Trig crew at work. (Submitted Photo/Jody Lehman)

By Julia Lovett-Squires

Oil and Gas Tariffs

Oil and gas experts weigh in on Trump tariffs

Jan 22, 2025 | 7:00 AM

Corey Chmelnyk is of two minds about President Donald Trump’s threat for a 25 per cent tariff to Canada.

“I honestly wouldn’t say there’s panic yet because I think there’s still the potential that we don’t see the tariffs,” said the operations manager and part owner Meridian Energy Services.

“Hopefully the tariffs are just a posturing and a negotiating tactic by Trump.”

Chmelnyk explained that there is some belief the sector could be exempt or that the tariffs will be introduced gradually. He said that with the two countries’ long-standing relationship and having a reputation as the closest of allies, it’s hard to say what will happen.

“If there’s a 25 per cent tariff on Canadian crude, we could see gas prices at the pump going up like 30 cents,” he said.

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In mid-November, then President-Elect Trump promised as one of his first executive orders, he would place a 25 per cent tariff on all products coming from Canada and Mexico.

On Truth Social, he wrote in part, “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

According to Jody Lehman, owner of Trig Energy Services which specializes in industrial safety and environmental cleaning, this is part of the Trump playbook and said he believed the new president wants Canada to get on the same page.

“Restrictions on drilling and environmental and everything’s been hard – the Liberals have made it hard for us to succeed,” he said referring to the restrictions on the commodity.

“I think what he wants is…he would probably like to see a conservative government so that we can follow in suit with drilling and maybe being a little more aggressive on our minerals and resources.

According to Chmelnyk, some producers are trying to protect themselves by hedging their risks by signing contracts to lock in the price of oil over the coming months.

“I honestly can’t see them trying to hit us too hard with our oil as it is needed,” he said.

“This Canadian heavy oil is used for a lot of specialty type synthetic oils, and I can’t honestly see it.”

Crews laying pipe. (Submitted photo/Corey Chmelnyk)

If the tariffs do come as promised, Chmelnyk said it’ll be the smaller companies that take the hit if there is a worst-case scenario, but he is predicting it to be a positive development.

“At the end of the day, I’m happy that I think we have what we have down in the US – the change – I think it’s going to do us really good in the future,” he said.

“Once we see a change in government up here, which will help us a lot in the future and Trump will be able to work with Pierre [Poilievre], versus working with the guy in there now.”

According to Canada Energy Regulator (CER) website, in 2023 the country exported a 4 million barrels per day to the US – marking a three per cent increase from the year prior. It went on to say that in 2023 “crude oil exports amounted to 81 per cent of the country’s total crude oil production,” it read in part of the exports worth $124 billion.

Lehman, whose company offers utility, oil and gas services across Saskatchewan and Alberta, said he hasn’t seen anything in writing yet to make him believe that it’s a sure thing.

“Tariffs may come but I just think there’s a double edge sword,” he said.

“If we drill and open up the oil patch, what does that create for our communities and our people, kids – it creates jobs and it creates high paying jobs.”

He explained that is one thing the country as a whole is lacking because of inflation, cost of living.

“If he brings in high tariffs, yeah it could affect our economy, but I think it’s a ploy just to kind of get our stuff together in Canada and start opening things up a little bit.”

Lehman said North Battleford was lucky because larger companies like Cenovus Energy and Strathcona Resources were investing back into the area and he too sees a future where under a Trump presidency, the oil will flow.

“The jobs that they’ve created for young guys like power engineers, laborers, drivers, these are real great paying jobs,” he said.

“I believe with my workers and other people that we work with has created a good living for these people.”

Now that a change in government is also coming to this country, Lehman said if they can export their oil to the west and to the east, it would be beneficial for the nation.

“It only can benefit the province of Saskatchewan, Alberta and (British Columbia) and it’ll be huge for the economy.”

As for Chmelnyk, while he could see a reduction in demand for our crude oil in the worst-case scenario, he’s choosing to remain positive and said the area around the Battlefords would benefit from more industry-related companies – with this new administration, Chmelnyk said that is now possible.

“I think that’ll help us a lot, there’s a little bit of a roadblock right now and we’ve seen that effect for some time now,” he said.

“Yeah, we’re hanging in there, but with that change, honestly, we will all see some major, major changes for the good, for all of us, for sure.”

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julia.lovettsquires@pattisonmedia.com

On BlueSky: juleslovett.bsky.social