Trudeau’s conservative rival makes energy pitch to Trump

(Bloomberg) — Since winning the U.S. election, Donald Trump has taunted Canadian Prime Minister Justin Trudeau by naming him governor of a 51st U.S. state, threatening 25% tariffs and saying the U.S. is moving away from its northern Neighbors would be cheated by a trade deficit.

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Pierre Poilievre – the Conservative leader who is the leading candidate to defeat Trudeau’s party in the next election – says he can increase Canada’s exports to the US and still make a “great deal” with Trump.

Poilievre outlined an elevator pitch for the U.S. president-elect during an interview with right-wing Canadian influencer Jordan Peterson published online Thursday. If elected, Poilievre plans to speed up approvals for the construction of oil refineries, liquefied natural gas plants, nuclear power plants and hydroelectric plants. Canada is positioned to expand its electricity surplus with the U.S. to help power the data centers essential to the booming artificial intelligence sector, he added.

“If you look at President Trump’s history, he negotiates very aggressively and likes to win, but in the end he doesn’t seem to have a problem if his opponent wins too,” Poilievre said. “And that’s why I think we can get a great deal that makes both countries safer, richer and stronger.”

But Trump should also be aware that Canada currently sells its oil and gas to the U.S. at “huge discounts,” Poilievre told Peterson.

“Yes, it’s a rip-off – Canada is deceiving itself,” said the Conservative politician.

The U.S. goods trade deficit with Canada was $50.5 billion in the first 10 months of the year. It would be larger, but Canadian crude sells cheaply to U.S. refineries, particularly in the Midwest.

The discount exists because Canada has few alternatives. There is only one oil export pipeline leading to a seaport in British Columbia, and the country is just developing a liquefied natural gas industry with the capacity to transport large quantities of gas to Asia. So most of the fuel goes south.

“That’s the real story – it’s the pathetic story – of our trade surplus, that we’re actually stupidly giving away our resources,” Poilievre said. “It’s not the Americans’ fault, it’s our fault, we’re stupid. And we will stop being stupid when I am prime minister.”

Poilievre argued that Trump has reason to be angry about U.S. deficits with China and Mexico — “from a mercantilist perspective” — because they destroy American jobs. But the trade gap with Canada is different, the Conservative leader said, because it is caused by the sale of raw materials that Canada owns and that the U.S. needs, and actually supports American jobs where they are processed.

“The last thing he should be doing is preventing undervalued Canadian energy from entering his market,” he continued, appealing to Trump. “In fact, I would encourage him to approve the Keystone pipeline,” he added, referring to a long-standing Keystone XL project that aims to move about 800,000 barrels a day from Alberta’s oil sands to southeastern Nebraska , where this would also be the case connection to existing pipelines.

President Joe Biden revoked a key permit for this project after taking office in 2021, effectively killing it. Trump supports Keystone XL, but there is no sign yet that South Bow Corp., owner of the Keystone system, wants to revive it.

Lost jobs

If Trump were to immediately stop Canada’s trade surplus with the U.S., American refinery workers would lose their jobs and consumers would pay higher prices, Poilievre said. He argued that Canada should instead increase extraction of resources such as critical minerals so that both countries can become richer while weaning themselves off supplies from unfriendly states like China.

Poilievre added that he has held discussions with the Conservative leaders of the hydrocarbon-rich provinces of Alberta and Saskatchewan and asked them to be willing to expedite approvals for resource projects.

Poilievre said he would address U.S. concerns about border trade and military spending, adding that a Conservative government would invest the planned profits from its energy export strategy into Arctic security. Trump has long complained that the U.S. is being disadvantaged by its allies, and Canada currently falls far short of the North Atlantic Treaty Organization’s goal of spending 2% of gross domestic product on defense.

“I can fund more robust military and continental defense by having more free trade with the greatest economy the world has ever seen – and we can both win,” he said.

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