Saskatchewan faces ‘significant uncertainty’ as Trump retakes power

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The proposed annexation of Canada along with 25-per-cent tariffs are signs of the “massive amount of uncertainty” posed by Donald Trump’s return to the White House, according to a political scientist.

It’s not entirely clear whether the incoming U.S. president was serious — or what his motivations may have been — when he recently suggested that Canada could become the U.S.’s 51st state. Jim Farney, director and professor at the Johnson Shoyama Graduate School of Public Policy in Regina, said any concerns regarding annexation are likely unwarranted whereas tariffs pose a more realistic and tangible obstacle to Saskatchewan and Canada.

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Saskatchewan’s net exports to America in 2023 were worth $27 billion, representing 55 per cent of the province’s total export value.

“What (the tariff threat) does do is create a really massive amount of uncertainty in the trade relationship states, and that is bad for business investment,” said Farney. “It’s bad for big industrial projects coming into anywhere in Canada because you’re not sure on what terms you’ve got access to your largest market.”

By mid-morning Monday, the uncertainty was on full display as news broke prior to Trump’s inauguration that tariffs were not likely to come on Day 1. His administration signalled it would hold off on tariffs for now, opting instead to sign a memorandum that would study what it deemed unfair trade and currency practices by Canada, Mexico and China.

Last week, Saskatchewan Premier Scott Moe announced new border security measures to address concerns signalled by Trump.

“If our largest trading partner has identified the 49th parallel border security as a challenge, then that’s a conversation that we need to partake in,” said Moe at the time.

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In a written statement Monday, the provincial government said it will be part of an envoy to Washington in February, but not on inauguration day.

“There are no representatives from the Government of Saskatchewan attending,” it said. “If any MLAs are attending, it would be at their own expense and not in an official capacity.”

Moe offered congratulations to Trump and his vice-president, JD Vance, in an emailed statement Monday afternoon.

“Saskatchewan plays a critical role in providing food and energy security for the highly integrated North American economy,” Moe said. “We will continue to work alongside Canadians and Americans to ensure North American energy and food security is protected in a tariff free environment.”

Asked about Trump, Opposition Leader Carla Beck said Monday from the Saskatchewan Legislature that her party’s continued focus is on the tariff threat and the impact it could have on industry, agricultural producers and consumers.

Tariffs were also front and centre in an interview with Charles Smith, associate professor in the department of political science at the University of Saskatchewan’s St. Thomas More College. Smith said Trump’s threat was an “opening salvo” prior to trade talks, noting that he views tariffs as a means to raise U.S. revenue.

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“He’s ready to impose tariffs to help pay for some of his domestic tax agenda,” said Smith. “They want to use the tariff model to help raise funds to help fund their domestic spending or the domestic spending agenda, which includes a massive tax cut to the wealthy.”

During his inauguration speech on Monday, Trump did not signal that tariffs were immediately coming for Canada, though he did announce the creation of the “External Revenue Agency,” which would collect all tariffs, duties and revenues.

Speaking before Trump’s announcement, Farney said Saskatchewan is positioned to fare somewhat better than other provinces given that it’s the third-most diversified in terms of trade partners.

However, there would still be a significant financial hit should tariffs be imposed.

Smith sees the U.S. returning to a more “protectionist” America as Trump and his party control congress and the senate.

“It’s hard to predict what will happen in the next, you know, month, let alone year,” he said. “But I think it could create all kinds of economic and political turmoil.”

Retaliatory tariffs from Canada are possible on oil and gas, but Farney said America’s recent ramping up of production puts Canada on weaker footing.

“Fifteen or 20 years ago, the U.S. really needed our energy,” he said. “They’re now a net energy exporter.”

–with files from Nykole King and The Canadian Press

alsalloum@postmedia.com

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