Wednesday looked like a dark day for Canadian business. Not only was the U.S. cutting taxes to become competitive, there was talk that the Trump administration would sign an executive order to kickstart the process of withdrawing from NAFTA.
Not re-negotiating, but withdrawing. If the Americans pull up the drawbridge on NAFTA, it will make spats over milk and softwood lumber look minor.
Even if you think the trade deal stinks, the reality is our current economy is built upon the favoured access it gives us to the American market. Take that away, the speedy customs processing, the lack of tariffs and Canada’s economy would be in for a world of hurt.
So, it was good the White House walked that back late Wednesday. Negotiations for a new deal should start soon and depending on how things go it could be good or bad for Canada.
Whatever you think of Trudeau and the Liberals, for the sake of the country and jobs you have to hope that he gets a good team of negotiators.
But NAFTA and what may happen there is just part of the economic woes Canada is now facing due to the Trump administration.
Watch as I explain why these moves could have new businesses reconsidering which side of the border to set up their new plant or business on.
Do you go on the U.S. side where you’re guaranteed access to the U.S. market regardless of what happens to NAFTA? Where the tax rate was lowered to the Canadian rate?
Or do you set up in Canada where some provinces have raised corporate tax rates, where taxes on high income earners have risen, where payroll taxes like EI premiums have already gone up and will rise again even before the CPP hike?
Where carbon taxes are already in place or soon to be implemented and are destined to rise according the diktat of Justin Trudeau.
Trudeau and his team were warned this was coming and they chose to push ahead saying that pricing carbon was the most important thing for Canada.
Pricing carbon won’t feed a family, or create jobs, it will kill jobs, especially when combined with the latest American moves and threats over NAFTA.