Economist says Alberta’s oil and gas sector at risk in tariff war

The trade war is causing job losses in the steel and aluminum industries, with a potential impact of over a million jobs if the 25% tariff is implemented.

The Canadian and American governments continue to lob tariffs and levies back and forth as the trade war escalates, and jobs are on the line. DT Cochran, the Senior Economist at Canadian Labour Congress joined CTV Morning Live to discuss what this all could lead to.

This transcript has been edited for length and clarity.

Kent Morrison: Where are jobs most in jeopardy at this point?

DT Cochrane: Obviously the steel and aluminum industries, where the tariffs have gone into place. They’re already seeing shutdowns and layoffs. The broader threat, the threatened 25 per cent tariff across the board on all Canadian goods, that really threatens almost every Canadian because the direct jobs in exporting industries, those are a threat. But then all of the businesses that provide goods and services to those industries, and the workers in those industries, spend their money out into the economy. The potential impact is very uncertain, but we’re talking north of a million jobs if the worst case scenario comes to pass.

Kent: What about here in Alberta? Where are the pressure points for our province?

DT: Oil and gas is important for the province. It’s a big part of the exports to the U.S. and a big part of Alberta’s economy. But, this moves beyond just the exporting industries. There are hundreds of thousands of jobs in Alberta alone that are exposed to the U.S. export market because of all of these linkages.

Kent: Ontario’s premier is threatening to cut off supply. Alberta’s premier is saying that’s not going to happen with energy. What do you think the best strategy is for the labour market?

DT: The best strategy for every part of this is government investment in economic transformation. We should never have become this vulnerable to this kind of trade war. We allowed the U.S. to become the dominant customer for our exports. That shouldn’t have happened. We need to diversify our economy, we need to diversify our trading partners, and we can’t expect the private sector to lead the way, given the uncertainty that all of this is causing. There’s only one entity that can make the investments at the pace and scale that’s needed, and that’s the federal government. We need to be thinking at the level of World War II, maybe not quite that extreme, but that sort of pace and scale of government directed investment in infrastructure, transportation, north, east, west, to reconnect this country and get us trading with each other, rather than being so dependent on the U.S.

Kent: It’s all very uncertain at this point. Is that uncertainty just as bad as the tariffs themselves?

DT: Absolutely. Uncertainty is an investment killer. We’re not going to get new jobs being created for all of the young people who are just going to keep graduating and looking for work. They’re already facing a very weak labour market. Unemployment has been rising in recent months. If we’re not going to get a job creating investment out of the private sector, it has to come from somewhere else, and that investment is not going to happen with the uncertainty being created just by the threats alone. We need the only actor who can act at the pace and scale that’s needed, that can also provide certainty to business. If business knows that the government is going to be investing in big infrastructure projects, they’ll be lining up to provide the goods and services that they make available. That is a source of income, and they can make investments in increasing productive capacity. This can be a win-win-win all around, but it’s going to require action that we haven’t seen in decades by the federal government.