U.S. border tax plan would cut one percentage point from Canadian growth: study
Even with companies and politicians breathing a little easier after Justin Trudeau’s first encounter with U.S. President Donald Trump, it remains to be seen what the two governments actually agreed to.
A day after the Trudeau-Trump tete-a-tete, questions on critical files remained unanswered — from trade, to infrastructure, to taxes, to pipelines.
Trudeau cabinet ministers acknowledged Tuesday that the Trump-related economic uncertainty had yet to dissipate.
On energy, Natural Resources Minister Jim Carr said there’s still a lot of unfinished work when it comes to reminding Americans that the two economies are highly integrated.
“I’ve been spending an awful lot of time on the telephone talking to people who are very close to those in a position of influence in the United States to make that argument,’’ Carr told reporters in Ottawa after a cabinet meeting.
“We’re doing two things: we’re making arguments and we’re making friends — and then our friends will help us make the argument.’’
Canada’s crucial oil and gas industry has concerns about a possible border-adjustment tax as well as Trump’s pledge to boost U.S. energy production — even as carbon pricing in Canada is poised to become more expensive. On the other hand, the president did sign an executive order advancing the controversial Keystone XL pipeline, which would benefit the Alberta oilpatch.
In many ways, the joint statement released after the Trudeau-Trump meeting raised even more questions than it answered.
— The document declared the governments would “encourage opportunities for companies in both countries’’ to create jobs through infrastructure investments, but it did not offer explicit comfort that Canada would be exempt from any Buy America provisions.
— It mentioned the two sides would work together on labour mobility in various economic sectors. However, it didn’t say how it would make that happen or whether it would come through the upcoming renegotiation of the North American Free Trade Agreement.
— The statement said the two sides would continue talks on regulatory issues to make them more business friendly and to cut costs without compromising health, safety, and environmental standards. It did not provide details on how it would get there.
The joint declarations that follow meetings between U.S. presidents and Canadian prime ministers rarely include specifics and this one was no different.
However, the many unknowns surrounding Trump, and the potential for spillover into Canada, has created an intense thirst for detail.
Companies say they need to have confidence in the fine print before they can make big decisions in areas like investment.
On trade, business leaders said they felt some relief after Trump told reporters Monday that NAFTA would only be tweaked, rather than torn up, as he had promised on the campaign trail.
But they remained unsure what a Trump tweak might look like.
Parts of Corporate Canada has been bracing for the worst since Trump’s unexpected election victory in November. The combination of his unpredictability and his protectionist vows has raised concerns across many sectors.