Trending in Business – How the US Economy Impacts Canadians

By Grant T. Smith

american flagI, like many, have recently noticed several beginnings or expectations coming out of our neighbour to the south:


  • Keystone pipeline is back on, by executive order.
  • Corporate taxes are going down.
  • Deregulation is the order of the day.
  • The government wants to rebuild existing infrastructure.


These things have one common thread: the US economy is open for business and the world should expect to see growth south of the border.


I certainly am a proponent of investing in infrastructure, as has been discussed in this newsletter several times over the years, but I also support a true science approach to climate change. This means I want to see sustainable development not unregulated short-term profit-driven answers to long-term challenges. What interests me today is a discussion of the impact these decisions will have in our lives over the next months.


Our economy is intertwined with the US – a focus on business south of the border will accelerate the recovery here at the same time. This means I am on watch for growth both in the US and at home. For example, I noticed an article in the Globe and Mail this weekend, by Jacqueline Nelson, that was flagging some expectations in the Canadian insurance industry. The large insurers in Canada see deregulation as a boon to their profit expectations. Apparently, Fairfax Holdings Ltd has moved to reduce their short positions on individual companies in the states, as they see US policy as an indication of growth.


I understand that the protectionist “America First” sentiment may cause anxiety for Canadian business people, but do not not forget that President Trump also indicated, in his meetings with Prime Minister Trudeau, that ours was an economic relationship that needed ‘tweaking’ not rewriting.  So I remain optimistic that we will be able to benefit from any growth we see in the US.


On the free trade front, I have a primary concern in the renegotiation of the softwood lumber agreement, as I believe it will be controversial and very challenging. I particularly see this as difficult while our dollar is so soft. We are currently able to produce in Canadian dollars giving us a huge (note the use of the word huge there) advantage when it comes to selling into the United States. Expect negotiations to be long, contentious and expensive.