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Canada  

Budget defers to Trump?

This week's federal budget leaves Canada in a state of uncertainty as Ottawa waits to see what U.S. President Donald Trump will do south of the border, say Fraser Institute analysts. 

The think tank called the budget “status quo,” saying it “punts major policy decisions into the future,” creating an uncertain economic climate.

In a blog post Charles Lammam accused the government of “essentially deciding not to decide until President Trump decides,” a tactic that “leaves taxpayers, entrepreneurs and businesses guessing about what Canada’s economic policies will be.”

The Trump administration is hammering out details of what could be significant policy and tax changes in the U.S, including NAFTA, a border tax and others.

Lammam and Jason Clemens say those changes could make our southern neighbours a much more attractive destination for investment and skilled workers.

The budget could mean loss of competitive edge against the U.S., they warn.

“Critically, the budget does not provide a definitive answer on whether some of the rumoured tax hikes, particularly with respect to capital gains, will or will not materialize in the coming year. This uncertainty impedes decisions by entrepreneurs and investors,” Lamman writes.

Lammam and Clemens also point out non-residential business investment in Canada has gone down in eight of the last nine quarters, and “should be cause for alarm for a government committed to encouraging innovation and economic growth since investment is a key engine powering both."



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