by Angelo Katsoras, Geopolitical Analyst, National Bank Financial
Introduction
President-elect Donald Trump’s stunning electoral victory and Republican control of both houses of Congress has set the stage for a radical reversal of America’s energy policies. This reversal is being driven primarily by two factors:
• Most of Obama’s signature energy policies were implemented via executive order, which means that the new president could reverse many of them without seeking approval f rom Congress
• While Trump differs with many Congressional Republicans on trade, deficit spending and foreign policy, they are on the same page when it comes to energy The Trump administration’s agenda likely includes approval of t he Keystone pipeline, undoing many regulations regarding fossil fuel production, cancellation of the Paris Agreement and lower fuel efficiency standards for automobiles.
All things being equal and notwithstanding concerns over the longer term effect on the environment, the combined impact of less regulation and potentially lower business taxes (another Trump promise) will improve the bottom lines of many U.S. corporations.
Unfortunately, Trump’s energy U-turn comes at a time when costs for many Canadian companies are set to rise due to the implementation of carbon-control regulations. This could pl ace many Canadian businesses at a competitive disadvantage vis-à-vis their U.S counterparts. This disadvantage could be further reinforced by Trump’s intentions to reduce corporate taxes as well.
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