US Election
Explainer
Provides context or background, definition and detail on a specific topic.

Whoever gets in, the US election will have an impact on the CRD

A sector-by-sector analysis shows how a Trump presidency could steer the region far from its status quo

US Election
Explainer
Provides context or background, definition and detail on a specific topic.

Whoever gets in, the US election will have an impact on the CRD

A sector-by-sector analysis shows how a Trump presidency could steer the region far from its status quo

As of early this morning, the election was too close to call. Photo: Shutterstock
As of early this morning, the election was too close to call. Photo: Shutterstock
US Election
Explainer
Provides context or background, definition and detail on a specific topic.

Whoever gets in, the US election will have an impact on the CRD

A sector-by-sector analysis shows how a Trump presidency could steer the region far from its status quo

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Whoever gets in, the US election will have an impact on the CRD
As of early this morning, the election was too close to call. Photo: Shutterstock

Very few people will be able to vote in it, but dollars to donuts, many people across the CRD  have had their eyes on the American election. No matter who wins, the economic and trade policies of the next and 47th US president will impact life on the Island. From culture to immigration, to trade, the outcome n will be felt—but the effects of that impact will be less or more, depending on who wins.

BC’s economy is closely tied to our southern neighbour’s, supported, in part, by the Canada-United States-Mexico Agreement (CUSMA). CUSMA came into effect in 2020, replacing the North American Free Trade Agreement. In 2022, the US was BC’s primary export destination. That year, it received 57% of this province’s commodity exports to the tune of $37.4 billion in total export value. Tuesday’s election may change the face of our trade relationship. If  Donald Trump wins, those changes may be significant in ways we cannot yet imagine.

BNN Bloomberg reported that a Trump global 10% trade tariff—he’s pledged to slap such a tariff on a plethora of US imports—could cause the GDP in Canada to drop 2.4 percentage points over the first two years. It’s assumed the tariff would be eliminated once the United States-Mexico-Canada (USMCA) agreement is extended in 2027 but in the interim, it could be quite damaging for BC exporters. Bloomberg also thinks a Harris win would not likely have a material impact on the baseline Canadian economy.

In March 2023, Prime Minister Justin Trudeau and US President Joe Biden issued a joint statement recommitting to the Roadmap for a Renewed Canada-US. Partnership and outlined their plans for the two countries to accelerate the clean energy transition, strengthen North American fuel and critical minerals supply chains, protect shared waters and the Arctic, and advance diversity and inclusion. A sector-by-sector breakdown puts into perspective what is at stake in this election, should that line of goodwill and partnership be broken.

Wood products: The US  lumber market is huge. It’s BC’s largest market for lumber and value-added wood products. Mass timber products are in increasing demand south of the border as builders seek alternatives to regular building operations due to increased costs and resourcing challenges. We’re not likely to get any breaks regardless of who gets in. In 2017, Trump affixed a 27% tariff on softwood lumber. In August, Biden increased the duty on softwood lumber to 14.4% from 8%. At the time of that announcement, Bruce Ralston, BC’s forestry minister,  said, “I am immensely disappointed with the U.S. Department of Commerce's decision to increase unfair and unwarranted softwood lumber duties.”

It’s hard to say where those tariffs will land under either Harris or Trump.

The Tyee has reported that Canfor and other BC sector giants have been selling the bulk of their products there for decades. Recently, Canfor and other forestry giants, including West Fraser, Interfor, and Teal-Jones (think Fairy Creek watershed) have been looking to invest in the southern US because second- and third-growth plantation pines grow faster there and are far cheaper to log, process, and transport.

Minerals: BC firms exporting critical minerals vital for the advanced manufacturing and tech sectors will likely continue to find opportunities in the US. In March, Biden’s Pentagon was promising Canada could apply to a fund of $ 250 million in cash to producers of critical minerals. NorthIsle Copper and Gold may be one of those beneficiaries under a Democrat administration. Under Harris, BC mining companies working in the green mining and clean tech space will continue to find partners in major US. mining companies that are facing increasing pressure to reduce their impact on the environment and engage in sustainable exploration practices. After cutting its budget dramatically during his first term, Trump has promised to dismantle the Environmental Protection Agency, opening the floodgates to mineral exploration in previously protected areas.

Electricity: Trade in this commodity between the US and BC is a two-way street. In 2023, 16% of the total electricity demand in BC was imported, owing in great part to an ongoing drought and the impacts of climate change. Luckily for Canada though, export prices of electricity to the US from BC are higher than import prices. They were negotiated largely by Powerex—-a subsidiary of BC Hydro—that manages and trades with customers through the Western Electric Coordinating Council (WECC).  

