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Trump presidency puts business on collision course with Canadian government and citizens

Donald Trump has made a huge impression on the leaders of the Canadian business community. He is seen as a dramatic change agent, for good and for bad.

Unfortunately, Canadian business expects the good to be largely for the United States and the bad largely for Canada. The C-Suite believes Mr. Trump's policies will be strongly supportive of business growth. The political environment for business in America is seen as vastly better than it was pre-election. As a result, Canadian business leaders think the U.S. economy has its best growth prospects in a decade.

This is not because president-elect Trump is expected to govern differently than he pledged to do in the campaign. On the contrary, business leaders think he was dead serious about his promises. Led by the expected approval of the Keystone XL pipeline, oil patch executives see him as very pro-fossil-fuel development. That beleaguered sector of the Canadian economy is becoming more bullish.

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More ominously, there is a consensus that Mr. Trump will follow through on his promise to make significant changes to NAFTA. While executives do not think Canada is the main target of his changes, there is widespread concern it will emerge from this with more restricted access to the U.S. market. With the heavy reliance Canadian companies have on the United States and with expectations the U.S. economy is going to be strong, maintaining that access is business's primary demand from the Trudeau government.

This sets up a couple of collision courses for business. One is with the Canadian government. Executives think the policy environment for business in the United States will now be better than it is in Canada. The Canadian government is trying to balance interests – social equity and the environment on the one hand, and economic performance on the other. Many businesses want to be unshackled in response to what Mr. Trump is planning for American business. This immediately conflicts with climate-change policy. Fully half of the C-Suite and the large majority of oil and gas executives believe Canada should water down its plans to fight climate change now that the Republicans control the U.S. government. It has always been the strong belief of the Canadian business community that Canadian climate policy could not, for reasons of competitiveness, differ greatly from American policy.

The other collision course is with Canadians. Polling among Canadians has shown a dislike of Mr. Trump and belief that his policies are wrong-headed. They do not share the seeming enthusiasm business leaders have for him. In this era of populism and working-class discontent, there is less conviction than normal that the interests of business and of the citizens are aligned. A business community championing Mr. Trump's approach could find itself significantly offside with public opinion.

David Herle is Principal at the Gandalf Group Inc.

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