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U.S. President-elect Donald Trump speaks at his election night rally in Manhattan, New York, U.S., November 9, 2016.

CARLO ALLEGRI/REUTERS

Canada's business community woke up after the U.S. presidential election next to a very different trading partner, leaving the country's corporate leaders grappling with what Donald Trump will mean for the Canadian economy.

Mr. Trump's decisive victory over Hillary Clinton "really caught people by surprise," said Mathew Wilson, senior vice-president at Canadian Manufacturers and Exporters. He spent much of the day on Wednesday talking with concerned members of his trade association about the implications of the Republican candidate's surprise win. "A lot of people today are scrambling a little bit to catch up."

The biggest issue hanging over the private sector is Mr. Trump's promise to renegotiate or tear up the North American free-trade agreement (NAFTA), Canada's most important trade pact. If he makes good on that pledge, it could throw Canada's critical export sector into a state of limbo and ring in a new era of U.S. protectionism.

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Economic insight: Trump's win is a worst-case scenario for Canada's economy

Read more: Ambassador says Canada is willing to discuss NAFTA with Trump

Read more: Trump's plan to reverse Obama's climate agenda a trial for Trudeau

On the other hand, Mr. Trump's position on energy – which is friendlier to fossil fuels than Ms. Clinton's platform was – may provide a lifeline for Canada's big energy sector, opening the door for controversial pipelines such as Keystone XL that would expand the market for Canadian-produced oil. His proposed tax cuts and infrastructure investments could provide a growth boost to the U.S. economy that would bring positive spinoffs to Canada, which relies on the U.S. market for fully three-quarter of its exports.

But given Mr. Trump's notorious unpredictability, many business leaders aren't sure what to expect from him and his campaign promises now that he's on his way to the White House.

"I'm as confused as most people over what the future of our good country looks like, relative to the future of our good neighbour," said Calgary entrepreneur and investment banker Brett Wilson.

"That's part of the problem: Tell me what he's going to do?" he said. "We have to live with the uncertainty that comes with him."

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Senior executives in the automotive sector are taking a wait-and-see attitude toward the election of a president prepared to rip up NAFTA, a deal that has led to a deep continental integration of their industry.

"The bottom line is, let's not panic, let's see what actual policy decisions are as Trump starts to put his plans together," said Linda Hasenfratz, president of Linamar Corp., Canada's second-largest auto parts maker. Some investors, however, did panic, selling off shares of Linamar, Magna International Inc. and Martinrea International Inc. All three companies have operations in Canada, the U.S. and Mexico.

NAFTA has allowed vehicles, engines, transmissions and parts to move across the Canada-U.S. and U.S.-Mexico borders essentially seamlessly, and manufacturing is set up to take advantage of the strengths of each country.

"We've planned our whole supply chain around it, so it's critical," General Motors of Canada Corp. president Stephen Carlisle said.

The average auto part crosses NAFTA borders seven times, Ms. Hasenfratz said, as they move from single components, to parts of larger subsystems, engines and transmissions, to installation in complete vehicles that are shipped across borders.

"Clearly, trying to tear that apart will add unnecessary cost to North American produced products, [which is] not good for North American consumers or North American competitiveness globally," she said.

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Mr. Trump had Mexico firmly in his sights during the campaign, castigating Ford Motor Co. for announcing it will shift production of small cars to that country, where wage costs are a fraction of those in the United States and Canada.

Former Canadian finance minister Michael Wilson, who helped negotiate Canada's bilateral free trade agreement with the United States in the 1980s that served as the forerunner for NAFTA, suggested that Mr. Trump's bark about the trade deal might prove worse than his bite when political realities set in.

"When you get into the seat, it's an awful lot different. He's going to have a lot of difficult choices. And some of them are going to have to be compromises." the chairman of Barclays Canada said.

While he acknowledged that a wholesale rewriting of NAFTA could get very messy and disruptive, he pointed to Bill Clinton's 1992 presidential win for a possible solution. Mr. Clinton had campaigned on a promise that he would demand changes to the deal, but the partners were able to address his concerns by creating two side deals on labour and the environment.

Similarly, Barclayas' Mr. Wilson suggested, Mr. Trump's campaign promises could possibly be met "without re-opening the negotiations."

One thing that is clear is that the election result will create uncertainty, said Bill Hammond, chief executive officer of Guelph, Ont.-based Hammond Power Solutions Inc., which makes electrical transformers for industrial clients around the world. The firm has plants in Canada, the United States and Mexico.

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"I'm not certain whether President Trump can turn his election rhetoric into concrete policies that will impact our Canadian and Mexican operations," Mr. Hammond said. " But … generally speaking, companies are hesitant to expand investment in uncertain times, so I believe that the current slow economic conditions will continue into 2017."

Amid all of the uncertainty, National Bank of Canada chief executive officer Louis Vachon advocated keeping a level head.

"We're a bank, not a hedge fund. We're not betting on one particular election," he said, adding that Canada's banks work hard to prepare for the potential for chaos and to think long-term. If business leaders worry too much about short-term political shifts, "you'll stay in your basement with your food and your gun and you won't invest."

Billionaire Canadian mining magnate and philanthropist Seymour Schulich, for one, sees opportunities for Canadian business in Mr. Trump's arrival.

"We will get the Keystone pipeline built," he said of the pipeline extension to ship Alberta oil sands production to Gulf of Mexico refineries. The project has been bogged down for years by White House indecision.

"I think this guy understands business. He is going lower the tax," Mr. Schulich said. "He knows what makes the world go around."

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Mr. Vachon said that Mr. Trump's pledge to cut taxes, and the fiscal stimulus that would result, were already resonating positively in the markets the day after the election.

Ms. Hasenfratz suggested that Canada could benefit if Mr. Trump sticks to the protectionist rhetoric that helped him win the election, while Canada continues to opens its borders to trade with other countries. She noted, for example, that her company's Skyjack construction lifts will be shipped to Europe duty-free under the Canada-Europe free-trade deal, while competing U.S. products will face tariffs in Europe if there is no U.S.-Europe agreement.

With files from Richard Blackwell, Tim Kiladze and Rachelle Younglai

Executive reaction

George Schindler, CEO of CGI Group Inc., Montreal:

"I always say that there's a natural cycle of government. And every four or eight years the administration is going to change. More and more with that change, there's opportunities that are driven because any new priority for a new administration, whatever that administration might be, does drive some changes that require technology in today's world. And so there are opportunities."

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Michael Litt, CEO of Vidyard, Kitchener, Ont.:

"If Trump would make it more difficult to immigrate into the U.S., as we make it easier, I think there's a competitive advantage for Canadian companies who sell in the U.S. It does create a pretty significant opportunity for companies north of the border if we're no longer competing on an immigration perspective with the U.S."

Kurtis McBride, CEO of Miovision Technologies Inc., Waterloo, Ont.:

"As a technology guy, my industry is responsible for making the world better, and also changing the world, and sometimes that change results in tough outcomes for people. What this [election result] is showing us, is we can't leave people behind in a democracy. The policy makers need to lead the way. Otherwise, the electorate will."

Brett Wilson, chairman of Prairie Merchant Corp., Calgary:

"It was such vicious, vitriolic, divisive politics … And as it turns out, [the popular vote] was divided 50/50, there's no overwhelming majority. It could become 'the four years of our discontent' for the U.S. And when the U.S. has a cold, we sometimes get the flu – we sometimes get sideswiped by our major trading partner, who's now throwing questions in the air."

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