Key Messages
Importance of U.S.-Canada trade for Alberta
➤ The United States has long been Alberta's most important bilateral trade partner (source).
➤ The US is by far the largest customer for Alberta's exports and the source of two thirds of all foreign investment in the province (source).
➤ In 2023, Alberta exported over $156 billion to the U.S. and is over 90% of our net exports by value.
➤ Canada is the single largest supplier of energy to the U.S. about $190 billion Canadian of bilateral trade each year.
➤ Alberta provides 56% of U.S. oil imports and is a key energy partner in North America’s economic and energy security.
➤ Canada is the largest supplier of foreign oil to the U.S., shipping more than four million barrels per day to the country (source).
Alberta’s Trade Relationship with the U.S. is a Two-Way Street
➤ Tariffs hurt American businesses and consumers too. Many U.S. industries depend on Alberta’s energy, agriculture, and manufacturing supply chains.
➤ Cross-border trade supports millions of jobs on both sides—restrictions increase costs and business pressure.
A Made-in-Canada Solution: Strengthening Interprovincial Trade
➤ A recent study suggests that removing barriers to interprovincial trade could boost Canada’s GDP by up to $200 billion annually—and could lower prices by 15% (source).
➤ A unified domestic economy mitigates global trade risks and strengthens supply chains.
Impacts on Alberta’s economy
Short-Term Effects
Higher costs:
➤ Businesses face rising production expenses, leading to inflation and reduced consumer spending.
Job market shifts:
➤ While tariffs may protect some jobs, industries relying on exports or imported materials risk job losses.
Supply chain disruptions:
➤ Companies may shift production or source from non-tariffed countries, increasing costs.
Long-Term Effects
Potential Retaliation & Trade Wars:
➤ Countries often respond to tariffs by imposing counter-tariffs, leading to decreased global trade and economic stagnation.
➤ A prolonged trade war can slow GDP growth and reduce investor confidence.
Impact on Currency & Investment:
➤ If a country is heavily dependent on exports (which Canada is), tariffs on its goods can lead to reduced demand, currency depreciation, and capital outflows.
➤ Businesses facing uncertainty about future trade policies may delay investment, slowing economic growth.
On the perception of a U.S. trade deficit with Canada
➤ The U.S. had a US$64.3 billion trade deficit with Canada in 2023, entirely due to energy products. Excluding energy, the U.S. actually had a US$28.6 billion trade surplus.
➤ The U.S. also maintained a US$31.7 billion services trade surplus with Canada and a US$33 billion surplus in manufactured goods, making Canada the only top trading partner where the U.S. had a manufacturing trade surplus.
➤ Trade deficits are not subsidies but reflect deep and mutually beneficial economic integration.
➤ The U.S. chooses to trade with Canada, benefiting from inputs that support U.S. industry—with 70% of imports from Canada used in further manufacturing.
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