Global Business Forum, Banff (September 27-28, 2018)
Ambassador David McNaughton, Canadian Ambassador to the United States:
- The purpose of NAFTA was to make our 3 countries more competitive globally.
- Trade has increased 9 fold over 25 years.
- Today the current US regime is squarely focused on themselves.
- Many chapters have been “closed”: however, as of Thursday night “we are half empty “vs. half full at the beginning of the week.
- Chapter 19, the dispute mechanism is a deal breaker.
- There is a polarization developing in the US between the right vs the left, rural vs urban, etc., which is dividing and creating a challenging environment in the US.
- Agriculture is special on both sides of the border.
- Oil and gas from Alberta makes the US even more competitive.
- NAFTA is crowding out other important policies such as cyber security, technology development and military defense.
North American interest rates
- US Federal Reserve increased interest rate from 2 to 2.25%, encouraged by a strengthening labour market and the fact that “economic activity has been rising at a strong rate”.
- FOMC expects “further gradual increases in the target range for the federal funds rate”.
- Fed has released 2021 projections for growth in the 1.6-2.0% range and unemployment in the 3.5-4.0% range.
- Chair Jay Powell stated US is moving from expansion to neutral interest rate environment.
- Chair Powell acknowledged the importance of emerging markets and the impact Fed policy may have on them, and highlighted Importance of maintaining the stability of the financial system.
- BOC Governor Stephen Poloz said that BOC will continue to raise interest rates gradually, stating “raising interest rates too quickly could choke off this economic growth unnecessarily”.
- In a speech on Thursday, Poloz stated that if NAFTA was successfully renewed, investment spending should pick up, giving us a longer period of non-inflationary growth.
- Average weekly earnings for Albertans $1,148 in July 2018, up nearly 2% from July 2017.
- Albertans take home pay 15% higher than national average of $997.
- Stats Canada states rise in wages due to increased earnings in Alberta’s retail trade sector, up nearly 9% y/y.
- Amazon to open retail stores that will only sell products rated 4 stars or better out of 5.
- Canada’s GDP up 0.2% in July vs. EST 0.1%, June was flat.
- CBS plans production hub in Canada to support its growing output of television shows.