Who needs October playoff baseball when you have the U.S. election? Our beloved Toronto Blue Jays may be in the middle of a playoff race, but a lot of us seem to be captivated by the U.S. presidential election. On Monday we had our first of three presidential debates. The jury’s still out on who won, but that didn’t stop the Donald from continuing to make up his own facts.

Canadians are watching the U.S. election closely and with good reason. Canada has a lot at stake in the presidential election. Let’s take a look at what President Clinton or President Trump would mean for Canada’s economy.

undefined

What a Clinton Presidency Would Mean for Canada

Considering Canada is the U.S.’s largest trading partner (Canada and the U.S. exchanged $2.4 billion in goods and services every day in 2014, according to the Government of Canada), anything that impedes free trade could have serious consequences for the Canadian economy. The North American Free Trade Agreement (NAFTA) has been a hot-button issue during the U.S. presidential election. Hillary Clinton used to be a champion of NAFTA (her husband, former President Bill Clinton, signed NAFTA into law in 1993), but she has recently changed her tune. (Although, if there’s a saving grace, it’s that President Barack Obama was opposed to NAFTA when he ran for president, but didn’t end up renegotiating it.)

Clinton’s lack of support for NAFTA is concerning for the Canadian economy to say the least. The Canadian economy is predicted to grow at 2.1 per cent in 2017, according to the OECD. Any changes to NAFTA could lead to lower GDP growth for 2017 and beyond. This highlights the importance of Canada better diversifying its economy by not relying on the U.S. so much and signing other free trade agreements like the Trans-Pacific Partnership (TPP). That being said, the anti-trade sentiments and rise in protectionism expressed by the world’s biggest economies, such as the U.S. and the U.K. with Brexit, could have serious consequences on world trade.

via GIPHY

What a Trump Presidency Would Mean for Canada

While Clinton has been wishy-washy on her position on trade, Republican presidential candidate Donald J. Trump has been crystal clear: he opposes it. The Donald has been highly critical of NAFTA, referring to it as a “poorly-negotiated trade deal,” blaming it for the U.S. trade deficit.

“I like free trade, but free trade is not free trade, it’s dump trade because we lose with China, we lose with Mexico, we lose with Japan and Vietnam and every single country that we deal with,” said Trump in a campaign stop in Rochester, New York, in April. He went on to mention Canada: “We lose with Canada --- big-league. Tremendous, tremendous trade deficits with Canada.”

Despite economists presenting facts that free trade leads to a higher standard of living for everyone, the Donald doesn’t see it that way. Trump has called out NAFTA on several occasions, promising to “renegotiate” or “break” it if he’s elected president. Trump isn’t a big fan of the TPP either, calling it a “bad deal” for America that’s sending jobs overseas. (The TPP is essentially dead in the water for Canada if the U.S. doesn’t end up signing on, which is a distinct possibility at this point.)

undefined

How Will the Election Play Out?

With election day, November 8, 2016, quickly approaching, it will be interesting to see how the election plays out. The election has already impacted investors. The Fed has decided to leave interest rates where they are for the time being to see how it plays out. If the Fed decides to hike rates in December, it could lead to a lower loonie, which could hurt Canadian investors if the Bank of Canada Leaves interest rates where they are. Circle election day on your calendar if you haven’t already – this is likely to be the most exciting campaign to date.