NAFTA & CANADA

QUESTION: Mr. Armstrong; Up here in Canada, the politicians seem to not even talk about the NAFTA agreement being changed by Trump. Has something taken place behind the curtain that they are not even worried about that issue?

CB

ANSWER: While playing a front row seat during the 2016 Election in the States, the truth is that Trump was focusing more on Mexico than Canada. The reason why was taxes. Manufacturing plants set up in Mexico, not Canada, which taxed even higher rates than the USA.

Even Stephen S. Poloz, Governor of the Bank of Canada, has set aside the issue of NAFTA claiming there remains uncertainty until he knows more about the nature of the risk, he will not focus of that topic.

The much greater risk to Canada will be the Trump Tax Reform. Canadians will also shift business to the States because it will save 50% in taxes. So, the tax reform is a far bigger issue than NAFTA.