How the US Election Is Expected to Impact Canadian Entrepreneurs
The entire world is watching the US Presidential Election unfold with bated breaths. Both candidates have completely different economic policies that they’re planning to implement once they come into power, which could have far-reaching global implications.
As of now, Joe Biden, the Democratic nominee, has a substantial lead over the incumbent President Donald Trump. However, there’s also a race going on between both parties to capture the Senate. If the Republicans manage to achieve a majority in the Senate, a Biden administration would face a tough time, trying to advance its agenda.
If opposing parties win the House of Representatives, the White House, and the Senate, it could result in political deadlocks for years to come, causing no change in the current status quo. On the other hand, a complete victory by a single party could allow the administration to tinker with the economy more freely.
Canadian Economy Vulnerable to Protectionist Measures by the US
The Canadian economy is highly dependent on trade, with exports accounting for over 32% of the country’s GDP. Stable and sustainable trade ties are highly important for Canada as it exports merchandise valued at over $50 billion every year.
If Biden wins, the US is likely to come back to the CPTPP, which would rekindle the flames of international multilateralism – a concept that has been in peril over the last few years with Trump’s refusal to engage with international economic and military organizations like the WTO and NATO respectively.
Irrespective of who wins the next election, the current financial crisis is likely to force the American administration to enforce protectionist measures to safeguard the US economy. Canadian exporters may face more challenges of this nature in the next few years.
The Energy Industry
The oil industry is likely to be affected by the US election as well. The Keystone XL pipeline’s proposed expansion, which would have transported 830,000 oil barrels per day to Gulf refineries from Alberta, did not receive any approval from the previous Obama administration. This project is still plagued with economic and logistical challenges, which are likely to be exacerbated if a Democrat President comes to power.
If Biden is elected, his administration might also go back to the Paris accords and make new investments into renewable energy projects in order to ensure a carbon neutral US economy by 2050. Such a move could be highly beneficial for Canadian companies in the renewable energy sector.
What Should Canadian Entrepreneurs Be Prepared For?
- Though Biden is currently leading the polls, several swing states are coming up inconclusive in the surveys. It’s also not yet clear who might take control over the Senate. If the White House and the Senate are occupied by different parties, this could limit the next President’s abilities to introduce new policies.
- A Biden victory would be great for Canada as the ambiguity over tax issues and trade would draw to an end. Multilateralism would receive a huge boost as well, which is great news for the Canadian economy. Renewable energy firms in Canada will be able to take advantage of climate change reforms in the US.
- The oil sector in Canada would have a better time with a Republican President in the United States. However, that would also mean a continued weakening of the Canadian economy and an unpredictable administration in charge of negotiations, which will result in major problems over the long run.