annexing Canada and presented himself as a veritable freedom fighter. With some justification, the Guardian observed that the trade war threat has ‘ushered in a new era of patriotism. With an election looming, all parties are scrambling to portray themselves as patriotic and ready to defend the country’s sovereignty.’

Rather than have trade union representatives sitting around the table with business leaders, a fight needs to be taken up for the interests of working-class people. There can be no doubt that the approaches that capitalists and governments will take in the face of the trade war will run against those interests.

The strategy that we may expect to be developed, in response to a greatly changed relationship with Canada’s major trading partner, will involve efforts to seek out new markets and diversify exports but it will also focus on a greatly increased exploitation of workers and the further weakening of trade unions. Even as jobs are lost and the price of consumer goods goes up, a concerted drive to intensify austerity and undermine systems of social protection will be undertaken. To the extent that illusions about common interests with those who are waging these attacks are fostered, the struggle against them will be greatly undermined.

That Canada’s fossil fuel companies see the present situation as an opportunity to perpetuate deadly carbon emissions and further an agenda of environmental degradation, brings into sharp relief just how absurd and dangerous it is to subordinate the class struggle to a fanciful shared national interest. We certainly have common interests with workers in Mexico and the US but, when it comes to Canada’s capitalists and their political representatives, we are most definitely not all in this together.