Although they admit there are a lot of unanswered questions at this point, leaders of Canadian construction associations are cautiously optimistic Donald Trump’s U.S. presidential election win could be good for the national economy, business and the construction industry.”I think a lot of people are surprised by the outcome,” said John Gamble, president and CEO of the Association of Consulting Engineering Companies (ACEC).
“The Trump campaign was big on slogans, light on specifics. However, the potential upside is he has certainly positioned himself as being pro-business and anti-red tape and that might lead to some huge opportunities. At the moment, it’s just great uncertainty.”
Trump made many declarations throughout his campaign. Plans to renegotiate the North American Free Trade Agreement (NAFTA) and threats to cancel it, reviving the Keystone XL pipeline project in Alberta and making significant investments in infrastructure are just a few that could impact the Canadian construction industry.
“It’s obviously very much early days. There is a lot of analysis and clarity to emerge in terms of what a Trump presidency means for America particularly and North America in general,” said Paul de Jong, president of the Progressive Contractors Association. “It’s difficult to separate the true policy lines from the hyperbole that were part of the election process.”
Michael Atkinson, president of the Canadian Construction Association, said reopening NAFTA could be an opportunity to look at how it can be improved.
“If president-elect Trump wants to renegotiate NAFTA, having the procurement provisions apply more broadly, I think it would be a positive thing,” said Atkinson. “It would be one way to modernize that agreement, but certainly CETA (Comprehensive Economic and Trade Agreement), Trans-Pacific (Partnership), any of these newer, international trade agreements, the procurements apply more than just to national procurement, it applies to subnational procurement as well. That is where all international trade agreements are going now.”
That is important, he said, because Canadians felt shut out during President Barack Obama’s infrastructure stimulus program when Buy American provisions were imposed on federal projects which meant Canadian products couldn’t be used.
“Any time Canadian business is not able to take advantage of an international marketplace that is disturbing,” said Atkinson. “The other concern we had, as an organization, is that at the time this was going on, there were some Canadian jurisdictions, municipalities in particular, that were threatening to bring in their own version of ‘Buy Canada.’ That would have caused problems for us as contractors because very often those types of measures make the primary contractor responsible for policing the supply chain,” said Atkinson.
For Gamble, changes to NAFTA could impact ACEC’s member firms who work on both sides of the border, as well as the American firms that work in Canada.
“We have a very integrated marketplace and he’s called NAFTA into question, mainly in the context of the U.S. dealing with Mexico,” said Gamble. “He has had absolutely zero specifics as to what he means when he says he’s going to renegotiate NAFTA, if he can renegotiate NAFTA and what the consequence is in our integrated marketplace to engineering and architectural services. That’s the big question.”
According to de Jong, at this point, Canada shouldn’t be too concerned about any dramatic changes with respect to cross-border trade between Canada and the U.S.
“I think one of the possibilities is that the statements made in the election campaign against things like TPP (Trans-Pacific Partnership) and NAFTA were particularly a directive against predatory activities by some of the countries that America deals with, but I don’t think they include Canada,” de Jong stated. “Obviously that needs to be proven, but there is no indication that I can tell that his campaign included some type of negative posture towards Canada. We need to recognize that we have a negotiator in the president’s office in America and he’s going to hold us to account as well so we need to have our game ready for that.”
Trump has also said he supports construction of the Keystone XL pipeline from Alberta. “It’s something the Trump presidency more or less assures as opposed to Ms. (Hillary) Clinton being president, it probably would not have been a priority,” Atkinson pointed out. Reviving the project may create much-needed jobs in Alberta.
“That’s a good news story for Alberta — it creates jobs, it creates opportunities,” said de Jong. “But the other thing it does is it starts to speak a different story to corporate investors who are looking at Canada and North America and trying to understand if this is a good place to invest.”
Gamble believes that pipelines should be built and can be built in a responsible way. But he questions if it’s too late for Keystone. “Does the patient have enough of a pulse that we can bring it back in a timely manner?” asked Gamble. “Particularly in light of the struggle in Alberta and other parts of the province, this might be an opportunity.”
Trump has also stated significant dollars should be spent on infrastructure, fixing roads and bridges. De Jong said it’s positive that Canada and the new Trump administration share common views on the importance of infrastructure investment.
“I think it’s important to track the increased synergy between Canada’s focus on infrastructure spending and Trump’s pledge to spend robust monies on infrastructure, I think he has mentioned as much as a trillion dollars on stimulus programs for highways bridges and tunnels,” said de Jong. “The general perspective as a North American marketplace is that’s a good news story. You have that synergy north and south of the border where you have two governments focused in a similar manner on building the infrastructure capacity and framework of the two nations.”
Whether or not Canada benefits from that infrastructure spend remains to be seen.
“The vast majority of the infrastructure build is at the state or local level, which is certainly the trend here in Canada,” Atkinson explained. “If that is open to Canadian businesses and firms, it would be great news but that’s the big question — will it be open?”
It could also be a positive thing for the firms ACEC represents but Gamble said they’re taking a “wait and see” approach.
“Much of the infrastructure commitments made by the federal and other levels of government have been predicated on the need for trade enabling infrastructure, so that’s something that has to play out,” said Gamble. “The other side of the coin, is the U.S. going to take a protectionist posture in terms of Buy American? If NAFTA is in question, we might be on the outside looking in.”