Canada could be affected by a lot more than merely potential tariffs as U.S. President Donald Trump kickstarted his plan for America with a slew of actions on Day 1 of his mandate.
Canada’s economy has not kept up with that of the United States in recent years, with lower productivity and an ever-growing gap between the two countries in GDP per capita—a key indicator measuring prosperity.
Trump has now laid a path that could leave Canada further behind when it comes to attracting investors, by shedding regulation, reducing bureaucracy, and unleashing energy production in the United States.
At the same time, Canada could stand to benefit from a hotter U.S. economy, and Prime Minister Justin Trudeau made the pitch this week that Canada could contribute to America’s coming “golden age,” as described by Trump in his inaugural address. Trudeau said Canada can provide affordable resources such as energy and critical minerals. Ottawa has promoted critical minerals development as part of its plan to transition away from hydrocarbons.
On the energy front specifically, the Liberal government’s current energy model goes the opposite way of that taken by Trump, with the increasing regulatory environment faced by energy projects coupled with the government’s aim to reach net-zero emissions through caps and regulations. The Liberal government says instead that the focus on achieving net-zero emissions and advancing renewable energy comes with its own tech boom and industrial opportunities.
Aside from the economy, Trump’s intended crackdown on illegal immigrants and crime could have a direct impact on Canada if migrants and drug cartels decide to head north.
‘Energy Emergency’
During his inauguration on Jan. 20, Trump signed dozens of presidential actions that will have broad impacts on policy and make 180-degree turns on the previous administration’s agenda.
Former U.S. President Joe Biden nixed the Keystone XL pipeline project, which would have linked Alberta to refineries on the U.S. Gulf Coast, on his first day in office in January 2021.
Trump has not announced the project’s resurrection but issued several executive orders around the energy theme, including one declaring a “national energy emergency.”
