After having put up with seemingly endless months of political showmanship and campaigning, our American neighbours will finally vote next Tuesday for who they’d like as president. It’s an enormous decision for undecided voters, and, if polls can be trusted, the election could be extremely close. Few crystal ball gazers are yet willing to make a solid prediction of which man will win: the incumbent Barack Obama, or the challenger Mitt Romney.
A lot hangs in the balance of the Nov. 6 vote, especially for Americans. But the results of the election will have some implications in Canada and Alberta, as well.
Is it possible to gauge which candidate would be better for Alberta’s economy?
On the surface, Mr. Romney has taken a much friendlier and conciliatory position with respect to America’s need for Canadian oil. From the early stages of the Keystone XL pipeline proposal—which would carry Alberta bitumen to refineries and ports on the U.S. Gulf Coast—Romney has favoured the project. He even suggested that approving the project would be the first thing he would do as president (although, given the current state of affairs in that country, he could be forgiven if it was only the second or third thing he did.)
President Obama was decidedly less in favour of the pipeline project. Bowing to enormous political and social pressures at the time, he delayed the project late last year. However, by early 2012 he did give his blessing to the construction of the southern leg. That was taken as a general signal that his opposition to the project had weakened. He is, after all, a realist. And he knows that if America is to wean itself off Middle Eastern oil, the Keystone XL pipeline must proceed.
Some would suggest that Mr. Romney and his Republican party are more “free enterprise” and, thereby, conclude that with him in office, the U.S. economy would do better. There is scant historic evidence to suggest the economy does any better or any worse with a politically right-wing president (although some evidence suggests the stock markets perform better). And while Republicans may favour free enterprise, they are generally not free traders. Mr. Romney has made all sorts of remarks signalling that he’d get tough on China’s trading and currency practices. If a Republican-led administration starts slapping up import barriers against its trading partners, Canada could very easily be collateral damage. More so than Democrats, the Republicans strongly support a position of defending American jobs above all else.
That could pose all sorts of risks for Canadian and Alberta industries that rely on exports to the U.S. Under a Republican presidency, Washington may not restrict oil, but it is very possible it would target products, including steel, manufactured goods, lumber, wheat and beef. It was bad enough under President Obama and his “Buy America’ policies a few years ago. It could be worse with the Republicans calling the shots.
Neither of the two presidential candidates has clearly defined his plan to get Americans back to work, which, arguably, would be the very best medicine for the Canadian economy. But, perhaps, both could be forgiven for being short on details. After all, there is no magic wand to wave that would place millions of unemployed Americans back into jobs. If such a wand existed, it would have been used already.
On balance, though, there is unlikely to be much of a shift in the economy after Tuesday night’s election—either in the U.S. or in Canada. But regardless of Tuesday night’s winner, the real challenge for America’s politicians will be to set aside partisan differences and work together in Congress. Under current binding legislation, the so-called “fiscal cliff” of major tax increases and spending cuts will automatically kick in after January. The only way around that fiscal cliff is for the president—whoever he is—to work cooperatively with Congress—whoever they are—and arrive at a compromise.
If no compromise is reached, there will be no new fiscal arrangement. And with no fiscal arrangement, the fiscal cliff will loom unavoidably. That would almost certainly push the U.S. back into recession, and you know who would be dragged down with them. (Oh! Canada!)