It’s Canada That ‘Subsidizes’ US: Harper Says Buying Discounted Oil Is Reason for US Trade Deficits

 Former Canadian Prime Minister Stephen Harper is challenging Donald Trump’s statements that the United States is subsidizing Canada, a claim the president-elect has cited when threatening to slap 25 percent tariffs on imports from Canada.

The “modest” trade deficit between the two countries can primarily be attributed to America’s purchase of oil and gas from Western Canada, Harper said during a recent interview with a U.S. podcast. He noted that Canadian gas and oil is provided to the United States at a “discount” compared to world markets.

“It’s actually Canada that subsidizes the United States in this regard,” Harper said during a Jan. 13 interview on the Standpoint podcast with Gabe Groisman.

“Maybe Canadians, if Mr. Trump feels this way, should be looking at selling their oil and gas to other people. We certainly have always wanted to do some of that. Maybe now’s the time to do it.”

Harper also challenged claims made by Trump about the Canadian dairy industry. Canada sells “almost none” to the United States, he said.

While some of  Trump’s comments can likely be attributed to his desire to modify trade agreements with Canada—something Harper said he “understood”—he added that he is “shocked” by the president-elect’s ongoing comments about Canada.

Trump for weeks has said Canada should become the “51st” U.S. state and, more recently, said he is considering using “economic force” to merge the two countries.

Harper characterized Trump’s remarks as “out of sync” with the historical camaraderie shared between the two nations.

“I have a real problem with some of the things Donald Trump is saying,” Harper said. “If you want a better deal or whatever, fine, but it doesn’t sound like the pronouncements of someone who’s a friend, a partner, and an ally.”

He described Canada not just as a good ally and trading partner for the United States, but as a country with “an unparalleled comparative advantage in its resource base.”

“We have energy, critical minerals, resources of all kinds,” Harper said. “We have probably the largest overall resource base of any country in the world, even greater than Russia, in terms of its diversity.”

Canadians ‘Proud’ of Country

Harper described himself as the “most pro-American” prime minister in the country’s history, but challenged Trump’s recent remarks that many Canadians want to join the United States.

“We are a friend and an ally, but we are an independent, sovereign nation, and where Mr. Trump is wrong, is there’s almost nobody in Canada who wants to change that,” Harper said. “We have our own culture, our own history. We’re very proud of it. Very proud of our relationship with the United States, but we are Canadian, not American.”

Harper also took issue with Trump’s assertions that the U.S. is subsidizing Canadian defence.

“I don’t know what he’s talking about,” Harper said. “We have a shared defence of North America. The United States does that because it’s in the vital interest of the United States.”

Harper also disagreed with Trump’s comments about Canada’s border being a security and safety issue for the U.S. and challenged his claims that there is a substantial illegal migrant flow from Canada to the United States. Illegal drugs, firearms, and criminal activity in general tend to flow north, not south, he said.

“A lot more flows into Canada from the United States than flows out of it,” Harper said.

Trump-Trudeau Rivalry

Harper also dismissed suggestions by the podcast host that Trump influenced Prime Minister Justin Trudeau’s resignation. Trudeau announced Jan. 6 he would step down as soon as the Liberal Party chooses a new leader.

Harper noted that Canadians and Trudeau’s own party were instrumental in the outcome, not Trump.

“Whether or not we have Mr. Trudeau as our prime minister is our choice as Canadians,” Harper said “We don’t tell you who to elect as president of the United States. And so as much as I’m glad to see Mr. Trudeau leaving, this is not Mr. Trump’s decision. It’s the decision of Canadians.”

Harper acknowledged the “animosity” between Trudeau and Trump was detrimental to the bilateral relationship between the countries and laid much of the blame for the current situation at Trudeau’s door.

“Mr. Trudeau, his conduct with Mr. Trump on numerous occasions when they were in office together, was not, was not professional, and I can understand why there’s some animosity,” he said, referring to Trump’s first term in office.

The animosity between the two leaders is not reflected in either of their countries, however, Harper noted.

“I don’t think the American people are hostile to Canada or want to see Canada conquered, or, as Mr. Trump said, forced economically to join the United States,” he said. “I just don’t see that as an agenda.”

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