U.S. Midterm Elections Impact on Canadian Businesses

Canadian citizens who thought the political and economic mayhem in the US had hit a climax may be in for a shock after the midterm elections.

No one can predict the outcome until the last vote is counted, but there’s mounting evidence that President Trump’s Republican Party may lose control of the House to Democrats.

While anti-Trump Canadians may be pleased by this outlook, a bunch of Canadian policy experts warns that a Democratic-ruled House of Representatives may not necessarily improve conditions for Canadian merchant account holders and their economy as a whole.

And even if somehow Republicans retain control of both the Senate and the House, the increasing conflict of ideas stirred up by the harsh campaigns could lead to lasting differences that will continue to trouble U.S-Canada economic relations.

Conflict of ideologies

A clash of ideas may arise if Democrats take control of the arm that passes laws — the House of Reps — because they will be directly opposing the Republican executive arm which rules the country and ensures law enforcement.

According to Michael Hart, a former trade negotiator for Canada, there would be little, or no chance of compromise between the two divisions in the event that outcome materializes, and the Democratic Party runs the House of Reps, and Trump’s Republican Party controls the Senate.

There are no centrist legislators

Hart says Canadians should prepare for another budget stalemate, and with the huge deficit, and the idea of cutting down spending on social services to balance the accounts, there won’t be enough room to wheedle centrist Democrats aboard with new bank-breaking initiatives, like the debatable middle-class tax cuts.

“There may be a few centrist legislators, but none is willing to admit it,” says Hart, who feels Democrats are out for a battle.

“If Congress goes Democratic and they choose Nancy Pelosi once more, we have someone who,” Hart sighs, “lacks wisdom.”

Canadian Oil and Gas projects at risk

Environmental matters may also affect Canadian business, according to Bessma Momani, a Financial and Foreign Policy Specialist.

A Democratic House and the environmentally conscious body of voters may lead a fight against ongoing Canadian gas and oil projects, like the oilsands and pipelines, e.g. Keystone necessary to supply Canadian oil to markets.

Momani warns that there could be a risk here too. While many Canadians advocate for environmentalism and would support climate change strategies, most of them wouldn’t want to see an essential part of the economy tampered with without a proper plan.


It seems like the only positive outcome Canada would enjoy from a Democratic majority is that might it help smooth out the growing US-China trade conflict which is one of the main threats to Canada’s economy according to Stephen Poloz, the governor for Bank of Canada governor.

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