Open letter to Premier Smith regarding impending threats of U.S. tariffs

The Honourable Danielle Smith, M.L.A.,

Premier of Alberta

Re: Open letter to Premier Smith for consideration regarding the impending tariff threat from President-Elect Donald Trump

Dear Premier Smith,

On behalf of the Calgary business community, we write to you to thank you for your continued advocacy with our largest trading partner, the United States, and to highlight recommendations for your consideration prior to meeting with officials in Washington.

As you know, Canada and the United States have one of the largest and most comprehensive trading relationships in the world. Alberta alone exported $156.1 billion in 2023 to the United States, comprising more than 94 per cent of our net exports. Canada’s exports in energy products, motor vehicles and parts, consumer goods, metal and non-metallic products and forestry products collectively were valued at $417 billion in 2023. Of that amount energy products accounted for $166 billion.

Trade, by definition, is mutually beneficial to both parties. In the context of energy exports to the United States, this is case. Canada benefits from a revenue and balance of trade perspective, while the U.S., through its refining and upgrading complex, adds significant value to the barrels and natural gas molecules they buy from Canadian producers, which arrive via Canadian pipeline infrastructure. It would be a shame – and economically destructive, to compromise this important relationship that has been in place since the 1950s.

President-Elect Donald Trump’s threat to levy a 25 per cent tariff on all Canadian exports to the United States would have a disastrous impact on Alberta and Canada’s economy. Recent analysis from the Canadian Chamber of Commerce estimates that this would result in Canada’s GDP contracting by 2.6 per cent (roughly $1900 CAD per person) and the United States GDP contracting by 1.6 per cent (approximately $1300 USD per person). This would have dire consequences not only for Canadian’s and the Canadian business community but would also result in an increased cost of living across the United States. We have already come through an inflationary period on both sides of the border – we don’t need another one.

We applaud your efforts to advocate for Alberta’s energy sector with our trade partners to the south. As you know, Canada is the single largest foreign supplier of energy to the U.S., providing an average of more than 4.6 million BOE per day in total petroleum products through 2024 – more than 52 per cent of the U.S. import supply. The value of Canada’s low cost, reliable and safe energy to the United States cannot be understated, any tariffs applied to these products would inflate the cost living across the United States and could compromise continental energy security.

However, emphasis must also be placed on other sectors of our economy which would be seriously impacted by tariffs. Small businesses across the country would face severe economic conditions as a result of these tariffs. Small and medium sized businesses across Canada contributed 42 per cent of our exports by value in 2022, and in the same period 99.7 per cent of business in Canada were small and employed 64 per cent of the private labour workforce. Across Canadian small businesses, 79 per cent of their revenue from exports came from the United States. A 25 per cent tariff, applied universally, would seriously harm small businesses who are already struggling with uncertain economic conditions.

The agriculture industry across Canada is also notably trade exposed to the United States. Through 2023, Canada exported upwards of $99 billion worth of agriculture and food products globally, the United States represented 60 per cent of those exports by value. Furthermore, since the signing of NAFTA in 1989, our trade in agriculture and food products with the United States has grown roughly eight per cent per year. The continued success and growth of our agriculture industry relies heavily on free and advantageous trade with the United States. Were a Trump administration to levy his promised 25 per cent tariff it would seriously impact the viability of agriculture businesses across the country that rely on trade with our partners to the south.

Considering the legitimate and impending threat posed by the aggressive approach to international trade that President-Elect Trump is proposing, including a potential 25 per cent tariff on all exports from Canada, we ask that in your meetings with officials in Washington and across the U.S., you emphasize the value of a collaborative and free trade relationship with Albertan and Canadian businesses. The importance of our trade in energy products, agriculture and food products, forestry products and consumer goods cannot be understated. The impact of these tariffs would be severe on both sides of the border, small businesses would be disproportionately impacted as they often have lower margins on their products and lesser capacity to absorb price changes throughout their supply chains, and consumers across the continent would end up paying more.

To address these challenges, we would recommend that the Government of Alberta:

• Maintain the position that no sector of the Canadian economy should be used as a bargaining chip at the expense of our industries and the affordability for Canadians broadly. Instead, promote the importance the mutually beneficial Canada-U.S. trade relationship, and the need to work quickly and collaboratively to address trade irritants highlighted by the United States.
• Support the fiscal flexibility required to develop actionable, short term supports for businesses and workers negatively impacted by tariffs. Recognizing the potential decline in GDP, employment and wage growth that could result from the proposed tariffs, work with federal partners to develop an action plan for short term financial supports to ensure that Canadian businesses are insulated from severe harm. 
• Emphasize the importance of trade with Canada, regardless of sector, to stakeholders in the U.S. The strategic value of Canadian energy, agriculture, forestry and metallic products must be impressed upon our neighbours in the U.S., ensuring that trade partners understand the value of secure and reliable trade with Albertan and Canadian businesses. As you advocate for important carveouts for the energy sector, ensure that the value of other key sectors is included in your advocacy, noting the severe impact these tariffs will have across the economy.
• Promote the development of export capacity outside the United States. Targeted infrastructure development to enhance our economic corridors and enable exports to a diversity of markets will decrease our reliance on trade with the United States and improve the reliability and stability of our supply chains.
• Highlight Canada’s alignment with U.S. policies, particularly those related to energy development, environmental regulation and worker protections, outlining how Canada aligns with U.S. domestic policy while maintaining Canada’s own policy priorities. Respond to U.S. priorities – such as security and supply chain integrity – to support Canada’s trade narrative.
• Support the ‘Team Canada’ approach to international relations with the United States when not in direct contradiction with Alberta’s economic interests, ensuring collaboration with federal, provincial and territorial, and municipal governments is top of mind. Develop intergovernmental collaboration and strong communication with the U.S. federal government and state partners in key trading states to ensure Canadian businesses maintain their market access, and U.S. partners understand the value of Canada’s supply chains.

The impact of a 25 per cent tariff on all Canadian exports to the United States would be immediate and severe. We applaud your leadership on this important issue, and we would emphasize the need for all orders of government – across the country – to work diligently to address this serious threat. To protect Canadian businesses and workers and ensure that our economic prosperity is not further compromised, we must ensure that our trade relationship with the United States remains free and fair.

Sincerely,

Deborah Yedlin

President & CEO 

Calgary Chamber of Commerce 

ABOUT THE CALGARY CHAMBER OF COMMERCE

The Calgary Chamber of Commerce exists to help businesses reach their potential. As the convenor and catalyst for a vibrant, inclusive and prosperous business community, the Chamber works to build strength and resilience among its members and position Calgary as a magnet for talent, diversification and opportunity. As an independent, non-profit, non-partisan organization founded in 1891, we build on our history to serve and advocate for businesses of all sizes, in all sectors across the city.