Here’s how a U.S. government shutdown could impact Canadians

WASHINGTON –

With the failure of U.S. House Speaker Kevin McCarthy’s ultimate effort to maintain the federal government operating, a shutdown is wanting more and more sure south of the border.

Economists warn each Canada’s economic system and particular person Canadians may endure from impacts of a U.S. authorities shutdown, and that these impacts will deepen and broaden the longer it lasts.

“Canada and the U.S. are tied at the hips, so even if we are not having a shutdown in Canada…when the U.S. coughs, Canada gets the flu,” Andreas Schotter, professor of worldwide business at Western University, advised CTVNews.ca in a telephone interview on Friday.

The “flu,” on this case, may characteristic signs like commerce slowdowns, cross-border transportation slowdowns, inventory market instability, flight disruptions, U.S. visa and work allow delays and, if the shutdown lasts lengthy sufficient, elevated meals and gasoline costs and different disruptions to the Canadian economic system.

In a authorities shutdown, not each federal division and repair goes darkish. Instead, companies and capabilities which are thought of important proceed to run, whereas these thought of not important shut down.

How the shutdown impacts Canada will depend upon which departments and companies are deemed non-essential, and the way time causes that listing to develop, in accordance with Chetan Dave, professor of economics on the University of Alberta.

“The longer this shutdown continues, what you start seeing is slowly bigger and bigger things are going to get stalled because they will be deemed to be non-essential,” Dave advised CTVNews.ca in a telephone interview on Friday.

For instance, U.S. Customs and Border Protection may contemplate staffing on the border with Canada to be important at the start of the shutdown. However, feeling the strain of a protracted interval with out funding, the company may ultimately select to furlough some employees on the border with Canada as a way to maintain the border with Mexico totally staffed.

“The longer the government stays closed, the more the trade-offs they have to make as to what they will call essential and what they will call non-essential,” Dave mentioned.

ECONOMIC IMPACTS

The United States is Canada’s chief buying and selling associate, and the 2 international locations trade billions of {dollars} price of products and companies every day. In 2022, U.S. imports from Canada totalled $595 billion.

Any influence the shutdown makes on the U.S. Department of State may have an effect on U.S. funding in Canadian exports resembling crude oil and pure fuel, Dave defined.

“A lot of trade deals work through the State Department at some level,” he mentioned.

“They’re going to have to prioritize their funds, and they (will) probably put those funds towards hot spots in the world as opposed to like France and Canada and Germany.”

But it isn’t only a matter of what the Department of State does throughout the shutdown, as a result of so many different federal departments are additionally concerned with operating the U.S. economic system.

Any staffing cuts on the Canada-U.S. border may make it more durable to get imports like gasoline and meals into Canada, doubtlessly driving up the costs of these commodities the longer the shutdown continues.

“If border services shut down or are reduced to minimal, we can’t move goods up and down,” Schotter mentioned. “We will likely see an increase in gas prices…The same may happen to food security. You may feel that on the supermarket shelves, or at the check out.”

TRAVEL AND TOURISM

If imports and exports wrestle to recover from the land border, the state of affairs most likely will not be any higher for Canadians making an attempt to go to the United States, Schotter mentioned.

Travellers may face delays driving between Canada and the U.S. if a shutdown impacts U.S. Customs and Border Protection, and points flying into and out of the U.S. if it impacts the Federal Aviation Administration, which employs most air visitors controllers there.

Dave likened the doable influence on air journey to the time greater than 12,000 members of the Professional Air Traffic Controllers Organization went on strike in 1981, resulting in the cancellation of seven,000 flights throughout the nation.

“Your travel is going to be quite possibly painful, just going back to the eighties when, for example, the air traffic controllers kind of shut down most airports in the U.S. when they were in a union fight,” he mentioned.

Canadian vacationers visiting the U.S. may even see their journeys upended in the event that they plan to go to any of America’s 62 nationwide parks.

The U.S. Department of the Interior introduced on Friday that a lot of the parks will shut and be made off-limits to the general public within the occasion of a authorities shutdown.

CITIZENSHIP AND IMMIGRATION

Because the federal authorities handles visa purposes, work permits and something associated to citizenship and immigration, Canadians within the means of getting these purposes and paperwork permitted may additionally face delays.

“And those delays will only compound the longer the government stays closed,” Dave mentioned. “These things have a tendency to pile up. So it’s just going to just be a little bit of an administrative headache.”

CTVNews.ca reached out to Global Affairs Canada and the Canada Border Services Agency for remark however didn’t obtain a response by deadline