P.E.I. Premier Wade MacLauchlan says he expects the continuing U.S.-Canada trade war to be the dominant issue at today’s premiers conference in New Brunswick.
All Canadian premiers will attend their yearly meeting today through Friday in Saint Andrews. MacLauchlan said he believes the premiers will continue to advocate for the importance of cross-border trade in the U.S. but acknowledged the tension between the two countries.
“I would call it a sensitive, maybe even perilous time as far as the Canada-U.S. trading relationship,” MacLauchlan said.
On Monday, the Trump administration filed a World Trade Organization challenge of retaliatory trade tariffs imposed on the U.S. by several countries, including Canada.
MacLauchlan said that, prior to the imposition of tariffs on Canadian steel in late May, the premiers had worked to establish relationships with state governors. He said he hoped the combination of retaliatory tariffs from the federal government, and the strong working relationships at the state-provincial level, would help overcome the trade dispute.
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MacLauchlan accompanied six other premiers in a mission to Washington in June 2017.
“At the time we thought it was useful,” MacLauchlan said.
P.E.I.’s exports to the U.S. were worth more than $1 billion in 2017.
MacLauchlan said he also expected equalization payments and carbon pricing to feature prominently.
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Saskatchewan Premier Scott Moe has suggested the federal equalization formula be changed, with half the equalization pool to be distributed on a per-capita basis amongst all the provinces.
MacLauchlan said he has no plans to talk in any depth about changes to the equalization formula, which he said is dispensed from a pool of tax dollars collected by the federal government.
"The program has been in place since the Diefenbaker and Pearson years," MacLauchlan said.
The federal government has already renewed the current formula for equalization payments through to 2024.
The issue of carbon pricing is expected to be one of the more contentious points of discussion. Ontario Premier Doug Ford and Moe have both said they plan to fight the Trudeau government’s plan to impose a carbon tax on the provinces.
P.E.I.’s government has submitted a climate change plan to the federal government that does not include a carbon tax or cap-and-trade system. These are the two options the federal government has granted the provinces, in order to set a price on carbon emissions.
MacLauchlan said he favoured lowering the price of renewables rather than taxation.
“We are not avoiding the role of relative price in persuading people to reduce our carbon emissions. That's where we differ from the provinces that are out-and-out fighting this,” MacLauchlan said.
The federal government has said it will set carbon pricing rules in January 2019 for provinces that have not adopted their own carbon taxation regimes.
