As the U.S. presidential election inches closer towards a showdown between the presumptive Republican nominee Donald Trump and Democratic front-runner Hillary Clinton, many Canadians might wonder which presidency would be better for Canada’s economy.
New analysis from CIBC World Markets released May 11 suggests Democratic administrations have historically proven to be more beneficial to Canada.
“Democratic presidents have presided over faster growing economies. More importantly for us north of the border, since 1962 Democratic Presidents have also been associated with better Canadian growth statistics,” CIBC economists Royce Mendes and Avery Shenfeld said in their report.
While it may be difficult for some to look past Trump’s ongoing series of incendiary comments and controversies, the “fate of Canada’s economy is inherently tied” to the U.S., the report said.
On Keystone XL
The report stops short of giving a definitive answer on which candidate would be better for Canada, and Mendes said the answer could depend on your perspective.
“If you’re looking at a perspective from the oil patch, maybe Trump is your candidate given his ideas on Keystone XL,” Mendes told Global News.
President Barack Obama rejected TransCanada’s application for a pipeline in 2015, but the company continues to hold out hope it will be built depending on who wins in November.
Trump has supported Keystone in the past but said he would reject the pipeline unless the U.S. gets a “big, big chunk of the profits, or even ownership rights.”
Clinton said in September 2015 she was opposed to Keystone after reversing her position from 2010 when she was “inclined” to back it.
When weighing a Trump vs. Clinton administration, Mendes said the new analysis focused strictly on how they could potentially affect the Canadian economy.
“Some of the rhetoric that has come out from Trump and others, when you’re looking at it empirically you have to look past the noise,” he said.
How they view NAFTA and TPP
The report also looked at trade as the United States is Canada’s largest trading partner.
“Both candidates are against the Trans Pacific Partnership deal in its current form and, importantly for Canada, both Mr Trump and Secretary Clinton have publicly raised concerns about the North American Free Trade Agreement (NAFTA),” the report said. “Trump has called it a disaster, saying he would renegotiate the trade deal, while Secretary Clinton has stated that the agreement needs to be reassessed and adjusted.”
Trump has called the TPP a “bad deal” that would “send jobs overseas.” During a November debate to further explain why he disagreed with the TPP he cited “China and India” as countries that take advantage of the United States. Neither China nor India are part of the 12 country trade agreement.
Politifact, a fact-checking website, found that while Clinton now opposes the trade deal, she said in 2012 the deal set “the gold standard.”
The report also says that if Trump were to block imports from countries like Mexico or China that compete with Canada in U.S. markets it could be a win for some Canadian sectors, like exports.
Mendes says when looking at the broader economic picture “we give the nod to Clinton.”
Donald Trump has also suggested that the U.S. could save money by demanding its NATO allies boost military spending to two per cent of GDP. Defence Minister Harjit Sajjan expressed skepticism at the idea during a trip to Washington this week without committing to the increase or ruling it out.