Why isn't Canada blocking the Welland Canal? Other trade war questions answered

Why isn't Canada blocking the Welland Canal? Other trade war questions answered

CBC News answers your questions about export taxes, sales bans and toilet paper

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Reading through the emails that readers send to CBC News, one gets the impression they don't want just "elbows up" in the Canada-U.S. trade war, but also sticks, knees, skates and whatever else might be lying around.

One of the most common questions is some variation of, "Why isn't Canada doing X?" — where X is a tactic or tariff the reader supposes will hit the U.S. where it hurts.

Here's a look at some of those suggestions and what key players or observers have had to say about them.

Why doesn't Canada put export duties on energy as the cost is borne by Americans not Canadians?

Don Drummond, former chief economist for TD Bank, told CBC News late last month that export taxes are an option. Former prime minister Jean Chrétien said this week that an export tax on oil, gas, electricity and potash might be needed.

In 2025, Canadian commodities accounted for 63 per cent of oil imported into the U.S., 81 per cent of imported electricity, 99 per cent of imported natural gas and 80 per cent of imported potash.

However, Wolfgang Alschner, the Hyman Soloway Chair in Business and Trade Law at the University of Ottawa, warned that the long-term effects of such a move could be severe for Canada, both through lost revenue and damage to the relationship with its biggest customer. The U.S. could respond much as Canada has to U.S. President Donald Trump's tariffs: by trying to diversify away from a partner it can no longer count on and finding new suppliers.

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University of Calgary economist Trevor Tombe and Christopher Ragan, founding director of McGill University's Max Bell School of Public Policy, made the same point separately: targeting U.S. energy could play into the hands of the U.S. administration and unite Americans against Canada.

Prime Minister Mark Carney said in July he doesn't "see the value" in using energy exports as a bargaining chip. Carney said being a reliable supplier is important.

"Canadians are reliable. Canadians can be trusted," he said.

Why not ban sales of certain goods in Canada?

This has mostly already happened at a provincial level with alcohol, in every province except Alberta and Saskatchewan. Saskatchewan this week added a retaliatory levy on U.S. alcohol.

Finance Minister François-Philippe Champagne has shown no interest in that sort of approach, stressing that Canada's response will be proportionate, strategic and targeted.

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The U.S. may, of course, reply in kind to any ban, as it has with alcohol: Most imports of Canadian-made alcohol will be banned from the United States on Sept. 29.

Tombe, discussing tariffs, told CBC News late last month that Canada has to be careful when selecting products to target because they need to be items Canadians can replace relatively easily but Americans cannot.

If tariffs are applied to harder-to-replace items — "a particular type of circuit board, say, or piece of machinery," that merely complicates life and increases costs for the Canadian importer, Tombe said.

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Can Canada stop U.S. ships using the Welland Canal?

The Welland Canal is on the western half of the St. Lawrence Seaway, which connects the St. Lawrence River to the Great Lakes. The canal links Lake Ontario to Lake Erie using eight locks, all in Ontario, that can be filled with water or drained to move vessels between different water levels.

But the seaway is overseen by both the U.S. and Canada.

The Great Lakes St. Lawrence Seaway Development Corporation administers the seaway on the American side as a federal agency within the U.S. Department of Transportation.

In Canada, the federal government owns the Canadian portion of the seaway, but it is managed by the non-profit St. Lawrence Seaway Management Corporation.

The U.S. also controls several important locks, including ones in New York state between Lake Ontario and Montreal and others in Michigan that connect Lake Superior and Lake Huron.

John Boscariol, a Toronto-based co-head of international trade and investment law at the Canadian law firm McCarthy Tétrault, told CHCH News in Hamilton that closing the canal would be "shooting ourselves in the foot" and would hurt Canadian businesses just as much as U.S. businesses.

Trump critic Jennifer Hillman, formerly general counsel at the Office of the United States Trade Representative under then-president Bill Clinton, told CBC News Network it would "absolutely be a total violation of international law, and I think not really a good idea because you're blocking both sides' goods.

"I would hope that's not a road anybody would go down."

What questions do you have about the latest tariffs? Send an email to ask@cbc.ca.

With files from CBC's Peter Zimonjic, Darren Major and Evan Dyer and The Canadian Press