In 2023, BC electricity export prices sat around $168/MWh (megawatt hour) and import prices around $92/MWh giving the value advantage to BC. The tables turned that year when BC  began importing electricity from California, which translated into what one researcher has calculated as a $400million dollar loss against its $1B profits the previous year .

Automotive: The US dominates our regional vehicle market. Roughly 35% of all car imports into BC are American-made.  Japan manufactures 18% of cars on BC roads. In June, Canada hit Chinese electric vehicle makers with a 100% surtax to stave off unfair advantage. In April, BC also banned fully automated self-driving vehicles. Trump’s “Made in America” gambit may make even more American cars available to Canadian drivers. Industry insiders feel a Harris presidency won’t change much in automotive industry trends. A Trump presidency could see more aggressive support for Michigan makers such as Ford and General Motors as well as Elon Musk’s Tesla. Trump would likely roll back environmental regulations and standards such as the Corporate Average Fuel Economy standard that came into effect in August under Biden. The jury remains out on whether those standards make cars more expensive, though one recent consumer report analysis says it doesn’t..

Gasoline (fuel): While both would-be presidents have indicated they would work to keep gas prices down, Harris is leaning more toward clean energy solutions, whereas Trump has repeatedly called to “Drill, baby, drill.” Trump would roll back green regulations that hinder current oil gas and coal extraction production. Chevon and Esso will likely continue to be major suppliers of fuel to Vancouver Island, in either case.

Oil and Gas: Trump is an oil man. Big Oil contributed at least $75 million to the Trump campaign through PACs. Canada exported more than 80% of its total oil supply to the United States in 2023. Beginning this year, the Trans Mountain Expansion Project (TMEP) significantly increased Canadian oil exports to the US West Coast. Supertankers with TMX oil began moving through the Salish Sea and the Strait of Juan de Fuca this spring. Trump’s universal tariffs would impact those exports.

Canada, the world’s fifth-largest producer, remains a player in a declining LNG market and is not as dependent on the US as it is on other global customers. A flurry of pipeline approvals and construction in BC in recent years has raised its resource portfolio but global trends in LNG demand seem to be declining. Its pipeline glut may pose significant risks to the province in a world where many governments are moving away from fossil fuels and price volatility is on the rise.  

In 2023, Canada exported roughly 45% of its natural gas supply to the United States. That likely won’t change, regardless of who gets in, though Trump tariffs may lessen further the southern flow of the resource.

Tourism: American travelers account for roughly 20% of visitors to Victoria and spend 70% more than domestic visitors.  An exchange rate of .072 makes it appealing to shop and save, even on day trips in the CRD from Washington state. Destination Greater Victoria recently ramped up its marketing efforts in Seattle and will do parallel work to support the efforts of Destination Canada in California, Texas, New York, and Boston. Destination BC offers development assistance in its partnerships with Indigenous Tourism BC and the Ministry of Tourism, Arts, Culture, and Sport.

Agriculture and Seafood:  Vancouver Island imports far more food than it exports. Up until the 1950s, 85% of food was grown locally on the island. In 2019, that number had dwindled to only 10%. Trade and Invest British Columbia shows 9,635 people on Vancouver Island employed in the agrifood and seafood industry. Approximately 60% of BC’s shellfish is exported to the US. Little has been done by the Biden administration to curtail interception fishers in Alaska from absconding with and estimated 18 million BC salmon and steelhead. It’s hard to imagine Harris could do worse—or that Trump would do better. 

Immigration: From the previous year, the number of people arriving at airports in BC to file refugee claims doubled in 2023. Last March, Canada and the US agreed to the first major change to the Safe Third Country Agreement (STCA0—which allows for the return to the US of persons who arrive in Canada from the US (and vice versa), in two decades. The change expands its terms to the entire land border rather than just formal crossings. Harris, like Trudeau, is supportive of immigration but would like to see more conservative policies applied to the current situation. Canada is set to reduce permanent residents by 21%  by next year. Harris has been working to address the “root causes” of immigration from Central and South American countries to stem the growing tide of migrants at the US border. While on the campaign trail, Trump has repeatedly pledged to deport at least 10 million undocumented immigrants back to their home countries and has openly discussed building migrant detention camps.

That policy could mean a significant rise in “refugee” claimants from the US. Members of the LGBTQ community may also begin to arrive in BC as asylum seekers, given rising anti-queer/trans sentiment and new anti-trans laws. A total of 662 anti-trans laws have been drawn up in 43 states, 45 of which have passed—-125 are active. In 2023 alone, 53 bills were introduced at the federal level about service to trans people in healthcare, employment, student athletics, education, and incarceration.

A Harris win may feel more to residents of the CRD like the status quo but if Trump wins, we could see major shifts in trade and immigration policies that may have far-reaching impacts on both the short- and long-term.

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Whoever gets in, the US election will have an impact on the CRD
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