Trump vs. Biden — Why Canadians should be closely watching
By: Simon Hungate
Tags: Economy, Trump, Biden, Election 2020, Oil And Gas Industry

Source: WBUR

Democrats are calling it the most important election in a generation. Republicans are touting the job President Trump has done in a viable push for re-election. Only 20% of Canadians have confidence in Trump to even do the right thing on the global stage. But how would a Biden win compare to a Trump re-election for Canada’s economy?

Oil and Energy

Trump Re-election

Throughout his presidency, Trump has reduced regulation on drilling and pipelines, and has promised to continue that trend in a second term. He would like to see pipeline and oil transportation infrastructure develop across the board, even proposing a multi-purpose rail project to take Canadian oil to Alaska.

Most importantly for Canada is his promise to build the Keystone XL Pipeline, which would carry 1/5 of Canada’s oil exports to the US. Albertan oil prices have previously crashed because of an inability to deliver adequate supply to foreign markets (due of a lack of pipelines). Should Keystone XL go ahead, it would provide a major boost to the Albertan oil sands, as they would be able to get more oil to the US at a lower cost. It is noteworthy that the pipeline has only been approved along 100 kilometers of Canadian land, with the US portion being contested by state governments . Even if everything moved ahead as rapidly as possible, it would take two years for the project to be completed. With oil demand plateauing, and the oils sands already in trouble, it could very well be too late.

Biden Election

The Biden policy is simple. He plans to revoke permits for Keystone XL, which would terminate the project. This would have severe adverse impacts on the oil sands, and thus on Canada’s economy. But another one of Biden policies should grab Canadians’ attentions: the promise to hold countries in the Paris Climate Agreement accountable in meeting the goals specified (they will not lower there CO2 Emissions by 30% by 2030). Canada (despite what we like to think) is on track to fall well short of its commitments, potentially resulting in US tariffs (whether this will actually happen is debatable — the tariffs would need to be approved by the US Senate).

Trade

Trump Re-election

Trade under Trump has undoubtedly been tumultuous. Robert Lighthizer, the US trade representative under Trump, brings a protectionist attitude to all trade negotiations. The World Trade Organization’s (WTO) appeals body (the body responsible for handling appeals of WTO decisions) has already been paralyzed under the Trump administration, as they have been blocking the appointment of new judges. When Canada won a case at the WTO relating to softwood lumber duties, the US appealed the decision to the appeals court. The court cannot meet until new judges are appointed (which may never happen). In fact, Lighthizer has indicated he would support the permanent destruction of the Appeals court of the WTO.

These trends would likely continue in a second term. Tariffs on Canadian aluminum would come back onto the forefront. Sweeping changes to the WTO could be in store. New trade agreements would remain on the back-burner. The US would push for reduced tariffs in developing countries — a policy not without merits, as the US has some of the lowest rates of tariffs in the world. But on the whole, another Trump term would bring more uncertainty for Canada-US trade.

Biden Election

If elected, Biden would bring more stability. He believes in globalism and trade, while recognizing they come with their own shortcomings. Notably for Canada, he has promised to drop “national-security” tariffs against allies’ steel and aluminum. Biden would consider reentering the Trans-Pacific Partnership, though he has not made a firm commitment and it would not be a priority.

Although those things will benefit Canada, Biden will maintain some of the “America First” attitude that Trump brought to the Whitehouse. Softwood lumber will continue to be an issue, and Biden is poised to demand WTO reforms before appointing new appeals judges. He also plans to launch a 400 billion dollar “Buy American” program, incentivizing American made goods and attempting to keep manufacturing jobs in America.

Overall…

On the whole, both Trump and Biden bring some beneficial and some harmful policies for Canadians. Trump’s approval of Keystone XL could provide a much needed boost to the Albertan Oil-Sands, though the instability of his trade policies hurts trade more in general. Biden will cancel Keystone XL, but will bring more stability and will likely push for additional trade between Canada and the US. Depending on your perspective, there is a lot to look out for on November 3rd (or whenever the election may be called).

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