We can all agree: a Trump presidency means some big changes are coming for Canada.
The world was on the edge of their collective seat as the Trump/Clinton battle for the presidency came down to the wire. As battleground states like Florida, Ohio and Pennsylvania turned red and Trump’s electoral support began to tower over Clinton’s, it became clear that a Trump victory wasn’t just a far-off possibility (as the polls had predicted only hours earlier), it was about to become a reality.
America is Canada’s largest trading partner, and the two countries share the longest continuous border in the world. It’s a foregone conclusion that whichever leader Americans selected, it was going to impact Canadians, too. Over 80% of Canadians indicated they believed a Clinton presidency would be better for Canada. But now that Trump has secured the vote, we’re facing a very different reality.
How will a Trump presidency and administration impact Canada?
Like the fallout from Brexit, that remains to be seen. However, based on all the election promises Trump made, some of the biggest changes Canadians can expect to see materialize in the coming months include:
Trade agreements up in the air
Justifiably, trade is the biggest area of concern for many Canadians. As America’s largest trading partner, Canada stands to take a huge hit if Trump follows through with his election promises. Trump has previously said he’d pull out of NAFTA (North American Free Trade Agreement), which has governed trade between Canada and the USA since 1994. Trump has repeatedly backed a protectionist agenda, which would see America focus more on producing goods and services internally and less on trade.
In the same vein, Trump has pushed raising tariffs on incoming goods to protect American interests. This stance could have a catastrophic effect on Canadian oil and gas, agriculture and manufacturing industries, which would most certainly trickle down to other areas of the Canadian economy. Another recession is a very real possibility if the Trump administration sets a match to long-held Canadian trade agreements.
There have been some doubts about whether Trump’s proposals are feasible (they may violate World Trade Organization regulations), however only time will tell. If Americans do drastically reduce Canadian imports, Canadian jobs in the manufacturing, agriculture and oil and gas sectors will feel an immediate negative impact. Though roughly 75% of Canadian jobs are in the service industry, Canada is still heavily reliant on natural resources and manufacturing, particularly in provinces like Alberta, where 80% of Canada’s oil is produced. Canada can only hope that the American government considers renegotiating trade agreements before scrapping them altogether, and forcing a long drawn out process to draft new (possibly unfavourable) trade agreements.
Reviving the Keystone XL pipeline
Not all hope is lost for Canada’s oil and gas sector under a Trump administration. One bright spot for Canadians is the likely approval of the Keystone XL pipeline. Obama recently rejected the pipeline as outside of American interests. Trump, however, has said he’d revive the pipeline, so long as America gets a significant cut of the profits. This could be good news for the slowly recovering Alberta oil and gas sector, and give Canadian oil and gas jobs a much needed boost following a rough year dotted by the Fort McMurray fires and fluctuating oil prices.
A reversal of green initiatives
Trump has previously stated he believes global warming is an elaborate hoax, and will not make green initiatives a prominent part of his administration. Obama, on the other hand, has been a strong proponent of environmental initiatives. There’s a real concern that a Trump-led government will repeal many already agreed upon initiatives, many of which Canada is currently embroiled in.
Trump has repeatedly demonstrated that he will be a for-businesses president. Environmental initiatives are costly to businesses. Without government support in the way of subsidies and mandatory regulations, businesses may opt to avoid costly transitions to reduce carbon emissions and adopt green energy sources. This could impact Canadian manufacturing, as the higher production costs in Canada (due to mandatory green energy requirements) could price Canadian goods out of the market.
A new kind of international diplomacy
Foreign-policy has long been cited as a weak point of the Trump campaign. Trump has been accused of being oblivious (at best) or ignorant (at worst) to how foreign relations work. In the past, Canada and America have worked in tandem to present a united front on many world issues. Canada followed America into Afghanistan and Iraq. Both governments currently hold similar stances on world crises like ISIS, Russian aggression in the Ukraine, and the Syrian conflict. However that could all change if Trump and his Republican government drastically change America’s foreign policy stances.
Pressure to spend more on defense and military
America spends an incredible percentage of its GDP on military and defense: a whopping 4%. On the other side of the coin, Canada spends a relatively small percentage of our GDP on our military (about 1%). According to NATO (North Atlantic Treaty Organization), Canada has a commitment to spend 2% of our GDP on defense by 2020. We currently have no plans to up spending to meet these requirements. We’re also among the lowest spenders (by percentage) of any NATO member nations.
Part of the reason for Canada’s low military spending is that we’ve always stood with America. Their much more powerful military has always been at our back. Under Trump’s leadership, the American government may pressure Canada to increase military spending in keeping with the NATO agreement. Trump has previously threatened to abandon allies that don’t hold up their end of the bargain. If Canada wants to uphold strong military ties to the US, it’s likely we’ll be asked to put our money where our mouths are. Trump’s aggressive stance on ISIS has been one of the hallmarks of his campaign, so this threat may be more than just a talking point.
American exodus to Canada
As Trump took an early lead in the election results on Tuesday evening, the Canadian immigration website saw a massive spike in traffic. The influx of worried Americans seeking out alternatives crashed the website. According to The Star, the panic might not be new. Interest in Canadian jobs has actually been on the rise throughout election season. Americans looking for Canadian jobs spiked 58% on job board Monster in the last year.
Canadians may be looking at welcoming an influx of American expats, which won’t necessarily be a bad thing. Though there’s worry about Americans leeching Canadian jobs, Canada has a fairly complex immigration system that will no doubt weed out impulsive Americans seeking alternatives in the heat of a brutal election day. Canada’s immigration policy gives strong preference to skilled workers who have the potential to meaningfully contribute to the Canadian economy.
The true impact the Trump administration on Canada will be determined in the coming months.
The good news is that throughout the election Trump hasn’t said much directly about Canadian relations, good or bad, which means there’s still hope to build a positive, productive relationship.
As we all know, politicians from all walks of life and party affiliations have a less than stellar track record of keeping election promises. Though Trump ran on the premise of being an anti-politician, there’s a very real possibility he’s been playing the political game, saying whatever it takes to get elected. For the sake of all Canadians, let’s hope some of these election promises fail to materialize. Randstad Report
