Nelson: Danielle Smith faces Canada's wrath over Trump tariff fight

It's coming for Alberta, as surely as those cold prairie winds arrive in late October. And when it does, will Premier Danielle Smith stay firm in backing a united Canada?

The seeds are already being sowed. Across Canada — even here in Alberta where people should know better — there are calls for placing levies on the country's energy exports to the United States.

This is seen as the Achilles heel of the endlessly belligerent regime of U.S. President Donald Trump, one that has pushed this country to break off trade talks and promise a tit for tat response to any arbitrary tariffs imposed by our neighbour.

The area of most concern — and one Trump seems hell bent on exploiting, even if it blows up in his face — is Ontario's auto industry. So much so that Prime Minister Mark Carney is accusing the president of trying to deliberately destroy what has been a backbone of southern Ontario's economy for generations.

Meanwhile, Ontario Premier Doug Ford has decided the best way to fight back against Trump's threats is matching insult with insult, though trying to out-do Trump in crassness seems a fool's errand, even if it results in a short-term boost to Ford's lousy approval ratings.

And Ford is first out of the gate to push for such exit taxes to be placed on energy. He will not be the last. Expect a parade of premiers to follow suit — after all, it isn't their industry or workers that are at stake, and any cash collected via levies would be shared around the entire country. What's not to like?

Such exit taxes might well prove lucrative, given that Alberta contributes about 60 per cent of U.S. oil imports, along with almost all of its natural gas.

Certainly, such a strategy would cause a major problem south of the border.

Sure, the U.S. produces a lot of oil itself but most of that is the light variety, courtesy of its huge fracking industry. What it needs is heavier oil that can be turned into much-needed diesel at those Midwest refineries. And Alberta has that stuff in abundance — almost four million barrels flow stateside every day.

So, with mid-term elections only a few months away and Trump's approval rating in a historic swoon, watching diesel prices — used in all manner of transportation and heavy machinery — go parabolic would be a massive political and economic body blow to the administration.

Smith understands the leverage this gives Alberta, but also knows upsetting the relationship between our province and its traditional biggest customer is a massive gamble. If it backfires, it could devastate Alberta for decades to come.

That's why instead of crude insults, Smith is showing a more nuanced and diplomatic approach before the wheels fall off. She is urging a return to the bargaining table.

So far, Carney agrees that using energy as a retaliatory weapon would be a mistake.

But will he sing from that same song sheet once the other premiers start banging that Team Canada drum? (Remind me: How many seats does Alberta have in the House of Commons?)

The pressure on Smith will be enormous, especially if Carney eventually joins that chorus.

And when push comes to shove, the federal government has the power to impose such exit taxes unilaterally. Yes, the oil belongs to Alberta, but cross-border trade is Ottawa's responsibility.

Should that happen, will Smith still sing the praises of a united Canada? Or will she publicly announce this is the final stab in the back and that separation is the only alternative?

If so, the Oct. 19 referendum will become too close to call.

Chris Nelson is a weekly columnist.