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NAFTA, Economic Outlook Dominate CanaData Conference Discussion

Celebrated American journalist and author Carl Bernstein thinks U.S. President Donald Trump’s “outrageous rhetoric” about NAFTA and other trade agreements could just be bluster. But he would not count on it. 

“There have been disadvantages in which the United States trade position has been undermined by [NAFTA]. But there are ways to negotiate and renegotiate,” the Pulitzer Prize-winning Bernstein said in a keynote speech at the CanaData East Construction Forecasts Conference in Toronto. 

“But whether Donald Trump is willing to do that, I don’t know. And one of the reasons we’re worried about it is ignorance.”

Carl Benrstein CanaData Conference
Pulitzer Prize-winning journalist Carl Bernstein was the keynote speaker at the CanaData East Construction Forecasts Conference in Toronto.

Bernstein, who called Trump’s leadership a malignant presidency, said he is not sure Trump will get beyond his “America First” protectionist position on anything to do with free trade.

“It’s almost purposeful ignorance; an unwillingness to do the hard work of worrying about trade problems. I’m not convinced there is a deep understanding by the president of the United States of this issue,” he said.

Still, Bernstein said Trump’s track record of changing his position and being moderated by facts, does leave some hope.

“That seems to me to be a possibility in all kinds of areas,” he said.

Peter Hall CanaData Conference
EDC Vice President and Chief Economist Peter Hall addresses the audience at the CanaData East Construction Forecasts Conference in Toronto.

Free trade was not the only focus of the 32nd annual CanaData conference, which is aimed at providing insight and predictions for Canada’s construction industry. Topics for the one-day event included everything from ongoing megaprojects to the transition from a resource economy to a high-tech one to the economic implications of the electric car.

Overall, economic pundits who spoke saw a bright future for an industry still feeling the effects of the economic crisis of 2008.

“We’re about to turn the corner in a big way, in a positive way,” EDC Vice President and Chief Economist Peter Hall said. “I believe we’re on the threshold of recovery.”

Hall said while economic growth since the crisis has been largely positive and consistent, it is nowhere near what it could be. He terms what we are in now as a more cautious new normal. 

“People just weren’t going to spend like they did before [the 2008 crisis]. The new normal was necessary. The next phase is recovery.”

Hall said the role of millennials will be significant in the near future as some enter and others rejoin the workplace and begin to consider homeownership

While over 30% of millennials in Canada now own their own homes, over 80% intend to buy in the next five years, HSBC statistics show.

“I’m wildly excited by these stats,” Hall said. “First-time homebuyers have been shut down for seven years. [Millennials] are on the move.”

CIBC Square megaprojects Toronto
While Canadian megaprojects like Toronto's ongoing CIBC Square continue to break ground, others are increasingly at risk of cancellation or change according to recent statistics from E&B Data.

Still awaiting recovery are the Canadian megaprojects, characterized as $1B or more. A presentation from ConstructConnect pointed to a megaproject drop-off from $879B in 2015 to $685B in 2016. 

Much of this was out west, which is still reeling from the oil and gas downturn. Stats from E&B Data found megaprojects deemed to be at risk or not happening as planned continued to grow, rising from 75% in 2015 to 85% in 2016.

“We don’t see any significant pickup [in megaprojects],” E&B Data President Jean Matuszewski said. “There are no major individual projects in the future.” 

The outcome of the NAFTA renegotiations will play a significant role in all aspects of the construction industry. According to EDC statistics, an overall 3.5% increase in tariffs would cost Canadians over 362,000 jobs and a 1.9% decrease in the Canadian gross domestic product. 

Peter Hall anticipates the ripple effect could prove much the same in the U.S., where 32 states have Canada as their chief trade partner.

“Americans don’t really care what happens to Canada or Mexico,” Hall said. “But it’s going to hurt the American economy badly.”