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MNI INTERVIEW: EDC Economist Sees Investment Boost From 2020

By Yali N'Diaye
     OTTAWA (MNI) - The new United States-Mexico-Canada trade agreement removes
uncertainty for Canadian companies, and should boost business investment from
late 2019 through 2021, the chief economist at Canada's export agency said.
     "We absolutely do expect that there is going to be a wave of investment
that comes through as a result of the signing of the deal," Peter Hall, from
Export Development Canada, told MNI.
     "A lot of money has been piling up" as firms were unsure whether to expand
in Canada or elsewhere, or to upgrade their facilities or not. "Some or all of
that investment is actually going to occur," Hall predicted.
     "Toward the end of 2019 we start to see some of the impact," with most of
it likely to be felt in 2020 and 2021, he said, noting that companies need time
to obtain funding and permits for new projects.
     Investment in machinery and equipment can happen more quickly, but not
without a six- to 12-month delay, he said, pointing out that much of the
machinery and equipment deployed in Canada is imported.
     Based on conversations with businesses, Hall told MNI the added investment
will be "tilting more towards the expansion of plants."
     In spite of all of the risk and concerns during the North American Free
Trade Agreement renegotiation process, exports "have not suffered", Hall told
MNI, saying Export Development Canada's export forecasts had already assumed an
agreement would be reached.
     After a weak summer in 2017, when exports declined between June and
September, they have been mostly increasing, although Statistics Canada reported
Friday a 1.1% decline in August, which owed mostly to "atypical shutdowns" in
the auto sector. Real exports contracted 0.7% on the month, but rose 0.2%
excluding autos and parts.
     Imports of machinery, equipment and parts declined 0.5%, with volumes down
0.3%, following gains of 1.2% in both July and June.
     Hall expects 2% GDP growth in 2018 and 2019.
--MNI Ottawa Bureau; +1 613 869-0916; email:
[TOPICS: M$C$$$,MX$$$$]

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