On Friday evening, August 21, trade negotiations between the United States and Canada broke down. Since then there have been tariffs and retaliatory tariffs issued by both sides, and vitriol from the mouths of politicians rarely heard between the two neighbors.
Canadian politicians have discussed everything from removing American alcoholic products from Canadian stores to cutting off electricity in northern American cities (as suggested by Toronto Mayor Olivia Chow). Americans have responded by noting that, among other things, oil and gas pipelines that bring Canadian fossil fuel products to Canadian refineries traverse through the northern United States, making them susceptible to shutdowns by the United States. The most significant of these pipelines in known as "Enbridge Line 5" and is shown on the map below. This pipeline transports Canadian fossil fuels (including jet fuel) from Superior, Wisconsin to end up back in Canada at the refineries of Sarnia, Ontario.
For the last six years, Michigan Governor Gretchen Whitmer has been trying to shut down this pipeline, claiming that it endangers the Straits of Mackinac, where the Northern and Southern peninsulas of Michigan meet. The Trump Administration has been adamant that this pipeline remain open, and the issue is now being fought in Court. Should the Administration now shift its position in relation to the trade dispute, the impact on aviation could be severe.
Line 5 transports 45% of the jet fuel used in Ohio, Michigan, Pennsylvania, Ontario and Quebec. Anything that impacts this flow could cause a huge disruption to major airports such as DTW, YYZ, YUL and YQB.
In July, Alberta Premier Danielle Smith and Ontario Premier Doug Ford proposed a new pipeline called “Northern Shield” that would remain entirely in Canada and travel 3,300 kilometers from Hardisty, Alberta, to Sarnia, Ontario. This could be a substitute for Enbridge Line 5. Of course, it is likely that this would take years, and run into the same environmental and permitting problems that so bedevils large infrastructure projects, especially in Canada.
Simply looking at a map shows how much longer the Northern Shield route would be than the Line 5 route. That would mean higher costs for jet fuel, which clearly would affect airline ticket prices. While this would start in airports in eastern Canada and Midwest America, it quickly would ripple through the entire continent.
The economies of both nations are extremely intertwined. Any stimulus that disrupts one impacts the other. While aviation has not been much discussed in the press, it is likely to feel any disruption quite hard.
If you have questions about the potential impact of U.S.-Canada trade disputes on aviation, energy infrastructure, or cross-border business operations, please contact any member of Flaster Greenberg's Airport Group.
