Roughly 40 days before Election Day in the U.S., the spectre of a possible Trump presidency is driving record numbers of inquiries among nervous Americans about moving to Canada—but a recent report by RBC Capital Markets assured that the fiery tycoon’s victory will not necessarily be a negative for the Canadian economy.
Contrary to what seems to be shaping up as an isolationist policy, Trump’s regime would overall be a ‘net positive’ for Canadian stocks and economic strength—at least for a while, CTV News
“Our view is that contrary to what some may believe, Mr. Trump's policies, if adopted (in part or in full), would not be negative for Canada and Canadian stocks,” RBC Capital Markets equity strategist Matthew Barasch stated.
Among the policy proposals forwarded by Trump are greater infrastructure spending and lower tax rates, which Barasch argued would galvanize U.S. economic activity that will have a “fairly meaningful” impact on the Canadian financial system.
Should Trump win the presidency, expect the energy, materials, financial, and technology sectors to benefit the most. In particular, his promise to revive the Keystone XL pipeline would be an incomparable boon to Canada’s beleaguered energy segment, Barasch said.
“It’s an important issue for Canada. It would help differentials in this country. It would help price realizations in this country,” Barasch wrote in the RBC report.
However, Barasch cautioned that the most beneficial effects of a Trump presidency (such as the added spending and the tax cuts) would require congressional approval, while the policies most harmful to Canada (such as trade) would be well within reach of Trump’s powers as an executive.
Among the most at-risk sectors in Canada would be telecommunications, utilities, industrial production, and real estate investment trusts, Barasch said.
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