I regret to inform you, dear readers, that you must begin to prepare yourself intellectually, and emotionally, for the real possibility that our neighbors to the South will elect Donald Trump on November 5. There is a scenario where he could win by cheating. If the calculation of a majority of electors rests on Georgia, its henchmen have organized themselves to be able to refuse to certify the election in this state, and therefore force Congress to note that there is no winner. In this case, the Constitution provides a plan B: the president is elected by a majority of the states represented in the House of Representatives, which will give victory to Trump – even if the majority of seats are occupied by Democrats. This is because we count by state, not by seat.
I want you to also include the real possibility that Trump wins without cheating. Let him get enough votes in the swing states to be declared the winner on election night. I judged that you would need reasonable notice. It’s in 38 days.
We obviously cannot predict everything, but the commitments made by candidate Trump could have significant and immediate consequences, even before he is sworn in next January.
A large influx of asylum seekers. Trump has repeatedly pledged to carry out “the largest deportation program in the history of the country.” He mainly talks about illegal immigrants. Officially, there are around 12 million, installed cumulatively over decades. Most of them have jobs and children.
How many does he want to expel? He speaks of “hundreds of thousands” and also targets immigrants who are legally welcomed in the United States under an emergency procedure, which affects nearly half a million Haitians, notably the 15,000 from Springfield, in Ohio, which Trump promises to expel as a priority. (Unsure of their exact provenance, he threatened to send them to Venezuela.)
Implementation of this program will take a long time and will be challenged in court. But we can expect that tens of thousands of these migrants will not wait for immigration agents to round them up and will pack their bags immediately after Trump’s election. Their most logical destination is obviously Canada and, for the approximately 500,000 Haitians, Quebec.
The fall in the value of the Canadian dollar. Since Trump has promised to impose a 20% tariff on all imports, including Canadian ones, the markets will not wait for the measure to be adopted before reacting. They call it “discounting.” So “it is clear that initially, the value of the Canadian dollar,” economist Pierre Fortin told me, using a somewhat technical term, “would take a major hit.” The markets would expect that this surcharge on our exports will harm our entire economy, and therefore the value of our dollar.
This fall in the currency would have several effects. If the fall was 20%, it would restore the competitiveness of our products, taxed at 20%. However, all our imports of American products would cost us 20% more, which would significantly boost inflation here. Our central bank would like to tighten credit, and we could say goodbye to falling mortgage interest rates. American tourists will be able to come visit us at bargain prices, but our Snowbirds will have to tighten their belts.
Obviously, the American business class is opposed to this tariff proposal, which would provoke a trade war. It is risky to count on a change in Trump’s position. He continues to believe that tariffs are paid by foreign producers, which is false, rather than by American consumers, which is true. He even floated the idea of abolishing the personal income tax, which brings in $2.2 trillion to the U.S. Treasury, and offsetting that loss with revenue generated by the tariffs, the total sum of which is $0.
A fiscal straitjacket. Our ability to adopt a reasonable tax rate for our businesses (and our millionaires) depends on the rates imposed by our neighbor to the South. When we combine federal and state taxes – and those of the provinces – the current overall rate on business profits here and here is equivalent. But Trump has pledged to cut his federal rate from 21% to 15%. Which will force Ottawa and the provinces to do the same. And to deprive yourself of income.
To something bad is good. Trump’s policies will also save us a lot of money.
Less money for Northvolt. The sums promised by Ottawa and Quebec to Northvolt and other battery producers are directly – and contractually – linked to the generosity shown by the Biden government. Trump has vowed to end the entire US green energy aid program. It will be a boon for our finances.
Less money for Ukraine. Since the Russian invasion of Ukraine, Canada has paid, or committed to paying, $4.5 billion. Since Trump swears to “resolve the conflict in 24 hours” and even before being inaugurated president, Ottawa will be able to turn off the tap. We obviously think that Trump will propose that Putin keeps the Ukrainian territory that he has already conquered. Ukrainian President Zelensky may protest, but the end of American military support, essential to the continuation of the war, will force him to raise the white flag. Since the Europeans cannot compensate for the withdrawal of American aid, everyone will be able to breathe, while waiting to know which country Putin will invade next. (I’m betting on the Baltics.)
Less money for the environment. Since Trump will withdraw (again!) from the Paris Agreement, and cancel almost all American environmental budgets, this will have a ripple effect on other polluting states. A future Prime Minister Poilievre will be completely justified in doing as little as Trump, in the name of Canadian competitiveness. Well, the planet will warm up even faster, but we’re starting to get used to it, right?