Experts say the ongoing trade war with the United States means Canada’s economic future is uncertain — but Newfoundland and Labrador’s unique position to the ocean and new energy projects is cause for some optimism.
During his visit to St. John’s last month, Governor of the Bank of Canada Tiff Macklem said N.L. has a pretty big advantage over other the provinces when it comes to trade.
By being on the ocean, N.L. is able to ship goods at a lower cost, he said, “But you still had to find those new markets, you still had to develop those buyers, develop those relationships.”
“I think… Newfoundland and Labrador has done a very good job in that,” Macklem said.
He also said that N.L. is being less affected by U.S. tariffs due to its diversified trade.
If Canada invests more in east-west transportation and removes internal trade barriers, he said it will make it easier to export Canadian goods from N.L’s ports and therefore develop more markets.
“That would be a benefit to the country,” Macklem said.
The Conference Board of Canada’s principal economist Richard Forbes said there is still a lot of uncertainty surrounding the province’s economy, and the near-term economic outlook is looking weak.
Although the province has seen population growth recently, Forbes said the population is projected to decline over the next few years with the new federal government immigration targets.
“With less workers and an older population, there’s more strain on the health-care system and also less revenue coming in with people spending less than they were when they’re a little bit younger,” he said.
On the other hand, Forbes said the province is doing very well in terms of investment into the energy sector, including oil and gas projects and the emerging wind-hydrogen sector.
Forbes also said there are positive outlooks for the province’s traditional industries, like the fishery.
“It’s a little bit of a mixed bag for the province as a whole, but there’s some optimism there for sure,” he said.
In regards to the new Churchill Falls deal, Forbes says government revenues will be boosted by approximately $1-billion a year.
“So that’ll kind of offset some of these pressures,” he said.
While the trade war might be making some things more expensive, Forbes says the buy local trend might also be a good thing for the economy.
Late last week U.S. President Donald Trump abruptly broke off trade talks, citing Canada’s digital services tax. Soon after Ottawa rescinded the tax and discussions between the two countrie’s resumed on Monday.
“We can’t reduce our reliance on the U.S. overnight. We know we’re very close trading partners with them,” said Forbes.
“But if all the households, all the businesses come together and try to look internally, [that] will certainly help to soften the impact.”
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