With November 8th finally behind us, speculations have already begun on how the new Presidential Elect will affect life in Canada. Just like the US itself, opinions seem to be divided. All it takes is a quick scan of the headlines to see just how anxious the world is over what will happen in the next four years.
After our immigration website crashed during election night, many are predicting that Trump’s presidential win will lead to an influx of Americans heading North. And while this may let some home sellers cash in, it may put even greater pressure on the affordability crisis.
The new President’s plan to invest $1 trillion on infrastructure has led many financial markets to worry about inflation. As a result, investors are dumping bonds and causing certain interest rates to rise. Mortgage rates could be affected at any time, according to a recent article in The Globe and Mail.
Trump also said he would like to renegotiate the North American Free Trade Agreement (NAFTA). As America’s closest and largest trading partner, 31.5% of Canada’s GDP based on exports, and 74% of our exports go directly to the US. If this has a less favourable outcome for Canada, it could cause serious economic issues for our country.
However, opposition to free trade deals would also hurt the American economy, forcing their interest rates to stay low for longer. And since U.S. interest rates affect Canadian interest rates, it would mean lower mortgage payments in Canada.
A map proposed that California, Oregon, and Washington leave the US to become part of Canada.
After a record number of Google searches on “How to move to Canada”, the housing outlook is more uncertain than ever. The general consensus from RBC and other economists is that Trump’s policies have a strong potential to accelerate inflation at a much higher rate than is being predicted. Partnered with deep tax cuts and fiscal spending, inflation could be the likely outcome.
Only time will tell whether or not his claims had any merit, but despite the varying perspectives, there is one thing certain: the world is watching anxiously. Though some remain hopeful, others are merely bracing themselves for hard times ahead.
Will Trump affect inflation rates and Canada’s economic future? Tweet @naiopvancouver and let us know!