This column by @jackmintz raises some concerns as a potential policy response to the expected cancellation of the KXL permit.

1/

First, Dr Mintz cites numbers for direct and indirect jobs created by KXL for both Canada and USA. It isn’t clear where these numbers came from or if they are permanent jobs. Methods for calculating induced jobs are notorious for their unreliable and non-robust methodology.

2/
Second, Dr Mintz proposes that Canada retaliate with duties and other trade restrictions, as what happened with aluminum. However, KXL is very different, and this changes the scope of available responses, especially under our trade agreements.

3/
Canada viewed the US duties on aluminum and steel as violating trade agreements. The retaliatory duties were permitted under those agreements as a response to those violations. They are not permitted in response to cancelling KXL.

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It is also somewhat odd to see an economist arguing for a trade war in any event, especially one tat would be initiated by a small, trade-exposed economy against a much larger economy. No one wins in a trade war.

5/
Some actions, such as a Netflix tax/royalty (and similar for international online services) aren’t offside trade agreements. Dr Mintz notes that Canada is already considering these policies, along with other nations.

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Prior to doing so, it makes sense for Canada to properly understand the effect such a tax regime would have, including whether or not there are benefits to proceeding in tandem with other countries.

7/
As a retaliatory measure, therefore, it isn’t very useful. It would be foolish to promise to rescind the tax in exchange for KXL if it is a good policy and other countries go ahead with it in due course.

8/
Jumping the gun by implementing the tax now, before the analysis is complete, risks creating a tax measure that is bad for Canada. As a general rule, bad policy decisions should be avoided, even if they are just to spite someone else.

9/
This DOES NOT MEAN Canada should just accept the cancellation of KXL. There may be many valid reasons for Canada to push the President to reconsider, and there may also be valid options for how Canada can make its case stronger.

10/
But in defending KXL, Canada should be mindful of its obligations under trade agreements as well as what policy options are in the best interests of Canadians generally. We should never let a wedge issue push us into a policy response that only hurts us.

/fin

More from Government

Long thread: Because I couldn’t find anything comprehensive, I’m just going to post everything I’ve seen in the news/Twitter about Trump’s activities related to the Jan 6th insurrection. I think the timing & context of his actions/inactions will matter a lot for a senate trial.

12/12: The earlier DC protest over the electoral college vote during clearly inspired Jan 6th. On Dec 12th, he tweeted: “Wow! Thousands of people forming in Washington (D.C.) for Stop the Steal. Didn’t know about this, but I’ll be seeing them! #MAGA.”


12/19: Trump announces the Jan. 6th event by tweeting, “Big protest in D.C. on January 6th. Be there, will be wild!” Immediately, insurrectionists begin to discuss the “Wild Protest.” Just 2 days later, this UK political analyst predicts the violence


12/26-27: Trump announces his participation on Twitter. On Dec. 29, the FBI sends out a nationwide bulletin warning legislatures about attacks https://t.co/Lgl4yk5aO1


1/1: Trump tweets the time of his protest. Then he retweets “The calvary is coming” on Jan. 6!” Sounds like a war? About this time, the FBI begins visiting right wing extremists to tell them not to go--does the FBI tell the president? https://t.co/3OxnB2AHdr

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