Big changes for America’s biggest trading partner

Mark Garrison Oct 20, 2015
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Big changes for America’s biggest trading partner

Mark Garrison Oct 20, 2015
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America’s biggest total trading partner is not China. It’s Canada, which will soon be under very different new leadership. Justin Trudeau is set to become prime minister after his Liberal Party crushed Stephen Harper’s Conservatives in Monday’s election. The change of power will mean new economic policies, though some things America cares about won’t change. Here’s a look at key issues:

Keystone XL
The pipeline would carry Canadian crude through America. In general, politicians on America’s left don’t want it, while those on the right do. But it’s more complicated in Canada. Both Trudeau and his Conservative opponent back the pipeline. It’s pretty much a lost cause while President Barack Obama is in office. But expect Trudeau to raise the issue again, especially if a Republican takes the White House.

Spending
Canada’s big economic problem right now is that oil and other commodity prices are in the dirt. Trudeau says his administration is willing to go into debt to stimulate the economy. As a candidate, Trudeau promised a large-scale spending program to upgrade roads, bridges and transit. This will sound familiar to American ears, as the Obama administration has long called for far more infrastructure spending. But observers say Canada’s incoming government could actually make it happen.

“The Liberals won a really, really strong majority, a surprisingly strong majority government,” said Glen Hodgson, chief economist at the Conference Board of Canada, a nonprofit research firm. “So they can pass through our Parliament almost anything they want.”

Trade
An immediate issue facing the two countries is the Trans-Pacific Partnership, the trade deal being finalized now. Many Canadian policy watchers don’t expect major roadblocks for the TPP.

“[Trudeau] is in a pro-free trade party, so my guess is he will sign it,” said Jeremy Kronick, senior policy analyst at the C.D. Howe Institute, a think tank in Toronto. “I’m not sure there will be a huge change on the trade perspective.”

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