Economist sees reason for optimism in tide of uncertainty in U.S.

As the world sees a resilient strain of populism bring about a wave of new protectionism, Canada’s exporters may be feeling a little queasy.

But economist Peter Hall looked around a room full of morose Edmontonians on Thursday morning and assured them the best is yet to come. Both for the Edmonton Oilers and the Alberta economy.

“I see a lot of people are dressed in black,” said Hall, Export Development Canada’s chief economist, at the beginning of an early morning speech, hours after the Oilers crashed out of the playoffs at the hands of the Anaheim Ducks.

Hall’s optimism about the Oilers — he expects this team to become a dynasty — also extends to the world economy, despite what he described as a populist revolt against its very architecture.

His point? Things may look bad now for the Oilers and the economy, but the long-term trends are pretty good.

Speaking to a crowd of business people at the Chateau Lacombe, Hall said he expects 19 per cent export growth in Alberta this year, which will be the highest in Canada. Despite recent small gains, oil prices are still stubbornly below $50 per barrel, which Hall described as a “short-run interruption” and not some new normal.

Most importantly, he sees great things coming from the United States as millennials emerge from a recession-induced stagnation and start joining the economy. Since the global financial crisis in 2008, growth has been steady but underwhelming and Hall expects that to start changing.

That growth would be great news for Alberta’s roughly $90 billion per year worth of exports to the U.S.

With U.S. President Donald Trump promising to “make America great again” with a wave of protectionism, Hall argued that keeping a steady hand on the tiller might be the best way to make that happen instead.

“The world economy is turning the corner and the greatness is coming all by itself,” said Hall.

He estimated that Canada supports about 1.7 million jobs in America through trade and said 32 U.S. states count Canada as their No. 1 trading partner. Many of those states helped put Trump in the White House.

“I don’t think they voted to put those jobs in jeopardy,” said Hall.

The U.S. economy is primarily consumer-driven, which means it can be more self-sustaining than other economies.

But it also means people are more sensitive to price changes. The protectionist policies coming out of the U.S., such as a proposed border adjustment tax, will almost surely raise prices in the country.

“If you impose a border adjustment tax, who gets to pay for that? American consumers get to pay for that,” said Hall.

Hall said the worldwide uncertainty actually creates a big opportunity for businesses who have been sitting on cash for years. Now is the time to start investing it, he said.

“A lot of people are running from this scary news they’re hearing. Isn’t that an opportunity for you and me to get involved in the marketplace?”