What does Biden’s victory mean for Canada?
By Ashley Friesen and Paige Perrons
Many Canadians have followed this year's American election carefully, as the victor could majorly impact the relationship between Canada and the U.S. The differences between a democratic or republican candidate winning the election can heavily influence Canada. The 2020 presidential debates only emphasized how radically different Trump and Biden’s ideas for the future of America are and although Trump is still fighting to contest the results, with court cases in multiple states alleging voter fraud, Biden has claimed a victory. So what does this mean for us?
Over the past four-years, Trump has remodelled the trade relationship between Canada and the U.S. many times, most notably by renegotiating the North American Free Trade Agreement (NAFTA) as the U.S.-Mexico-Canada Agreement (USMCA). Since the implementation of NAFTA, U.S. and Mexican investment in Canada has tripled with U.S. investments in Canada increasing from $70 billion in 1993 to more than $368 billion in 2013. Despite also seeming to have an overall positive impact on the US economy as well (with most estimates concluding it increased U.S. gross domestic product (GDP) by nearly 0.5 percent, or an increase of several billion dollars per year), unhappiness from workers and labor leaders who blamed it for a loss in manufacturing jobs prompted Trump to replace the historic agreement with the USMCA, which he believes will benefit the US more at the risk of decreasing benefit to Canada and Mexico. He has also used Canada’s dependency on the U.S. for its exports (the U.S. accounts for 75% of Canada’s exports) to intimidate Canadian leaders into accepting trade deals, even going so far as to threaten to end Canada-U.S. free trade. Biden, however, focuses heavily on a plan that tightens and links Canadian manufacturing sectors. Although many tariff and trade disputes are likely to continue, Biden has said he plans to avoid confrontations with allies and wants to work with them to limit China’s overproduction of key goods such as steel and aluminum. Biden also wishes to renegotiate and possibly reimplement the Trans-Pacific Partnership, which was set to be the largest free trade deal in the world and cover 40% of the global economy before Trump withdrew in 2017. Implementation of the deal could be beneficial for Canada, as it is expected to increase and diversify our exports to hopefully make us less dependent on the U.S.
When it comes to immigration, Trump was adamant in making America less welcoming to potential immigrants looking to move. Studies conducted by the U.S. department of homeland security indicate that since Trump’s election, temporary working visas in the US have increased by 5%, while Student visas decreased by 2%, permanent residency visas decreased by 13% and refugee admission decreased a whopping 65%. In Canada, we have seen an increase in the number of skilled workers between 2017 and 2019, which many analysts suspect was due to Trump’s strict immigration policies, and for the first time history the number of refugees in Canada has exceeded the United States. Biden also has a more open stance when it comes to immigration. Biden has proposed a detailed plan for immigration which is expected to essentially reverse changes the Trump administration made to immigration policy, increasing the number of refugees and other immigrants accepted yearly, and expand how many high-skilled worker visas are given in America. If this happens, it is very possible that we see a corresponding decrease in the levels of immigration to Canada.
The stock market will also be influenced under Biden’s presidency, as he plans to increase the corporate tax rate to 28%, partially reversing the Trump-era corporate tax cut from 35% to 21%. While some analysts predict this could have a negative, destabilizing reaction on the recently recovering stock market, this change in tax rate is unlikely to be approved unless the Democrats also gain control of the Senate. With higher tax rates on people who make over $400,000, stocks may be negatively impacted. Stocks could also be influenced by new market regulations, including new rules with regards to green energy and how companies such as Google and Amazon will be affected. With strict clean energy rules, companies must invest in new green energy costs. While Trump significantly cut funding for climate research, Biden’s planned investment into clean energy could support the growth of a clean energy sector that could overall benefit the planet.
Finally, America’s political relationship with other countries is expected to improve, as Trump has earned the disdain of many democratic foreign countries and leaders throughout his presidency for his aggressive politics and right-leaning ideals. Considering Biden left the vice-presidential office four years ago wishing Trudeau luck in upholding the international liberal order, we can assume that he plans to work closely with our government and avoid confrontation when possible and return to the more liberal ideals shared by many of America’s allies. Conservatism in Canada may also become more widely accepted, without the shadow of Trumpian radical approaches creating suspicion of more conservative policies and leaders.
With Biden’s victory, America will see many big changes to the economy, trade, immigration and climate change research and, for better or worse, Canadians should expect to be right there with them.
Sources:
https://www.cnn.com/2020/11/09/politics/election-trump-court-push-claims/index.html
https://www.ctvnews.ca/world/america-votes/biden-won-what-does-that-mean-for-canada-1.5179155
https://www.cfr.org/backgrounder/what-trans-pacific-partnership-tpp
https://www.iheartradio.ca/cjad/news/biden-won-what-does-that-mean-for-canada-1.13905441
https://www.nationalobserver.com/2020/11/07/news/biden-harris-prevail-whats-it-mean-canada
