Trudeau non-committal on using tariffs or joint action with U.S. to help oilpatch
Premier Jason Kenney floated options on Friday as oil prices fell to new lows
As the price of oil crashed to record levels, the federal help flagged on Wednesday to arrive in "hours, possibly days" by Finance Minister Bill Morneau took on new importance in Canada's energy sector.
More information on the specifics of that federal help have yet to be revealed.
Speaking on Friday after Western Canadian Select (WCS) fell to a record low of $4.58 per barrel, Alberta Premier Jason Kenney called for an aggressive approach from governments across North America.
The premier said he'd like to see tariffs introduced on foreign oil exports or a coordinated response to the price war between Russia and Saudi Arabia.
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Asked whether he would support such a response on Saturday, Prime Minister Justin Trudeau didn't offer clues into what the imminent federal help might resemble.
"This is a moment we need to focus on getting through COVID-19 as best as we possibly can. I think there will be a lot of reflections on how various countries behaved in this particular moment," Trudeau said during his daily address to Canadians.
On Friday, Kenney called for an investigation into "predatory dumping" of crude by the Organization of the Petroleum Exporting Countries (OPEC) into North America.
"Obviously, we are very concerned with OPEC's decisions that are putting at risk the livelihoods of people around the world, particularly Canadians who work in the oil and gas sector," Trudeau said. "We are focused on helping those Canadians, helping people who are hardest hit economically by COVID-19."
Trudeau offered no further details on what form federal help might take in the coming days.
On Wednesday, Morneau said Ottawa had been in "hourly" contact with provincial governments to discuss how best to provide help to the oil and gas sector.
'There's not an easy fix here'
Economist Trevor Tombe said the unfolding crisis was "unavoidably difficult" with no simple solution in sight.
"There's not an easy fix here. We can't slap a tariff on oil imports and think that's going to make a material difference to producers in Alberta," he said.
Such a tariff would be borne by Canadians, Tombe said, as oil producers abroad have the option of choosing other markets.
"Those producers are not going to bear the burden of the tax. It's going to be shifted onto consumers," Tombe said. "So oil imports into Canada is an example of a good where we have a very, very elastic supply … [it will] be passed through to consumers in Canada, the refineries and fuel users."
Curtailment would similarly not be a viable option when oil prices are so low, Tombe said.
He said he expected government to pursue policies that would provide "bridge funding" to weather the significant negative shock.
"[That will] ensure that companies that are otherwise valuable and profitable endeavours do not go bankrupt during this time where we tackle the COVID-19 crisis," he said. "That means only short-term support, in the form of maybe interest-free loans and maybe even direct cash transfers from the government.
"We're likely to see a combination of those two things."