{"id":23404,"date":"2020-01-29T10:40:51","date_gmt":"2020-01-29T10:40:51","guid":{"rendered":"https:\/\/www.ceo-na.com\/?p=23404"},"modified":"2020-01-29T16:40:09","modified_gmt":"2020-01-29T16:40:09","slug":"what-to-expect-from-trudeaus-new-government","status":"publish","type":"post","link":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/business\/management-leadership\/what-to-expect-from-trudeaus-new-government\/","title":{"rendered":"Expectations for Trudeau\u2019s new government"},"content":{"rendered":"

Experts weigh in on what they expect after a new\u00a0Justin Trudeau victory.<\/span><\/p>\n

In the wake of Justin Trudeau\u2019s victory, several Canadian investors and analysts <\/span>spoke to The Financial Post<\/span> <\/a>regarding their predictions for what we can expect from the new government.\u00a0<\/span><\/p>\n

Trudeau\u2019s Liberals were reduced to minority status in parliament following the vote and will need the support of other parties to get important legislation through. This is likely to include the left-leaning New Democratic Party, or even the separatist Bloc Quebecois.<\/span><\/p>\n

According to the experts consulted by The Financial Post, larger federal deficits, continued uncertainty for the energy sector and a potential push to reduce bills in the telco sector are all high on the agenda for the next few years.\u00a0<\/span>Here are the highlights:<\/span><\/p>\n

Energy<\/b><\/h1>\n

Canada\u2019s energy sector could see a backlash in the coming months as a major bone of contention surrounding the injury will be the construction of pipelines to reduce the bottlenecks in Canadian crude markets, said Candice Bangsund, a member of the Fiera Capital Tactical Asset Allocation Committee.<\/span><\/p>\n

Others are cautiously optimistic, however. \u201cIt remains possible that the Trans Mountain expansion will proceed as it has already received Cabinet approval,\u201d said David Doyle, analyst at Macquarie. He added that the same could not be said for new pipelines, which face a more difficult path to approval.\u00a0<\/span><\/p>\n

Nevertheless, opposing voices take a more negative view. \u201cWe have a swath of uncertainty around energy yet again, so I expect a sell off on the stock side, starting today and going over the next couple of months until we have a clear picture on where policy may be going,\u201d said Philip Petursson, chief investment strategist at Manulife.\u00a0<\/span><\/p>\n

Deficits\u00a0<\/b><\/h1>\n

\u201cIn terms of economics, you\u2019re going to see deficits increase,\u201d said Thomas Caldwell, chairman of Caldwell Investment Management. \u201cI think it will be a less popular destination for international funds, for money, for investing. My gut feeling is we will see deficits, we will see less productive spending, less attractive environment to invest funds.\u201d<\/span><\/p>\n

Liberals have promised to raise the government deficit to CA$27.4 billion (US$21 billion) next year to fund new campaign pledges, bringing it above 1% of GDP for the first time since 2012.<\/span><\/p>\n

Doug Porter, chief economist at BMO, believes that \u201csignificantly larger\u201d budget deficits should be expected given that the Liberals may need to rely on NDP support for some programs. According to Porter, that number could swell to close to $30 billion next year. \u201cI would just expect the net result to be a significantly larger budget deficit\u2014not anything to be overly concerned about,\u201d he said.\u00a0<\/span><\/p>\n

\u201cIf a Liberal and NDP coalition holds, spending is likely to increase meaningfully and deficits are likely to get larger in the next two years,\u201d said Mike Archibald, associate portfolio manager at AGF Investments. \u201cThis likely means a weaker loonie over the medium term.\u201d<\/span><\/p>\n

Monetary policy\u00a0<\/b><\/h1>\n

According to Bangsund, from a macro perspective, \u201cgrowth-enhancing fiscal stimulus\u201d backs up the idea that the Bank of Canada will take a \u201csidelined approach\u201d even as the Fed pursues easier monetary policies south of the border. The narrowing rate differentials between Canada and the US will lend support to the Canadian dollar, she said.<\/span><\/p>\n

Monetary policy may have been the driver of economic growth in Canada in recent years, but now that rates are much lower they will be a lot less effective going forward, which means having effective fiscal policy is going to be much more critical than it was previously, PIMCO\u2019s Devlin stated.<\/span><\/p>\n

\u201cThe loonie, which is a gauge of what investors think, hasn\u2019t reacted much, which means markets were priced for this,\u201d offered Patrick O\u2019Toole, credit portfolio manager at CIBC Asset Management. \u201cThere is still a sense from investors that Canada is still steady as it goes, it\u2019s got a sound government.\u201d<\/span><\/p>\n

Telecoms<\/b><\/h1>\n

Another sector that could be affected over the next couple of years is telecommunications companies, Macquarie\u2019s Doyle said, given that the Liberal party\u2019s vow to cut cell phone bills by 25% could be supported by the NDP and Bloc Quebecois.<\/span><\/p>\n

During campaigning, Trudeau\u2019s Liberal party pledged to cut wireless services costs within four years, and the New Democratic Party also indicated that if elected, it would impose price caps on mobile phone and internet services that would save families about $10 (US$7.53) per month.\u00a0<\/span><\/p>\n

The Canadian Wireless Telecommunications Association argues that wireless prices have already fallen by about 30% over the past three years.<\/span><\/p>\n

\u201cTrudeau\u2019s policy will weigh on telco companies, though I don\u2019t expect a big selloff,\u201d Manulife\u2019s Petursson told The Financial Post.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Experts weigh in on what they expect after a new\u00a0Justin […]<\/p>\n","protected":false},"author":22,"featured_media":23402,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1069,43],"tags":[529,99,1513,2058,803,2605,2831],"class_list":["post-23404","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-editors-choice","category-management-leadership","tag-canada","tag-ceo","tag-ceo-latam","tag-ceo-latinoamerica","tag-justin-trudeau","tag-prime-minister","tag-trudeaus-new-government"],"_links":{"self":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/23404","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/comments?post=23404"}],"version-history":[{"count":4,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/23404\/revisions"}],"predecessor-version":[{"id":23494,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/23404\/revisions\/23494"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/media\/23402"}],"wp:attachment":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/media?parent=23404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/categories?post=23404"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/tags?post=23404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}