Whether it’s “Buy American” or his anti-NAFTA stance, Donald Trump’s protectionist views have been a source of apprehension for Canada, and a new TD report warns the incoming administration could hurt some provinces more than others.
Since Trump’s Nov. 8 election there have been concerns about what his presidency could mean for the Canadian economy, especially in light of his repeated threats to tear up the North American Free Trade Agreement.
“A great deal of protectionist rhetoric was a part of the presidential campaign, which could be harmful to Canada’s manufacturing and exporting regions should such policies be enacted,” said a report from TD economics released Monday.
“While the anti-trade remarks were not necessarily directed at Canada, any renegotiation of the North American Free Trade Agreement (NAFTA) would impact trade with the largest foreign market for each province’s exports.”
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The report found that provinces with economies based on non-energy exports – like Ontario, Quebec, Nova Scotia, and PEI – have the most to lose under a Trump administration.
Whether Trump will make good on his anti-trade threats remains to be seen. Following the U.S. election, Prime Minister Justin Trudeau’s government announced it was willing to open negotiations on NAFTA.
However, Trudeau said earlier this week he would not hesitate to protect Canadian interests if they clash with Trump’s agenda.
The provinces that have the most to gain are Alberta and Saskatchewan, according to TD, as Trump and his administration are vocal supporters of the Keystone XL pipeline, which was blocked by the outgoing Obama administration.
Earlier this month, Trump suggested he’ll move quickly on the Alberta-to-Texas oil pipeline. He’s also named the CEO of Exxon Mobil as his secretary of state, Rex Tillerson, who has long supported the project.
The Trudeau government – which recently approved two major pipeline projects – has also been in favour of Keystone.
“This would naturally benefit the western region of Canada over the longer haul by increasing export capacity for Alberta oil,” the report said. “It would support both the Alberta and Saskatchewan energy industries by reducing the backlog, boosting related manufacturing, and lowering the discount on Canadian oil prices.”
An early test of Trump’s administration will focus on the softwood lumber dispute between Canada and U.S. after a previous agreement lapsed this summer, according to TD, which would greatly impact B.C. and Quebec.
The long-standing complaint from U.S. producers states that Canadian lumber is subsidized and exporters are selling lumber at a price that undercuts American producers. Canadian officials have rejected the claim of unfair subsidies.
It is still unclear how Trump’s administration will deal with the dispute. However, a transition team memo obtained by CNN in November suggests Washington is about to embark on an “aggressive, protectionist approach to trade both with Mexico and with Canada” that would include softwood lumber.