Tuesday 26 January 2021

Careful what you wish for

There are plenty of Donald Trump supporters in Canada: even a quick glance at the readers' comments section on any article in the National Post makes that clear.  However, it's probably fair to say that a majority of Canadians were happy to see Joe Biden win the Presidential election. Having a ringside seat at the circus is fun for one night, but it gets a bit wearing after four years. Prime Minister Trudeau and his Deputy, Chrystia Freeland, must have been hoping for an easier ride after dealing with the mercurial Trump.

Less than a week into Biden's term, those hopes are already looking ragged. On his very first day in office, Biden signed an executive order rescinding the permit for construction of the Keystone XL oil pipeline. This rather peculiar project was designed to transport oil from the Alberta tar sands to refineries on the US Gulf Coast. The US does not actually need the oil: it would all be refined and exported. The very existence of the scheme is evidence of Alberta's growing desperation to get its product to tidewater.

The project is an environmental nightmare, despite its owners' promise to make the pipeline itself carbon neutral by 2030. Tar sands oil is intrinsically dirty and bringing a project of this scale into being would make it almost impossible to meet Canada's "green" targets. The Federal and Alberta governments have been all-in on the project from the start, but it triggered widespread protests by Indigenous groups in North Dakota, prompting the Obama administration to cancel it. Trump revived it by way of an executive order and work resumed, but now Biden, in an early gesture to the more progressive wing of his party, has nixed it again.

Keystone XL assuredly won't rise from the grave again, but Alberta Premier Jason Kenney isn't giving up. He is demanding that the Federal Government make the case for it with the Biden administration, which seems entirely pointless. He wants compensation from the US for the billions Alberta has already spent on it: good luck with that. And he has even gone so far as to suggest that Canada should retaliate against the US and risk starting a trade war if the project does not go ahead.  

You can relax on that score, Premier Kenney, because President Biden is way ahead of you on the trade war front. On Monday the President signed another in the endless stream of Executive Orders that have come across his desk since the Inauguration, this one aimed at strengthening Buy America provisions in government procurement. Protectionism is a big part of the Democratic Party's DNA, and this action is a gesture by Biden towards the more traditional wing of his party.

Canada is, of course, part of a North American free trade deal with the US and Mexico, and the Federal Government in Ottawa seems relaxed about the whole thing. Still, it is an added complication in the cross-border trading relationship and offers further evidence, as if any were needed, that agreements with the US government, however formal they may be, rarely survive the transition from one administration to another unscathed.

All in all the next few months look very challenging for Canada. On top of the challenges posed by the new administration, the country is facing the prospect of a very slow rollout of the COVID vaccines that are supposed to allow the economy to reopen. Canada produces none of these vaccines domestically. Trump signed an order keeping all US vaccine production for US citizens and there is near-zero likelihood that Biden will reverse that. Now the EU, where Pfizer's vaccine is manufactured (specifically, in Belgium) is also contemplating export curbs. 

Against this background there are bizarre suggestions that the Trudeau government is toying with the possibility of a spring election. To my non-political eye that seems almost like a death wish. One thing's for sure: if yours truly doesn't get a vaccine pretty damn quickly, that's one vote that definitely will not be going to Trudeau.  Actually I won't be voting for him anyway, but don't tell him that. 

No comments: