Canadian oil industry leaders are trying to get a better idea what the impact of a new import tax in the United States would be on Canada's energy sector if the Trump administration embraces it.
The tax would essentially make Canadian oil and gas more expensive for U.S. refineries to buy, and there are serious concerns about potential ramifications including whether it could lead to investment dollars shifting stateside.
The policy, also called a border adjustment tax, is being pitched to president-elect Donald Trump by Republicans in the House of Representatives — although it's not clear whether or not it will be enacted when he takes power.
"We've had a ton of questions in the last couple of weeks about the potential for an import tax from the U.S.," said Martin King, a commodities analyst with GMP FirstEnergy, during a presentation to oil and gas industry members on Tuesday morning.
The Republicans have worked on the protectionist policy for some time to give incentive to buy U.S. products and resources. The policy is complex, but essentially it would reduce or eliminate the cost U.S. companies can deduct from revenues for importing goods. The legislation would raise the price of imported goods, which presumably applies to all products, materials, and resources, such as smartphones and natural gas.
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