US pressures may overshadow Canada's innovation budget

Significance

The government tabled its budget at the end of March, announcing major investments in skills development, innovation, the environment and infrastructure. The budget aims to strengthen the long-term growth potential of the Canadian economy. However, more immediate economic challenges are likely to occupy the administration of Prime Minister Justin Trudeau over the remaining three years of its electoral mandate.

Impacts

• Washington's free-market and protectionist push will hinder regulatory convergence with Canada.
• A likely cut to US corporation tax could erode Canada's competitive advantages.
• NAFTA negotiations are more likely to focus on technical tweaks to procurement and rules of origin than dramatic overhaul of its structure.