Alberta businesses bracing for ‘chaotic, unprecedented’ tariffs

Mike Holden on Alberta Primetime, March 6, 2025

Mike Holden with the Business Council of Alberta joins Alberta Primetime host Michael Higgins to discuss the impact of tariff uncertainty on Alberta businesses.

This interview has been edited for clarity and length.

Michael Higgins: Premier Danielle Smith announced a number of Alberta measures in response to the tariffs.

It includes the AGLC halting the purchase of American liquor and VLTs and a Buy American marking campaign.

How is the business community feeling about the response of both the federal government and our province?

Mike Holden: Before you even get to what their approach is, I think the main sentiment coming out of the business community is just uncertainty.

I mean, you’re looking at a chaotic, unprecedented series of actions; and it seems like every two hours there’s some new information, or conflicting information, coming out of the U.S.

For the business community that always talks about how it values certainty, what we’re seeing here is so far an extreme opposite version of what they hope for - that it’s a huge challenge in terms of the actions that they’re taking.

I think that up till this point, the actions that have been taken have been fairly positive.

On the federal side, we see this $30 billion worth of initial retaliatory tariffs, and those have been carefully targeted on things that either Canadians produce already, that we have easy domestic substitutes for, or things that we can easily buy from other countries.

That’s a good step – and provincially, it’s the same thing.

The province has done a really good job of targeting areas where Alberta businesses are not harmed and could potentially benefit in a way that slightly offsets the potential damage that a prolonged tariff war could have.

Higgins: Our premier on Wednesday again pushed back against things like an export tax on Canadian oil and gas or curtailing shipment of energy south of the border. Where do you weigh in on that?

Holden: Completely agree with that. I think the big challenge with the tariff war or escalating tariffs like we’re seeing right now, is that nobody wins.

American importers are going to be paying this tax, but that means the prices in the U.S. are going to go up. That’s going to harm American consumers, and it’s going to harm the Canadian businesses and the Alberta businesses that are exporting to those countries.

Nobody wins, and a set of export curtailment, export tax, or even broad based retaliatory tariffs, those are going to hurt Canadians and Americans.

Nobody wins here, and I think that’s the big challenge - is to try to find a way to respond that’s forceful and decisive, but that doesn’t come back and hit us in the other direction again.

Higgins: In terms of looking for a win – your business council is partnering with similar organizations across the Western provinces to form a coalition of sorts.

What do you aim to accomplish in uniting as a group?

Holden: There are a couple of things we’re trying to accomplish. The main one is to try to magnify the voice of the Western provinces in Canada.

The work we’re doing to start this project is really focusing on our valuable natural resource base. Whether it’s oil and gas, agriculture, forestry, critical minerals and mining or others, we have a wealth of resources here.

We think there is a huge opportunity for federal policy to help enable the extraction, enable the value-added production, enable more research and development in these areas, and get those goods to market.

Those will be important policy ideas and policy priorities, regardless of what was going on in the United States – but it adds extra motivation and extra urgency to us doing this work.

Higgins: From a business community standpoint, what’s the biggest hurdle that will need to be overcome in breaking down interprovincial trade barriers?

Who needs to carry the weight of overcoming that hurdle?

Holden: The issue with interprovincial trade barriers is there are a collection of technical, administrative, regulatory differences across all the provinces. That’s what most of them are.

Alcohol sales is a big one, but that’s one of the few areas where there are actual restrictions on sales.

It really is just harmonizing mutual recognition of standards, making sure that workers who are trained in one province are able to work in a different province.

It’s really about the provinces and the federal government all getting together and all agreeing to make some progress on this.

This has been an issue in Canada for decades and decades, and when it first started rising up as an emerging issue - or re-emerging as an issue in the context of what’s going on in the United States - I was actually a little bit skeptical that we wouldn’t be seeing much progress.

But I’m pleasantly surprised by how much progress has been made so far.

Higgins: If we could bring it back to the tariffs, and the lingering turmoil, lingering uncertainty, where does that leave the climate for future business investment in Alberta?

Holden: That’s the big challenge, and I think that that’s why it’s so important to be able to find a way out of this problem.

The longer it goes on, the more uncertainty there is. The biggest risk is that when companies are making their next investment decision - where are they going to put that new plant or that new facility?

Are they going to put it in Canada, where they might be subject to ongoing tariffs or ongoing uncertainty if they are large exporters to the United States? Or they’re just going to put that plant in the United States?

That’s always a concern that we need to have. One of the things we can do about it is refocusing federal policy and making sure that we have the most competitive domestic economy we can.

The interprovincial trade barriers are an important step in here.

We also need to make sure our tax policy, our regulatory policy, our major project approvals policy, make us as competitive a jurisdiction as we could possibly be in order to keep that investment here.

Higgins: It’s hard to escape the talk of inflation and likelihood of job losses.

Should the tariffs remain in place for any length of time, how prepared is Alberta’s business community for a bumpy road ahead?

Holden: They’re making plans as best they can. It really depends on which industries we’re talking about here, in terms of who’s going to feel the pinch the hardest.

Our calculations and our analysis suggests food processing, petrochemicals, some other chemical related products - those are the ones that are going to be hit the hardest.

They’re making contingency plans right now. In some cases, they’ve been selling additional product in advance to the United States, building up their inventory, their stock.

It’s just such uncertain times that they’re just trying to try to plan their best.