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Explainer: What are the likely implications of a Biden presidency for Canada?

OTTAWA (Reuters) - If Democratic Party candidate Joe Biden wins the Nov. 3 U.S. presidential election, the implications could be considerable for Canada after four years living with the unpredictable and combative Republican President Donald Trump.

FILE PHOTO: A woman watches as U.S. Vice President Joe Biden (L) and Canada's Prime Minister Justin Trudeau arrive at the First Ministers’ meeting in Ottawa, Ontario, Canada, December 9, 2016. REUTERS/Chris Wattie/File Photo

Biden’s environmental plans and desire to “transition from the oil industry” could pose challenges for Canada, the world’s fourth-largest crude producer, which sends virtually all its exports south of the border.

Biden says he will scrap permits for TC Energy Corp’s Keystone XL oil pipeline, which would run from the Canadian energy-producing province of Alberta to Nebraska.

Alberta is suffering from low oil prices and killing the pipeline could inflame separatist sentiment in a province which accuses Canadian Prime Minister Justin Trudeau of ignoring the energy industry.

While Trudeau has pledged to go even further than the country’s current 2030 climate change goals, policies to bring about change have lagged. Biden’s ambitious climate change plan, which includes $2 trillion in investment for clean-energy infrastructure over four years, could put pressure on Canada to act more aggressively on its own climate policies.

‘BUY AMERICA’

Biden’s economic program promises a $400 billion investment in U.S.-made goods and says “when we spend taxpayer money, we should buy American products”.

This could harm Canada because its economy is highly integrated with the United States, which takes 75% of all Canadian goods exports.

The “Buy America” issue caused tensions with the administration of former President Barack Obama in the wake of the 2009 financial crisis, when a similar provision forced Ottawa to lobby for waivers. Biden is promising to crack down on waivers, saying “too often, ‘Buy American’ operates like a suggestion, not a requirement”.

TRADE DISPUTES AND INTERNATIONAL RELATIONS

Trump had a turbulent relationship with Trudeau, famously dismissing him as “weak and dishonest” in June 2018. Trump twice imposed tariffs on Canadian aluminum, and mused about punishing Canada for its dairy policies.

Biden has promised to return to a multilateral approach in diplomacy - a tack favored by Canada - and says in his platform that “rather than picking fights with our allies and undermining respect for America”, he will work with friendly nations to address trade challenges.

HUAWEI AND CHINA

Canada found itself in the middle of U.S.-China trade war when it arrested a Huawei Technologies Co Ltd executive in 2018 on a U.S. warrant. Chief Financial Officer Meng Wanzhou is fighting extradition to face charges of bank fraud and misleading HSBC Holdings Plc about Huawei’s business in Iran.

Beijing subsequently arrested Canadian citizens Michael Spavor and Michael Kovrig, charging them with espionage, and stopped imports of canola seed.

People with knowledge of the Meng case say one solution in theory might be for the U.S. Justice Department to drop charges against her and prosecute the company instead. That could result in her being released.

Canadian officials, who have struggled to persuade their allies to present a united front on China, say Biden might be more open to pressuring Beijing as part of a concerted effort to change its approach on detaining foreign citizens.

Biden’s campaign declined to comment when asked about his approach to Meng and her case.

SUPPLY OF MEDICATIONS

Like Trump, Biden favors purchasing Canadian medications to help keep the cost of prescription drugs under control. Canada is pushing back, noting it has a population a tenth the size of the United States and so could not even begin to meet the needs of its neighbor.

MARIJUANA POLICY

Cannabis stocks got a big boost this month after Vice President pick Kamala Harris promised the Democratics would decriminalize marijuana at the federal level. This would bring the United States into line with Canada, which became the first developed nation to legalize the use of recreational marijuana in 2018.

The move would reshape how cannabis businesses are run in the United States, giving them access to banks and other traditional financial institutions. Decriminalization would also enable licensed Canadian weed producers to accelerate their U.S. expansion plans.

Reporting by David Ljunggren; additional reporting by Shariq Khan in Bengaluru and Trevor Hunnicut in New York; editing by Steve Scherer and Marguerita Choy

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