FOCUS | CANADA
One aim that has a direct impact on the crane and hoist industry is the intention to attract investment to improve infrastructure.
Consequently, there would be a squeeze on businesses’ profit margins, as they must cover the increase in costs of materials. If this scenario arises, US and Canadian consumers will pay higher prices for some imported goods – or goods made with imported materials – which has an inflationary effect and could put downward pressure on GDP growth. Ultimately, a trade war could have a negative effect both on Canada’s exports and its imports. Canada would be less competitive in dealing with its largest trading partner, and the volume of trade would likely decline, with both imports and exports becoming more expensive. For now, all we have is conjecture. The final
outcome could be an all-out trade war or just a skirmish, it is too early to tell, but for key industries in Canada the lack of certainty is a cause for concern. Throw into the mix a potentially dramatic shift in Canada’s domestic political landscape, and that uncertainty is compounded.
Change at the top Shortly before Trump fired the first actual shots in an exchange of tariffs, Trudeau decided to step down from his role at the head of government. The move followed persistent calls from within his own Liberal Party to step aside and was given a firm push when deputy prime minister, minister of finance and long-time ally Chrystia Freeland resigned suddenly. Freeland’s move was in no small part prompted
16 Spring 2025 |
ochmagazine.com
by Trump’s proposed tariffs, and her belief that Trudeau was not taking sufficiently robust steps to challenge the move. Trump was quick to take credit for ousting Trudeau and persisted in his taunt that Canada should become the 51st State, which would mean no tariffs. Freeland’s resignation came only a few days
after she announced the 2024 Fall Economic Statement, which sought to unlock billions of dollars of new capital and introduce new incentives for businesses to grow, innovate and increase employment. The plan included a total of C$26bn in tax incentives, including a major enhancement of the Scientific Research and Experimental Development (SR&ED) tax incentive programme. The SR&ED, which supports more than 22,000 businesses, has been touted as a key pillar in Canada’s plans to stimulate the economy by encouraging innovation. Furthermore, the government set out to unlock billions in private sector and pension fund investment to foster growth and create good jobs, with proposals to create a more attractive investment environment for pension funds to invest domestically. The aim is to remove investment barriers, crowding in private venture capital and attract billions to build AI data centres. One specific aim that has a direct impact on the crane and hoist industry is the intention to attract investment to improve airport infrastructure. The plan put forward suggests working with airports
and pension funds to incentivise development on airport lands, including by exploring potential changes to airport authority ground leases. “In the face of external challenges, Canada
needs to invest more in our own research and development,” Freeland said at the time. “At a time of rising economic nationalism, the fight for capital has never been more fierce. Canada needs to fight harder than ever for capital, including facilitating and supporting the investment of Canadian capital here at home. This is key to the future prosperity of all Canadians.” Where this budget plan goes from here
remains to be seen. What is certain is that the resignations of Freeland and then Trudeau cast significant doubt on the performance of Canada’s economy in the short term. Investments may be delayed or suspended as the world waits for the outcome of the trade battle with the US, and to see how the domestic political landscape changes. Businesses at home and investors from overseas are likely to approach the situation with caution, as uncertainty reigns over both leadership and economic policy. Much is likely to remain on hold until the next federal election, which is coming in October. The most likely outcome, according to polls, is a conservative win, though there is still a long run-in, and a week is a long time in politics. Should the conservatives win, it could mark a major change in Canada’s economic and fiscal agenda.
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