Trump Or Biden: Who’s Better For Atlantic Canada’s Economy?
HALIFAX — Americans head to the polls today to choose their next president. But while many will pull the lever with the future of their country in mind, their decision will also impact, in a not-insignificant way, the economic future in Atlantic Canada.
Brandon Ellis is a Senior Manager of Policy at the Atlantic Chamber of Commerce. He says while Atlantic Canada’s economy isn’t entirely dependent on the United States, the country looms large on our economic landscape.
“We have to start by acknowledging how big a trading partner the United States is with Canada,” he says.
Roughly 70 percent of everything Atlantic Canada exports goes to the U.S., which means American business’ ability to buy our products has a major impact on Atlantic Canada’s economic health.
And during the Covid-19 pandemic, Americans have been buying far, far less.
Billions Lost In Exports To America
Fred Bergman, a senior policy analyst at the Atlantic Provinces Economic Council, says Atlantic Canada has lost almost $4.3-billion worth of exports to the U.S. since the pandemic began.
That means Atlantic Canada’s economic recovery is directly tied to how quickly the U.S. can get Covid-19 under control and its economy back on track.
Consider, he says, two of Atlantic Canada’s major exports: seafood and potatoes. Both are significantly affected by whether restaurants are open and serving lobster and French fries. Or think about New Brunswick lumber, which becomes much less important in the U.S. as development slows down.
But the U.S.’s ability to control the pandemic is about much more for Atlantic Canada’s economy than how much we can sell them.
The Economic Impact Of Uncertainty
Ellis points out that an out-of-control pandemic means continued uncertainty. And while some businesses have thrived during the pandemic and the uncertainty it’s caused, more are suffering.
“The one thing that the business community needs more than ever is certainty. And with this pandemic ongoing any certainty is out the window,” he says. “The longer this pandemic goes on, the longer it remains unchecked, you’ll continue to see volatility within the market, and volatility within business.”
Donald Trump has been roundly criticized for failing to take the pandemic seriously or take the necessary steps to bring it under control.
The U.S. has seen close to 9.5 million people infected with Covid-19 and more than 230,000 people dying from the disease there.
Anthony Fauci, America’s top infectious-disease expert, said recently the county “could not possibly be positioned more poorly” to combat the pandemic.
While Joe Biden hasn’t been put to the test on the issue, polls show Americans believe, by a large margin, he is better equipped to handle the pandemic.
‘Tariffs Are A Big Concern’
Ellis points out that trade uncertainty between Canada and the U.S. will be affected by more than Covid-19 in the coming years.
He says trade policies enacted by Trump over the last four years have been “extraordinarily volatile” and “historically different” from normal Canada-U.S. trade relations.
“Tariffs are a big concern. We’ve seen this administration, more than any other administration I can recall, use tariffs as a retaliatory measure when trade is not going in a way that they perceive as beneficial to their country. So tariffs are large concern within the Atlantic region, particularly in New Brunswick where we’ve seen tariffs go forth on softwood lumber,” he says.
Bergman agrees Trump’s tendency towards trade protectionism would be bad for Canada but said a Biden presidency might come with tariffs of its own.
Biden is much more interested in environmental protection than Trump and wants the US. to sign back onto the Paris Climate Accord.
The Paris agreement includes economic punishments for countries not meeting its goals, and if the U.S. signs back on Atlantic Canada’s exports to the U.S. could suddenly be slapped with tariffs.
“If Canada’s [greenhouse gas] emission are not on the same path as the Paris climate accord, and they may not be, then there’s a risk that certain countries, including Canada, could face carbon adjustment fees, which is effectively similar to a carbon tax,” Bergman says.
Northern Migration For Over-Taxed Businesses?
Ellis says Atlantic Canada could also feel the impact of U.S. tax rates.
“Business goes where business is welcome, and if the United States has a competitive tax regime moving forward over the next four years, you’re going to see significant investment in the United States,” he says.
However, if the U.S. taxes business more heavily — either because the country needs to pay for government programs during the pandemic or for more ideologically driven reasons — it could drive businesses to move to more tax-friendly regions.
“If [the next president] chooses to increase taxes I think you’re going to see a calamity of events that cause businesses to flee the American market and maybe move north…. and that could mean more investment in Atlantic Canada,” he says.
He said recent efforts from provincial governments to lower business taxes could make Atlantic Canada more attractive for businesses looking to escape new taxes in the U.S.
Trump is generally seen as more business-friendly of the two candidates, and during his first term passed a significant tax cut that impacted businesses.
Biden, meanwhile, has promised more help for businesses recovering from Covid-19 but has said he will level a new offshoring tax on certain businesses.
Ultimately, neither Ellis or Bergman would say outright which election outcome bodes best for Atlantic Canada. Covid-19 makes so much uncertain, and politicians rarely follow through on everything the promise while campaigning.
A Bergman points out, Atlantic Canada’s economy is diverse, and depending where one sits with it, different outcomes can mean drastically different things.
“It’s going to depend on perspective. I think there’s plusses or minuses on either side of the coin, and that makes whose camp you in a bit more complex,” he says.