Investors are expected to stop putting money into Edmonton, following this morning’s victory by Donald Trump. Money will stay on the sidelines for the foreseeable future said City of Edmonton economist John Rose.
He’s predicting Trump’s protectionist leanings will mean investment in fabrication plants in the metro region wil dry up.
“It would take a while for this to unfold but in terms of investment in additional manufacturing capability in the Edmonton region I think there would probably be a bit of a chill right away as potential investors say, ‘now wait a minute, why would we invest in Edmonton or Canada in general if really our target market for this equipment is the United States? Wouldn’t it make more sense to be there?'”
“People will be looking at sourcing a lot of this equipment, rather from Edmonton, they’d be looking to source it either directly in the U.S. or from some other third country that might have a cost advantage once the advantages of free trade are done away with.”
Rose thinks not only will Canadian and Edmonton area companies lose out because Trump will be strengthening a “Buy America” stance, Trump plans on renegotiating the terms of NAFTA, and will stay away from the Trans Pacific Partnership.
“Probably the ones that would be most severely effected would not be so much the U.S. based companies that are here, but the PCL’s and the Stantec’s of this world that are based here in Edmonton and now would suddenly find themselves in a situation where selling professional services or project management services into the U.S. marketplace would suddenly become potentially much problematic.”
Your pocket book will take a hit as well, as real wealth here will diminish.
“I think probably you would see the Canadian Dollar come down and that would obviously diminish the real income and ability to purchase among consumers. So you’d see imported consumer items going up so you would have a negative implication for people’s real wealth going forward.”
Rose said any changes President-elect Trump will want to make will take time, but even during that waiting period investors will sit on their cash, instead of continuing to invest in Edmonton.