Why Canada-EU ties matter for advisors

There are practical and political challenges in Canada, too. Namely that energy exports to Europe would require the construction of a liquefied natural gas (LNG) terminal somewhere on the Atlantic. With Quebec’s stated opposition to pipelines carrying oil and natural gas across that province, LNG exports may have to go through the port of Churchill and refined petroleum may be limited to Atlantic Canadian sourced oil.

What EU ties might mean for client lifestyles

The politics that underpin Canadian and European willingness to find some kind of a deal can also be seen in a shift in Canadian culture. A survey from the Angus Reid Institute released in August, found that 48 per cent of Canadians now hold “unfavourable” views of Americans. 65 per cent of Canadian respondents said the US should be approached “cautiously,” or as a “potential threat.” Those shifting emotions have practical considerations for Canadians and their advisors, especially for the roughly one million Canadians who spend the winter in the United States. Those snowbirds may now be looking for new destinations, and warmer parts of Europe like Portugal, Greece, and Spain might hold a lot of appeal.

Mc Mahon believes that advisors should prepare to field questions about snowbirds spending long stretches of time in Europe, underpinned by both cultural shifts and the relative strength of the Canadian Dollar against the Euro. He says advisors may want to watch for details of any visa liberalization or extensions beyond the current 90 days in 180 that Canadians get in the Shengen zone.

What to watch for

The details of Canada’s eventual agreement with the EU will matter a great deal, Mc Mahon says, and he will be watching closely for those details to emerge. They will come in any eventual draft agreements, but also through investments by European companies in Canadian infrastructure. He’s watching for how Canada grows in the EU’s trading relationships and how the volume of Canadian goods imported to the EU may change. He’s also watching to see whether the new incentives that Prime Minister Carney announced for investments in Canada attract more European capital to our shores. Those kind of free market moves, he says, could cement closer ties before any trade deal is signed or ratified. While he says that advisors should pay attention to these emerging details, they can also lean on this relationship as a sign that Canada’s economic position is not as dire as the news can sometimes imply. 

“You want to help your clients manage their emotions, and in this case there could be another signal that Canada’s economy is going to do fine,” Mc Mahon says. “Advisors’ clients are worries about all of the news that we hear. People see these things and think that the world’s going to hell and Canada’s economy is in the gutters. But when you look at the data, the economy is doing quite well given the circumstances… We can be realistically optimistic about Canada’s economy and see this as a sign that at the end of the road we’re going to hit a different model, which should be more solid because it’s broader and more secure than the model we had before.”