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Trudeau’s plan to lift Canada’s economy could be felt on this side of the border

Americans are infamously uninformed about Canadian politics, but Americans in Western New York have been given good reason to sit up and take notice. Whatever Canadians may think of the federal election that put Justin Trudeau in the prime minister’s office, it could have a beneficial impact on Western New York and other border areas.

Canada’s Liberal Party – headed by Trudeau, son of the late Prime Minister Pierre Elliott Trudeau – was swept into power last week based in large part on his promise to use deficit spending in an effort to spark the country’s lagging economy. One not unlikely outcome could be an increase in consumer confidence, whose influence could be felt in the shops, bars, restaurants and entertainment venues on this side of the border.

In addition, American companies with operations in Canada may benefit from the new government’s policies, and other companies could be more likely to open their own operations there. And Canadian companies could be incentivized to look for opportunities in the United States as the economy rebounds. Buffalo’s location on the border makes it a natural choice – though that possibility would be aided by more predictable crossing times at the Peace Bridge.

Politically, it’s interesting that Trudeau and his Liberal Party won an unexpected majority in Parliament by promising to spend more money than the government takes in. In this country, reducing the deficit has come to override virtually all other concerns, limiting both the good and the bad that government spending can accomplish. Given the commentary on Trudeau’s victory, it seems plain that it can include valuable outcomes.

As Jay Amer, Empire State Development’s Canadian director, observed, when money is pumped into an economy, companies that sell goods and services can’t help but benefit. That expands the economy and provides more jobs, which creates new tax revenues.

A stronger Canadian economy should also strengthen the Canadian dollar, which has dropped precipitously against the American dollar. That makes goods on our side of the border more expensive for Canadian shoppers, reducing the number of cross-border shopping trips. And that, in turn, means lower sales tax revenue.

Plainly, deficit spending also raises government debt, with which future generations will have to contend. It’s not a strategy without consequences, but it’s one that can be more or less useful, as economic conditions warrant.

Already, Western New York companies are taking notice. LPCiminelli, a Buffalo contracting company, is interested in examining opportunities that may arise in constructing municipal buildings or hospitals. The company already has some business relationships in Canada that could aid in that process, said Kevin C. Schuler, a company vice president. That could boost the company’s revenues, employment base and tax bill – all to the benefit of Western New York.

The economies of the United States and Canada are more intertwined than most Americans understand, and those connections are especially pronounced in border areas such as Buffalo and Detroit. With Trudeau’s victory and his plans, good things may be in the offing in those communities.