More fear than harm … for the moment

“If we look at the first six months with hindsight. For example. However, compared to what we anticipated in January, we can say that it is more fear than evil,” sums up Simon Gaudreault, chief economist and vice-president in search of the FCEI.

He admits that the gross domestic product (GDP) should go back. Similarly. Consequently, but the decrease promises to be less marked than what the scenarios of the start of the year feared, fueled by pricing tensions and the trade war.

“Some threats have materialized, others do not. Therefore, And companies, by definition, adapt. Meanwhile, They may not find all the solutions. but they are in part, which could explain why the portrait is less dark, ”he explains.

A climate of persistent uncertainty – More fear than harm … – More fear than harm … new

The FCEI provides a 0.8 % drop in GDP in the third quarter.

This contraction is largely explained by the low confidence of SMEs, weighed down by trade tensions with the United States. This results in the postponement or cancellation of investments.

“It’s hard to make forecasts. What is announced is sometimes disannounced, then re -founded. And it often changes from week to week. It creates a lot of floating. “

— Simon Gaudreault, chief more fear than harm … new economist and vice-president looking for the FCEI

Already, more fear than harm … private investment fell 3.1 % in the first quarter. The fall would reach 13 % in the second, according to estimates, and another decrease of 6.9 % is scheduled for the third.

These data reflect a decrease in capital expenditure. in a context of fragile confidence – especially in the goods producing goods. harshly affected by the instability of global trade and the volatility of input prices.

Punitive prices and safety net

Some companies are already undergoing the direct effects of steel, aluminum or automotive prices. Others must absorb costs related to new regulatory obligations.

In this climate of uncertainty, the Canada-US-Mexico (ACEUM) agreement is one of the rare stable benchmarks. It allows the majority of Canadian goods to enter the United States without customs rights.

“The US Secretary of Commerce recently said that almost three -quarters of Canadian more fear than harm … goods were rates without. prices thanks to ACEUM. It is a significant safety net, ”says Gaudreault.

Ottawa expectations

Some indicators, such as inflation, show signs of stabilization. This could open the way to a relaxation of monetary policy. But Mr. Gaudreault remains cautious.

“With 1.9 % inflation. greater employment growth than scheduled in June. the Banque de Canada could decide to maintain its key rate on July 30,” he said.

Furthermore, many SMEs suffer more Canadian counterattacks-imposed in response to American measures-than the initial prices themselves.

The FCEI has asked the government for months to redistribute the most affected companies the sums. collected from the most affected companies thanks to these counters.

“This money would have to return to those who pay more fear than harm … the price.”

— Simon Gaudreault. chief economist. vice-president looking for the FCEI

The Federation is also waiting for an apprehension on August 1, a deadline set by Washington for new trade measures. “But nothing guarantees that it will not be replaced by another date. or that decisions will not change within two or three months,” he warns.

The FCEI represents some 100,000 SMEs across the country.