• GEOPOLITICAL CLIMATE
CANADA – CANADA EAST, QUEBEC
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Contingency planning and risk management: Developing multiple scenarios based on different potential outcomes helps in understanding the implications of various political and economic changes and can help identify potential risks and opportunities and develop strategies and resources to address them. Stay informed: Keeping up to date with global economic and geopolitical trends is crucial for making informed decisions, help anticipate changes, understand their potential impacts, and adjust strategies accordingly. Organisational engagement: Promoting a forward-thinking culture by encouraging ongoing learning and development within an organisation helps the business quickly adapt to new challenges and opportunities.
Employee buy-in is essential to ensure changes in the business environment can be faced and addressed quickly. Encouraging and cultivating a corporate culture that values flexibility and innovation is critical through employee training aimed at adapting to new circumstances and embracing change.
can help mitigate risks associated with sudden policy shifts that could disrupt business operations. Additionally, diversifying investments across different regions and sectors can also mitigate risks associated with political instability in any one area and ensure that businesses are not overly dependent on a single market or regulatory area. Failing to stay informed of geopolitical and policy changes can pose significant risks to business owners, especially those in sensitive industries. The result could be facing unexpected regulatory legislation, changes in tariffs on exported goods, or changes in trade agreements that could disrupt supply chains and increase costs. Changes in investment policies can create significant barriers to entry on goods or access to suppliers. In extreme instances, businesses may be faced with sanctions or restrictions that restrict or prevent their operations in a specific market, or trading with certain customers or suppliers.
BERTANI is a boutique audit, tax and advisory firm located in Toronto, Canada. Founded in 2001, BERTANI specialises in both inbound and outbound foreign direct investment. Through our soft-landing program, we routinely advise foreign corporations with their investment into and continuing operations in the North American market. As a member firm of IR Global, BERTANI is connected to over 1200 collaborative member firms in over 155 countries covering 70 practices areas across the globe, allowing our clients to be ideally positioned for their global expansion strategy. GLOBAL BRANDS • LOCAL MARKETS reflects our goals that our clients, whether foreign or domestic, are able expand their brand globally, yet take a localised approach to the markets they expand
Outlook for businesses in Canada in 2025 and beyond The upcoming United States and
Canadian elections will play a significant role in shaping economic policies and trade relations given the close relationship the two countries share. Canada and the United States are each other’s largest trading partners with nearly $3.6 billion (US $2.7 billion) worth of goods crossing the boarder each day in 2023. 3 Depending on the election outcomes, there could be shifts in tax policies, trade policy, investment and immigration policy, trade agreements, and regulatory frameworks. Businesses should prepare for potential changes in these areas. Changes also can lead to opportunity. When the United States imposed stricter immigration policies which made H-1B visas more difficult to renew, companies, particularly in the IT industry, with high mobility needs saw opportunity in Canada which had more flexible immigration policies resulting in increased foreign investment into Canada.
predict the extent of the pandemic, understanding the vulnerability of supply chains is critical to mitigating risk and being prepared for future disruptions. Recent global events have highlighted the importance of maintaining agility. The Russia-Ukraine conflict has caused major disruptions in global supply chains and supply routes especially in the energy, food, and semiconductor industries. It has also resulted in resource shortages, higher transportation costs, and increased inflation. Similarly, China’s growing interest in Taiwan and the surrounding region has sparked concerns about potential disruptions in the South Pacific. A conflict in the Taiwan Strait could not only disrupt the flow of trade in the region, but also global trade, particularly in the semiconductor sector, as Taiwan is a key producer of these components. Such
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Maintaining agility in the face of legislative changes
Harris presidency on Canada highlight the importance of staying informed and engaged in advocacy. Businesses must be prepared to navigate the complexities of international trade and regulatory changes. By understanding the potential implications of different election outcomes, businesses can develop strategies to mitigate risks and capitalise on opportunities. Impact of a potential Canadian election Domestically, a possible Canadian federal election in 2025 could bring about significant changes for businesses. The election results could shape fiscal policies, regulations, and economic priorities. