Obama fast becoming Canada’s best friend

Canada has a new secret weapon. His name is Barack Obama.

At least, that’s one interpretation of negative fiscal consequences likely to flow from the Democratic president’s ambitious, big-ticket government agenda and not a far-fetched one at that.

According to an analysis offered last week by economist Jason Clemens, research director at the San Francisco-based Pacific Research Institute, the U.S. is about to become less competitive to investors, presenting “a golden opportunity for Canada.”

As a result of government spending cuts through the 1990s, Canada has a leaner, meaner public sector operation, now roughly equivalent in size to its U.S. counterpart.

The difference is, the trend line in the U.S. under Obama is toward bigger government, more public spending, higher taxes, an enormous deficit and a growing debt load. Clemens pointed to Obama’s recent $700-billion-plus stimulus plan and his proposed reforms in health care, education and the environment.

Obamanomics, Clemens says, presents “an opportunity for Canada to assert itself economically in North America and beyond.”

Canada’s position will be further enhanced if the Harper government and its successors can successfully discipline spending.

“I’m quite excited about the opportunities for Canada if it recognizes this moment of opportunity and it says, we’re not going to do the dumb things the U.S. is going to do.”

But even without any further retrenchment in spending, Canada still will have an advantage given what’s happening south of the border.

Clemens, who worked at Vancouver’s Fraser Institute before moving to California in 2008, describes the Obama agenda as intrusive and radical, one that will require higher personal and corporate taxation.
In his Vancouver talk Friday, sponsored by the Fraser Institute, Clemens noted that Obama has managed to sell his program based on the fact “he is easily the most articulate and charismatic leader, on a par if not ahead of John F. Kennedy.”

The Republican Party, in poor shape and looking to rebuild, is not in a good position to offer an alternative vision to American voters.

Current forecasts show the Obama program will increase American debt as a percentage of the U.S. economy from 40.8 per cent in 2008 to 82.4 per cent by 2019.

“This could create a lasting economic advantage for Canada,” said Clemens.

“I can tell you, as someone who works and lives right next to Silicon Valley, there is absolutely no appetite in Silicon Valley for investment in California.”

He noted some high-tech entrepreneurs already have relocated operations to Nevada.

In future, Canada should be thinking about ways to promote itself as an alternative site for U.S. investment.

Clemens cautioned that Canada needs to create conditions to take maximum advantage of any newfound competitiveness. That might include adjustments to labour laws or enhancing infrastructure to enable goods to cross the border more efficiently.

The downside for Canada of the corpulent public spending in the U.S. is that a sluggish economy to the south will doubtless adversely affect trade.

Canadians, of course, have been cheering for Obama simply because they’re relieved to be done with George W. Bush, and they like the new president’s openness and more liberal outlook.

Polls continue to show he is the most popular politician in Canada.

Now, it seems, there’s another reason, however perverse, for Canadians to embrace the U.S. president.

[email protected]
©Copyright (c) The Vancouver Sun

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

Scroll to Top