In this week’s The Seven…

• Venn diagram - AI and energy
• Tariffs tossed - U.S. Supreme Court rules against Trump
• Power up - Don’t forget about nuclear
• Keeping it local - Alumina in Canada?
• We’re in a trade war - So why are supply chains holding up?
• Who pays for U.S. Tariffs? - U.S. Fed says it’s mostly Americans
• Interesting Fact - Water consumption during Canadian hockey games
• Chart of the Week - Where does Alberta’s electricity come from?

“I've got the power!”

--“The Power,” by Snap!

I discovered this week that charts are easier to create on a slide than using your arms.

Standing on the stage at the Growing the North conference in Grande Prairie, I attempted to create a Venn diagram with my arms. Didn’t work.

My point, though, was to illustrate that Alberta and the Peace Region are at the intersection of AI and energy. AI needs power, and Alberta has energy. In the case of Alberta’s Municipal District of Greenview, a massive AI data centre (Wonder Valley) is being proposed that would harness abundant and low-cost natural gas in the region, along with geothermal.

In economic news, the U.S. growth engine sputtered in Q4 recording annualized growth of 1.4%. But it was still a decent year given trade headwinds, thanks to resilient consumers and the AI boom. U.S. GDP growth came in at 2.2% for 2025, compared to our estimate of 1.7% for Canada.

Today's Seven focuses on energy and supply chains. It’s also being sent to you at peak national distraction as Canada takes on Finland. Watch the game, and then read the Seven. Go Canada!

Tariffs tossed: U.S. Supreme Court rules against Trump

The much-anticipated ruling of the U.S. Supreme Court on President Trump’s use of emergency powers to impose sweeping tariffs (including the blanket 35% "fentanyl" tariff on Canadian goods and the reciprocal tariffs announced last year on “Liberation Day”) came down this morning. The justices ruled 6-3 that the International Emergency Economic Powers Act “does not authorize the President to impose tariffs.”

So what’s next? More uncertainty. While a significant blow to the President’s tariff policies, Bloomberg reports that “the White House has said it will quickly replace the levies using other legal tools.”

The ruling does not affect the sector-specific tariffs on aluminum and steel, auto parts, etc. as these were imposed using a different rationale (Section 232 of the Trade Expansion Act of 1962). Further, Canadian goods were already exempt from the 35% blanket tariff as long as they met country-of-origin requirements under the Canada-U.S.-Mexico Agreement.

Power up: Don’t forget nuclear

At the Growing the North event in Grande Prairie this week, the buzz around energy wasn’t just oil, natural gas and LNG. There was also talk about nuclear power.

In the electricity space, Alberta is dominated by natural gas with rising contributions from solar and wind. Coal was phased out in 2024, well ahead of the original 2030 schedule.

Nuclear has entered the conversation due to its ability to deliver large amounts of baseload power at zero emissions, and the improved safety of modern equipment. With the demand pull from data centres, industrial development and rising population, all electricity options need to be considered.

In Ontario, the Darlington New Nuclear Project - a collection of four small modular reactors - is under construction.

In Alberta, the Peace River Nuclear Project near the Town of Peace River has been proposed by Energy Alberta with a capacity of 4,800 megawatts. This project is in the planning phase. There are a number of hurdles to getting it across the finish line - regulatory, capital and labour. Alberta has appointed a Nuclear Energy Engagement and Advisory Panel to explore how to advance nuclear energy, with the report to be delivered to the Alberta Minister of Affordability and Utilities by March 31, 2026.

It’s on our radar and has great potential, but it’s not in our forecast as we wait for more progress on the project.  

Keeping it local: Alumina in Canada? 

Canada, and Quebec in particular, is a major aluminum producer. But the alumina, the compound used to make aluminum in Canadian smelters, is imported. It would be nice if the supply chain resided in Canada.

That could change one day. Canadian Energy Metals, a private company, is exploring the potential for the country’s first commercial alumina project in Saskatchewan. An initial assessment backs the case, and now the company is doing further testing to see if it’s economically feasible.

We’re in a trade war: So why are supply chains holding up?

Reading the news, you’d think that global trading patterns have been totally derailed since the trade war started. Last week, we talked about why this hasn’t happened as much as you’d think in the export data.

This week, the Bank of Canada dug into why supply chains have remained largely intact. They point to shipping costs remaining well below pandemic peaks, and delivery times roughly unchanged since the trade conflict started.

So what’s going on? According to the BofC, shippers learned from the pandemic. They are more efficient, have upgraded their fleet with larger vessels, and have better inventory management.

My takeaway? Yes tariffs are disruptive, but businesses are adaptable and supply chains more resilient than you may think.

We can’t be complacent though. Just because it hasn’t happened, doesn’t mean it won’t. In the post-rupture world, countries are using their economic strength to exert force on other countries. There are vulnerabilities everywhere if trade tensions escalate. Not convinced? Think about a concentration of computer chips in Taiwan, or potential blocking of the Strait of Hormuz (a critical route for oil shipments) near Iran.

A final note: It’s nice to see the Bank of Canada put out some accessible content in their new Sparks at Bank series that regular folks can understand.

Who pays for U.S. Tariffs? U.S. Federal Reserve says Americans

The Trump Administration talks about tariffs as a cost that foreign countries must bear.

Technically, the U.S. importer pays the tariff and remits it to the U.S. treasury - it’s effectively a tax on imports.

In reality, the ultimate burden is shared between the exporter (via weaker demand and lower prices), the business importing the product (thinner margins), and the consumer (higher prices).

To sort this all out, the U.S. Federal Reserve conducted an econometric study to isolate the impact. Their conclusion: “US firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025." The burden of the tariff is 86-94% on U.S. firms and consumers, depending on the time period studied.

The implication is that: 1) tariffs are adding to U.S. inflation, making it harder for the Fed to lower interest rates; and 2) by raising costs, tariffs are a drag on the consumer at a time of affordability challenges. We know that affordability is a hot-button political issue in Canada. There is now political pressure south of the border, with the U.S. Congress recently voting to remove tariffs on Canada (a largely symbolic move) and now the Supreme Court ruling against the “fentanyl tariffs.”

Interesting Fact: Water consumption during hockey games

Nothing is better than a high-frequency chart that captures the moment.

Canadians are glued to their screens watching Canada compete on the world stage. As you receive this email, Canada is playing Finland in the semi-final in men’s hockey (you can be forgiven for watching the game over reading the Seven) after yesterday’s nail-biting women’s final between the U.S. and Canada.

How big is Olympic hockey in Canada? To find out, look at the water usage during the gold medal game in 2010. EPCOR published this incredible chart (couldn’t find original source, but bloggers have it saved) showing spikes in water usage as Edmontonians (in unison) visited the facilities during intermission. Looking forward to EPCOR’s updated chart for 2026!