Since the US election there has been much consternation and hand-wringing over what Trump may or may not do as President. Little has been said about what Hillary was promising and the ruinous effects directly upon the US and indirectly Canada, whose economic prospects would have suffered collateral damages. Kevin Libin corrects that omission in his National Post article: Cheer up, Canada — President Donald Trump just might be good for you (here)
It’s still impossible to tell which of Trump’s often-wild promises he will actually keep, given how unpredictable he has demonstrated himself to be. But the risk with Clinton was always the opposite. It was her political determination. Had she been allowed to govern as she was resolved to, Canada would have paid the price for as long as eight more difficult years — probably more than they will under even a loose-cannon amateur like Trump. A president Hillary Clinton would have implemented policies that would have been sure to drag down the economic growth of an economy upon which Canada overwhelmingly relies for its own.
She has been unapologetic about her plan to increase taxes, promising to raise the estate tax and capital gains taxes (where she planned to hike the top rate from 23.8 to 43.4 per cent) and she had proposed to tax high-frequency stock-market trades. She had said she was open even to new payroll taxes, which would have injured American competitiveness yet further. And her campaign said she would “take a look at” a carbon tax, if Congress had proposed one. Congress, still firmly in the hands of the Republicans, will now entertain no such thing.
Throughout her campaign, Clinton also distinguished herself as the candidate of multiplying regulations to rein in Wall Street, and more spending on entitlements: Where Trump said only he would not cut social security, Clinton went further and said she would “expand it.” She showed no interest in tax relief for corporations or personal incomes, focusing instead on raising tax revenues, $1.4 trillion over 10 years, another trillion dollars the following decade, in an attempt to reduce inequality through redistributionist schemes.
All of these were growth-killing policies overlooked by Canadian pundits who prioritized their distaste for Trump’s vulgarity and jingoism over the prospect of a robust American economy that could help Canada enhance its own prosperity. The U.S. GDP has been growing at not much more than two per cent a year for over a decade, much to Canada’s economic detriment; under Clinton, that seemed bound to continue.
Will a Trump administration, as unhinged as some might fear it will be, prove more propitious for Canada? There is at least now some reason for optimism.
A Republican House and Senate are even more apt to stand firm for continued free trade with Canada than a Democratic Congress would have. And in the most probable scenario, if our exporters can maintain open trade with the U.S., Trump’s preference for economic growth looks far more likely to benefit Canada than Clinton’s preference for an expanded welfare state ever would have. It is too early yet to be certain whether these promising economic changes come to pass under Trump. But on Tuesday night, Canadians at least won some hope of finally escaping from the last 11 years of more muddling along, with our largest export market politically fated to remain underperforming and torpid.