The Trump effect on Canada
“The President-Elect campaigned on a pledge to repeal the North American Free Trade Agreement; this could have implications on the insurance industry in Canada in terms of insurers’ ability to bring in American adjusters to assist in special circumstances, like we saw following the Fort McMurray wildfire.”
– Andrew McGrath, media relations manager, Insurance Bureau of Canada
“RIMS is ready to monitor new regulations that could impact insurance markets, as well as organizations’ ability to effectively manage risk. We look forward to ongoing engagement with government representatives to ensure the best interests of our members are served.”
– Julie C. Pemberton, RIMS president
Trump has pledged to scrap estate and gift tax, which means Canadians with U.S. real estate or operating businesses could benefit from a new capital gains tax planning avenue and easier estate planning. “You’d see a lot more Canadians using flow-through structures rather than corporations.”
– Abe Leitner, director of tax planning at Goulston and Storrs, New York City.
After a call to congratulate Trump on winning, Prime Minister Justin Trudeau told reporters in Sydney, N.S.: “… it was a strong beginning to what is going to be a constructive relationship.”
Trump plans to axe the Trans-Pacific Partnership (TPP), which would lower trade barriers, allowing Canada to import goods at lower prices, facilitating “higher productivity, higher GDP and higher incomes.”
– Trevor Tombe, assistant professor, Department of Economics, University of Calgary.
Trump has threatened to renegotiate or withdraw from the North American Free Trade Agreement (NAFTA), but could face resistance from legislators in states that have reaped the benefits. “You tear that up, my mother used to say, ‘you’re cutting off your nose to spite your face’.”
– Brian Mulroney, former prime minister and architect of NAFTA.
An anti-immigration president will likely mean tougher border crossings for Canadians, suggested Heather Segal of Segal Immigration Law. Canada may even see an influx of American citizens seeking a new home – on election night, Canada’s Immigration and Citizen website reportedly “crashed” and searches in the U.S. for one-way flights to Canada more than doubled, said Cheapflights.com.
Trump’s win could breathe new life into plans to build the 1,900-kilometre Keystone XL pipeline from Alberta to Nebraska, as Trump has said he would approve it. However, Trump favours oil and gas drilling on federal lands, which could stifle appetite for Canada’s oil and gas production.
Trump has called global warming a “hoax,” pledging to cancel the landmark Paris Agreement. In response to Trump’s opposition to Canada’s carbon-tax plan, Trudeau insisted “there is tremendous economic disadvantage” to not taking strong action in the fight against climate change.
Sources: The Canadian Press; Advisor.ca; CBC News; The Globe & Mail; Huffington Post; Macleans.ca; CTV’s Question Period
Copyright © 2016 Transcontinental Media G.P. This article first appeared in the December 2016 edition of Canadian Insurance Top Broker magazine