Whatever may have happened to convince Carney to walk away from the best tariff deal that was offered to any country, the aftermath has stirred plenty of Canadian citizens into a hostile frenzy. One is reminded of Scrappy Doo, yipping and yapping and nipping at the heals of a much larger opponent in the delusion that this will accomplish something.

In the meantime, 33% of Canada's GDP relies on exports and 78% of those exports rely on US markets. Furthermore, there are no practical alternatives. Without a near-term deal with the US, Canada faces severe recession, or worse. Canadian officials and the public have not yet come to accept this reality. They have been busy conjuring ways to "hurt" the US, but these tactics are based on an ignorance of the bigger picture.

For example, Canadian officials recommended shutting off electric supplies to the US eastern seaboard. However, Canada provides less than 1% of all US electricity. Meaning, they have no leverage.

They also called for a shutdown of oil exports to the US, but the US is a net exporter of oil and the largest oil producer in the world. Going without Canadian oil would cause prices to rise, but it would not do the kind of damage they are hoping for. Trump's latest landmark deal with Venezuela will mitigate any potential supply disruptions from Canada.

Plus, 70% of Canadian oil traveling from Alberta to Ontario uses pipelines that cross into US territory (the Enbridge Mainline). It would be a disaster for them to escalate.

This brings us to the newest ingenious idea from Canadian leftists, which is to shut down US access to the St. Lawrence Seaway from the Great Lakes to the Atlantic Ocean. Or, increase tolls to crippling levels at the various Canadian controlled locks.

There is a problem with this plan, though. First, Canada already charges tolls at these locks and has done so for decades.

On the other hand, the US also controls at least two locks on the same waterway which Canadian ships use regularly. The US government waived collection of tolls on the seaway back in 1986. Meaning Canada is the only country that collects tolls, but this could be easily changed. If Canada tried to charge higher tolls or block access, the US could to do the same, and the US has the actual military resources to enforce such measures.

By extension, if Canada tried to initiate a wider resource war against the US, their oil pipelines going through the US could be cut off. Once again, Canada simply has no economic leverage. The sooner they accept this, the sooner they can avoid a painful economic decline.

Posted by: Timothy Birdnow at 01:18 PM | No Comments | Add Comment
Post contains 625 words, total size 5 kb.