The Wildcard

So far this week, two notable speeches about the economic outlook for Alberta have been given. The first was by Todd Hirsch and the second was by Brad Ferguson.  Neither of them were too optimistic but Todd Hirsch mentioned something in particular: the political wildcards.

Obviously, our geographic proximity to the United States gives us Trump.  While campaigning, Trump claimed he wanted to get a better deal for the U.S. out of NAFTA but what would that mean for Canada?  Trump is a businessman.  So if we focus on the business, we see these numbers for Canada:

"U.S. goods and services trade with Canada totaled an estimated $662.7 billion in 2015. Exports were $337.3 billion; imports were $325.4 billion. The U.S. goods and services trade surplus with Canada was $11.9 billion in 2015." 

 And these for Mexico:

"U.S. goods and services trade with Mexico totaled an estimated $583.6 billion in 2015. Exports were $267.2 billion; imports were $316.4 billion. The U.S. goods and services trade deficit with Mexico was -$49.2 billion in 2015." 

 The U.S. spends more money in Mexico than Mexico spends in the U.S.  The opposite is true in Canada.  Does this mean we can relax?  Probably not and here's why; if the U.S. were to greatly reduce their imports from Canada, the Canadian economy would plummet. Canada can't just hope for the best with that level of risk. On the other hand, if Trump follows through with his punitive efforts against Mexico, Canada could become the only nation in the world with direct access (and possibly still free trade?) to the United States.

Essentially, Trump has the power, literally, to make or break the Canadian economy.  So how can Alberta help?  Hirsch and Ferguson both pointed to entrepreneurs and Hirsch punctuated his speech with a story about wallpaper cleaner (it gets better).  In the 1930's, Noah McVicker started a soap business.  When tough times hit, they managed to repurpose the soap into a wallpaper cleaner.  Technological advances in natural gas heating (rather than coal) and vinyl wallpaper brought the company near forcible closure again and they managed to repurpose their product a third time; into Play-Doh.  The moral of the story is that Alberta's economy does not have to go down when tough times arrive; we might just need to repurpose our focus to meet the changing needs.

D.