Canada Trumps US Economy

Date PublishedDecember 23, 2016
CompanyMoyo Inc.
Article AuthorSteve Chapman
Article TypeDecember 2016 Issue
CategoryArticles, Business
Tags, , , ,
PULSE Interactive

Canada Trumps US Economy

Right or wrong, the United States is Canada’s largest and most significant trading partner. At seven times our GDP and 10 times our population, the balance of trade is massively one sided. Even relatively small changes in US import policy can have a profound impact on Canada.

We are currently facing multiple disadvantages with the low price of oil and the poor showing of our dollar at $0.75 USD. This is greatly adding to the cost of everything we bring across the border and subsequently meaning we need to export more, not less. We now have the lemons. We need the lemonade.

Although many of Trump’s election rhetorics will likely fall by the wayside, it is probable he will focus strongly on job creation. That means more finished products being built in US factories and trade barriers erected to make them competitive. And, likely more raw resources coming from local producers.

However, the long term negative impact of trade barriers is well documented, so this directive will hopefully be short lived. Making imported products more expensive will help create jobs for a small number of Americans but at the expense of all Americans paying higher prices. With 14% of Americans below the poverty line and over 50% living paycheque to paycheque, this hurts more people than it helps. Self-interest will usually prevail.

Canada Trumps US Economy


One immediate priority for both Alberta business and the NDP government is to refocus our attention on small business.

You cannot legislate competitiveness. Full employment at minimum wage jobs will not help America become great again. Nor will it help Canada. We need to think bigger.

Trump’s election may help Alberta get a pipeline through to the Gulf of Mexico; although, he has clearly stated the cost will be high. We are still better off with a pipeline to Eastern Canada where our raw resources help create Canadian jobs and profitability.

The proposed Carbon Tax will further create significant disadvantages for Canadian exports, especially if the US cuts back on their CO2 commitments. The US is the second largest emitter of CO2 next to China, which is 10 times that of Canada. We have already seen how poorly executed green initiatives have skyrocketed electricity prices in Ontario. Sadly, both the NDP and Liberals seemed committed to driving the Canadian economy off that particular cliff.

If anything, the election of Trump to the most powerful political office in the world should be a warning to Alberta NDP and the Federal Liberal party that there are changes coming to  the world’s political landscape that may make Canada more and more irrelevant internationally. At a huge cost to us. The differences between our two countries are starting to outweigh the similarities. There are many other countries who would like to take our place as America’s preferred dance partner.

Now more than ever, we need to stay front and center as a contender. Political and business leaders need to work together to keep Canada’s spotlight bright. We need to focus on the strengths we bring to the world market while at the same time strengthening our internal economy.

Canada Trumps US Economy

With the dollar at $0.75 USD, buying Canadian makes more sense than ever. This is what is so confusing about political resistance to East and West pipelines. They not only create needed jobs in the local markets, but they generate more wealth into Canada. This means more money to buy Canadian manufactured goods from down east and more generous transfer payments.

If anything, we should be taking a page from the Trump playbook about reinvesting into our own country as best we can but without isolationist tariff policies. If ever there was a time to make Common Sense a Common Practice, then it is now.

By continuing to show our southern neighbour the value of Canadian relations, we can likely offset any challenges that come from rethinking NAFTA, which most people do not understand well anyway.

Trump’s proposal to veto the Trans Pacific Partnership might have more sweeping implications. It is clear Trump does not fully understand some of the benefits that such trade partnerships actually have for the US economy.

One immediate priority for both Alberta business and the NDP government is to refocus our attention on small business. More than 60% of jobs and over half our GDP come from businesses with less than 500 employees. Small businesses are the best answer to our current employment challenges and have a proven track record of flexibility in a changing marketplace.

We do not know exactly where Trump might lead the American economy. We do know, for the most part, it will be designed for their advantage over anyone else’s. But, America is a massive ship and any change in direction takes time. Effective small business practices on both sides of the border will be the key to keeping Canada both relevant and pro table in this changing landscape.

Steve Chapman
Change Management Specialist

canada trumps us economy






Originally published in the 

December 2016 Issue of Oilfield PULSE