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Trump presidency signals uncertainty for Canadian construction

0 429 Economic

by Warren Frey

With the election of Donald Trump as president of the United States, several industry experts state Canada's economic future is for the moment uncertain.
Trump presidency signals uncertainty for Canadian construction

Though Trump ran as the Republican nominee, his policies didn't always align with the stances of either the Republicans or the Democratic party and he was perceived as an "outsider" aiming to disrupt the status quo, stated several political analysts during his campaign. He was, however, consistent in stating he wanted to enact a more protectionist stance regarding trade and U.S. labour.

Western Canadian construction industry stakeholders agree that the future of Canada-U.S. trade and business is unpredictable presently.

"There are very strong indications post-election that the United States is taking a more protectionist stance and that's generally a concern," said Independent Contractors and Businesses Association vice-president Chris Gardner. "Tariffs have a negative impact on economies and we're already living through that in British Columbia on a number of files."

Gardner cited the current tariffs on rebar as an example. He said those federal tariffs are meant to help central Canadian steel manufacturers, but with no steel industry in B.C., local companies must source rebar from elsewhere and often do so from U.S. suppliers.

"So the net effect of the tariff is to drive up construction costs in B.C., with taxpayers paying more for infrastructure, individuals paying more for homes and condominiums using rebar," Gardner said.

The skilled trades and cross-border labour movement may also be affected by the American shift.

"There's a very long history of moving workers across the border when required. I can't imagine if there was a shortage of a particular trade at a particular time in the United States they wouldn't come to Canada for needed skilled trades," explained BC Building Trades executive director Tom Sigurdson.

"But it's a bit premature to have those conversations. Trump promised billions in infrastructure spending, they require that spending and in a well planned spending environment they could procure their labour from their own state."

ConstructConnect chief economist Alex Carrick also sees uncertainty in the near term.

"At this point, nobody really knows what will happen, that's the problem," Carrick said. "I believe a combination of tax cuts, deregulation and infrastructure, if it happens, will provide a significant boost to the U.S. economy."

Canada is dependent on the U.S. economy, Carrick added, and the "spillover" effects could be positive for the country.

"But he's got conflicting goals. He wants U.S. interest rates to rise faster but the value of the U.S. dollar to fall, and those things don't go together," he said. "It's hard to see how the U.S. dollar won't continue to be strong, so U.S. barriers to trade might be offset by the weakness of the Canadian dollar."

A wider view of the world and increased trade with nations other than the U.S., Carrick said, might be to Canada's advantage.

"Canada has to think strategically. There has been a complacency in Canada that I have found disturbing for a long time," Carrick said. "If you are going to trade with these nations, you can't say no to pipelines and megaprojects. I understand environmental concerns, but this is not the way the world's going and we'll be left behind."

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