How Will The Biden Presidency Impact The Wallets Of Canadians?January 22, 2021
written on behalf of Feigenbaum Law
The word was watching this week as Joe Biden became the 46th President of the United States. While this is undoubtedly huge news for Americans, the implications of a new president will be felt around the world, and certainly in Canada. In this week’s blog, we want to look at how the Biden presidency could impact Canada and its economy.
Biden reverses decision to allow Keystone XL pipeline
One of the first announcements to emerge from the Biden administration was the decision to revoke a permit that would allow the proposed Keystone XL pipeline to pass through the United States from Canada.
According to an article on the news site Politico, Canadian government officials had tried to make their case for Biden to allow construction of the 1,200-mile pipeline. However, these efforts did not amount to success, and the story reports that the company behind the pipeline is ready to give up on it.
The project was set to be a huge economic boon for Alberta, and while the Canadian government would have to back Alberta in a challenge of the decision, the story noted that the government would not want to come on too strong against the Biden administration so early on.
Still, Alberta is not happy about it. The province was reported to have already invested billions of dollars in the project, with Alberta Premier Jason Kenney stating the Biden administration “owes Canada the respect to at least sit down with us and talk” about the future of the international pipeline.
Trade and tariffs
A recent story published on CTV says that any remaining tariffs from the Trump administration would likely be scraped by Biden. While Trump’s aluminum tariff was already set aside by the previous administration, tariffs on softwood coming from Canada are still in place.
Sara Goldfeder, of Earnscliffe Strategy Group, was quoted in the story as stating that Biden would likely develop trade policy similar to Canada’s in that it will look to do more than facilitate the movement of goods across borders. Instead, she says we should look for protections for American workers, the environment, and a level playing field for all.
A story published by Global News warns that protections for American workers could have an adverse effect on the Canadian economy, especially as it relates to Canadian companies providing goods to the United States Government. The story quotes Dennis Darby, president and CEO of the Canadian Manufacturers and Exporters as saying “If you’re in the business of supplying government procurement projects like municipal infrastructure, those companies are at the most risk.”
Taxes may change for individuals
PWC Canada published a story in late 2020 detailing some of the changes the Biden administration may implement as part of their tax plans. One of these is a lowering of the US estate and gift tax exemption from $10 million to $3.5 million. Additionally, the story said that a Biden administration may increase the highest US estate tax rate from 40% to 45%. This will of course impact Canadians who hold US citizenship since US citizens are not exempt from filing US taxes even if they live abroad.
If you are a US citizen living in Canada or if you have US financial interests, Feigenbaum Consulting’s cross-border tax services, including cross-border estate planning as well as our tax planning and compliance services can help you. Contact us to learn how our skilled team can assist you and provide you with comfort in knowing that you are in experienced hands. We offer services to clients in the US, Canada and around the world. Contact us at firstname.lastname@example.org, or call us at (905) 695-1269 or toll free at (877) 275-4792.