In the short term, Canada not affected by U.S. government shutdown: UBC prof

VANCOUVER (NEWS 1130) — A UBC economist says Washington D.C. needs to resolve the partial government shutdown sooner than later if major economic impacts are to be avoided both sides of the border.

James Brander, economist and professor with UBC’s Sauder School of Business, says for now Canada should not see major economic impacts from Washington’s failure to pass a bill to keep much of the U.S. government funded. Only if it becomes a longer-term issue will both countries see their economies affected. The shutdown, rather, is part of greater tumult which he says has already been taking some toll on the Canadian economy.

“The most important thing, we’re already seeing it, it’s kind of an indirect effect, which is the climate of the U.S. stock market,” Brander says. “Recent events, including the government shutdown, have spooked U.S. markets. Basically, Donald Trump has really spooked U.S. markets.”

WATCH: U.S. government shutdown to last through Christmas

He says when it comes to the markets, Canadian wealth has been hit “pretty hard” since our markets move in unison with what goes on south of the border.

“If a shutdown continues for a while, I think, that will probably get worse,” Brander adds.

The second effect which he sees potentially happening is on a more individual basis, such as Canadians trying to get information when working out their tax situation in the United States, or when crossing the border.

“Just people who need to interact with the U.S. government, and that’s a lot of Canadians or a lot of Canadian companies, will find things slower or more difficult, so it adds up,” he says.

RELATED: U.S. federal shutdown begins after lawmakers fail to reach deal

At this point, however, Brander says it’s anyone’s guess how the shutdown this time around will play out. As it stands, President Trump will not accept any deal which does not include a border wall at a price of $5 billion.

“The Republicans and the Democrats in Congress basically had an agreement, and then Donald Trump after saying that he would go in line, changes his mind, if there isn’t money for the Mexican border wall, I am not signing off on this,” he says “Will he back off that demand? That’s very hard for me to predict.”

Majority of U.S. government affected by lack of funding

The gridlock blocks money for nine of 15 Cabinet-level departments and dozens of agencies, including the departments of Homeland Security, Transportation, Interior, Agriculture, State and Justice.

The lack of funds will disrupt many government operations and the routines of 800,000 federal employees. Roughly 420,000 workers were deemed essential and will work unpaid just days before Christmas, while 380,000 will be furloughed, meaning they’ll stay home without pay.

Those being furloughed include nearly everyone at NASA and 52,000 workers at the Internal Revenue Service. About 8 in 10 employees of the National Park Service will stay home and many parks were expected to close.

— with files from Ben Wilson and the Associated Press

Top Stories

Top Stories

Most Watched Today