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Canada’s oilpatch pays America $60 million a year to export crude

Canada’s oilpatch pays America $60 million a year to export crude

CALGARY — A little-known tariff is costing Canadian oil companies $60 million a year and though it predates Donald Trump’s presidency, it’s likely to persist even if the new North American free trade agreement comes into force.

Oil might be the last export category that traders would expect to pay tariffs on — after all, Canadian oil supplies have been touted as a pillar of U.S. “energy security” by multiple U.S. presidents — but Global Affairs Canada, which manages the country’s diplomatic relations, said companies sending crude over the border in recent years are annually spending a total of amount $60 million in tariffs and duties, an amount that has remained more or less steady through the industry’s ups and downs.

Those payments may not sound like much on a per-barrel basis — about 10.5 cents each — but traders say it makes a big difference at the margins, especially since oil prices have fallen and Canadian oil prices have remained persistently low. Western Canada Select heavy oil averaged US$41.77 per barrel on Friday, or US$10 per barrel less than West Texas Intermediate.