Canada’s economic performance relies heavily on growth in the US, but growth has been muted at best for the last few years. The recession has changed the landscape of economic performance, and the countries with impressive growth are emerging markets around the world. In contrast, the US economy has been struggling to find its footing, and Canada has gone through much of the slump with its neighbours.
Warring Democrats and Republicans have prevented any plans to improve the US economy from being implemented, and the election could yield yet another divided government. If this happens, tax hikes and budget cuts expected at the beginning of 2013 could result in economic contraction without a new plan. Canada could lose value for exports, and recede back into recession as well.
Canada needs a US government that is willing to work on the future, and agree on how to get there. If another recession begins, it means Canadians will lose money. A decline in business with the US means Canadian companies are making less money, as a result of the entwined relationship. Lost business trickles down to affect workers and families, who could struggle with maintaining their jobs and homes.
Few elections are as important to the world as the US election, and Canada will always be invested in the outcome. Paul Taylor, Chief Investment Officer with BMO Asset Management, sums up feelings from Canada. “From a Canadian perspective, we just want to see it work.”