For those fretting about how the U.S. election turmoil will affect the Canadian economy, take heart in a few numbers.
In September, 97,114 trucks full of stuff rumbled over the Canada-U.S. border at Detroit.
That’s nearly a miracle, because in September 2019 — when COVID-19 was still a Hollywood conjecture, when the border was completely open to people, services and merchandise, and when we’d finally just put into force a solid trade deal with Donald Trump — that same border crossing actually saw 849 fewer trucks full of stuff going back and forth.
Let’s not ignore the fact that the last four years of doing business with the United States has been rife with risk, or that the last eight months of pandemic have been a near-death experience for many businesses. Since Trump took power in January 2016, it has been one problem after another for Canada’s cross-border relations — NAFTA negotiations, tariffs, unpredictable “Buy American” policies, antagonism.
The pandemic has exacerbated the perpetual crisis exponentially. Election jitters compounded it further.
And yet, Canadians generally persevere.
Yes, consumers see some annoying shortages of baking supplies, some localized spikes in prices, and some scrambling to find parts and labour to adapt to new realities. And some public-facing sectors see a bleak future until a COVID-19 vaccine is found.
But at an economywide level, exporters seem to be muddling through.
Exports dropped off a cliff in the spring when the world shut down, and Canadian sales to the United States even more so. But by July, trade traffic across the Windsor-Detroit border was almost at normal levels again. By the end of the summer, five of 11 sectors had recovered and then some, operating at above pre-pandemic levels, according to an analysis from Export Development Canada.
EDC forecasts that exports will be down about 16 per cent this year — which is awful, but not as bad as initially projected, and certainly not as bad as the global financial crisis in 2009.
This isn’t a story about luck, or the world clamouring for Canada’s wonderful goods and services. It’s a story of hard work — constant repositioning, re-establishing supply chains, adapting digital technology, and making do with subpar conditions just to tread water.
Governments have continually renegotiated U.S. border conditions to allow for trade to continue, and have dedicated officials to work with Canadian companies in other countries to re-establish fractured supply chains. And manufacturers and businesses of all kinds have pivoted to support the pandemic battle, and then pivoted back again as the economy opens up in fits and starts.
Exhausting on all sides.
For sure, in the case of travel, tourism and transport, it’s been a disaster.
But against all odds, that’s not the case for the auto sector. An analysis done by economists at Global Affairs found that most sectors in Canada are vulnerable to trade disruption in one form or another, but none more than the auto sector that so dominates Ontario’s economy. Trump’s tariffs on steel and aluminum hit the sector hard, and his threats are constantly hanging over the industry despite protections in the new NAFTA. When the pandemic hit, production in some plants shut down.
But they’re climbing their way back, says Brian Kingston, president of the Canadian Vehicle Manufactures’ Association. Some manufacturers switched to producing pandemic gear, and others are now seeing adequate supplies coming through to meet demand. People are buying cars again, slowly but surely.
“Overall, we’re pretty resilient,” Kingston says.
It’s far from perfect. Companies are having trouble sending their people across the border to service U.S. operations, even if their skills are needed to keep trade flowing, says international trade specialist Mark Agnew at the Canadian Chamber of Commerce.
And there’s no one who thinks the protectionism championed by Trump belongs to him alone. It’s here to stay, prompting investors to think twice before they sink money into Canada for global production, says Dennis Darby, president of Canadian Manufacturers and Exporters. That’s a policy challenge and a corporate challenge alike, regardless of how U.S. politics takes shape over the next few months.
But first, we need to showcase our competitive advantage. As a country of exporters, we are reliable and resilient. In the face of protectionism, global trade battles, unpredictable leaders and pandemics, we keep on trucking.
https://www.thestar.com/politics/political-opinion/2020/11/03/canadas-economy-has-weathered-a-pandemic-and-an-unpredictable-president-it-can-handle-some-post-election-chaos.html
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