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Canadians can expect ‘a powerful economic surge’ globally in second half of 2021: Frum

Don Procter
Canadians can expect ‘a powerful economic surge’ globally in second half of 2021: Frum

The U.S. is poised for a surge in economic activity in the second half of this year under a national government administration that presents “a more normal U.S./Canada relationship” after the divisive Donald Trump years.

But that does not mean it is smooth sailing ahead for Canada and many industries here, including construction, said political pundit David Frum, a keynote speaker at the Ontario Construction Secretariat’s 2021 State of the Industry and Outlook Conference.

Among issues that divide the two countries is trade, in part because of the U.S.’s protectionist mindset, Frum, a senior editor for The Atlantic Monthly, said.

He told viewers to the OCS conference while Canada can expect carve-outs on many of the Buy American provisions on government contracts, the U.S. is less apt to trade as openly as previous Democratic administrations such as Barack Obama’s did.

Frum added supply chains could be managed differently, affecting cross-border trade.

Trade is complex, Frum said, pointing out the Joe Biden government could preserve some of Trump’s trade measures against China.

Could that have an impact on products from Canada with Chinese parts?

When the world returns to normal after the pandemic, he said it is uncertain if things will go back to globalization (global trade), or shift to deglobalizaton or possibly to slowbalization, a period where world trade grows slower than world output.

Another point of contention between Canada and the U.S. will be over the oil and gas industry. The political ideals of the new U.S. administration, which is pushing for a transition to green energies, do not mesh with Canada, a petroleum exporter, Frum said.

The Keystone XL cancellation “is an example of the kind of divergence” expected between U.S. and Canadian energy policies over the next four years.

“There will be friction,” he told the OCS audience.

Frum said the U.S. is on its way to “a colossal economic program” with $1.9 trillion in expenditures planned.

With many American industries reopening their doors or expanding, the need for labour from outside its borders will soar, putting the U.S. in direct competition with Canada for immigrants, particularly from pandemic-ravaged Latin and South American countries.

He told the OCS audience while the new U.S. administration has moderate leanings, Canadians should be aware that political extremism, both right and left, will continue to have sway in many states at least until life returns to normal.

Frum said Canada could also feel the impact of inflation from the U.S. as food and other costs including wages there rise.

There is a push in many states and cities for a $15 minimum wage and also a drive in parts of the country to unionization, he pointed out, noting Biden is a staunch union supporter.

Driven by the vaccination rollout, led by Great Britain, the U.S. and Israel, Frum said in the second half of 2021 the world will see “a spectacular global reopening, a powerful economic surge.

“We are on our way to having the biggest global street party since the fall of the Berlin Wall.”

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