Well, that didn’t take long at all. When Canadians went to the polls and kicked out the nasty conservatives in favor of an all liberal, all the time government, we were pretty sure there were some big changes coming. Among them were, no doubt, plans to fight carbon and save the planet, which is as hot of a topic among Canadian liberals as it is in the lower 48. That expectation was met quite rapidly with Justin Trudeau’s announcement that he was getting ready to ban… (wait for it) … oil tankers off the west coast. (Yahoo News)
Campaign promises often fall by the wayside once politicians make it to office, but not for Canadian Prime Minister Justin Trudeau. Less than a month after his election, Canada’s head of state has put his pledge to ban oil tanker traffic into motion.
In a letter published Friday, Trudeau asked his Minister of Transportation to “formalize a moratorium on crude oil tanker traffic on British Columbia’s North Coast,” the Calgary Herald reports.
Such a ban could potentially shut down the controversial Northern Gateway pipeline, in which crude oil from Alberta would be piped up to north to British Columbia and then shipped overseas. A coalition of environmental groups and aboriginal advocates applauded Trudeau’s decision.
Regular readers don’t need an extensive recap of the the Northern Gateway situation since we have covered it here exhaustively. Under the previous administration, Canada had made it clear that if we couldn’t get the Keystone XL pipeline built they would ship their oil to the British Columbia coast where tankers from China would gladly load up every drop of crude they could produce. If Trudeau actually pulls this off and bans all oil tankers from the coastal region, that would effectively kill off the purpose of building the Northern Gateway and shut down any chance of expanding his nation’s energy exports. As the balance of production and refinery capacity in the United States shifts, it will degrade Canada’s export prospects significantly.
I hope the Canadians knew what they were getting themselves into when they elected this guy. As they come to grips with this announcement their voters might want to remember their current balance of trade situation which is quite favorable. (Emphasis added)
Canada is the 12th largest export economy in the world and the 33rd most complex economy according to the Economic Complexity Index (ECI). In 2013, Canada exported $438B and imported $437B, resulting in a positive trade balance of $1.69B. In 2013 the GDP of Canada was $1.83T and its GDP per capita was $52k.
The top exports of Canada are Crude Petroleum ($80.5B), Cars ($45.9B), Refined Petroleum ($18.6B), Petroleum Gas ($12.6B) and Vehicle Parts ($10.7B), using the 1992 revision of the HS (Harmonized System) classification.
Take a look at those numbers, Canada. You have, by a small margin, a positive trade balance which is good news for any nation. But of your $438B in exports, $111.7B of it was petroleum based. That’s one quarter of your entire economy on the export front. If you cut your throats on petroleum exports you are going to be staring a massive trade deficit square in the eye. I can assure you, the good times sitting around Tim Horton’s won’t be nearly as sunny with that big of a gaping hole shot through your economy.
Good luck with your new liberal government, Canada. You seem to be off to a roaring start.