What does the new US government mean for the Canadian economy?

World EconomyNine Canadian economists and public policy experts recently sat down with MacLean’s to discuss the top economic uncertainties facing Canada under the new US government. What are some of the issues they foresee in the days ahead? Key points from the conversation are below.

Armine Yalnizyan, senior economist, Canadian Centre for Policy Alternatives: “The uncertainties lie along three dimensions: timing, direction of change, and magnitude of change. Trump’s trade policies and his policies’ impacts on domestic purchasing power in the US could slow Canada’s economic growth.”

Dawn Desjardins, deputy chief economist, RBC Economic Research: “The implementation of import taxes by the new administration would present one of the greatest risks to Canada’s economy in the near term.”

Jennifer Robson, assistant professor of public policy and political management, Carleton University’s Kroeger College: “In the short-term, a big risk could be a much thicker border with the US.”

Sherry Cooper, chief economist, Dominion Lending Centres: “Most disturbing for Canada’s economy is the potential change in US trade policy, which is threatened to include border tariffs and the American exit from NAFTA.”

Meredith Lilly, associate professor and Simon Reisman Chair in International Affairs at Carleton University: “If the latest reports about the US’s plans for NAFTA are correct – addressing rules of origin and dispute settlement provisions – the consequences for the Canadian economy could be serious but manageable.”

Tammy Schirle, associate professor of economics, Wilfrid Laurier University: “I am most immediately concerned about jobs in industries seriously affected by NAFTA, such as Ontario’s auto industry.”

Frances Donald, senior economist Manulife Asset Management: “The elephant in the Canadian room is without a doubt the future of trade with the United States: trade makes up one-third of the Canadian economy, and three-quarters of that trade heads straight to our neighbours to the south.”

Laura Dawson, director, Canada Institute, Wilson Centre: “The President has identified the repatriation of manufacturing jobs, punishments for currency manipulators, and spending on infrastructure as priorities. There have been no statements directly targeting Canada but collateral damage is possible as he carries out these goals through, by example, higher import tariffs, scrutiny of Canadian monetary policy, and “Buy America” restrictions on infrastructure.”

Stephanie Carvin, assistant professor, Norman Paterson School of International Affairs, Carleton University: “Canada’s success depends on global order and stability…we are now faced with an international system where disruption – and not the stability Canada has long depended on – may be the new normal.”

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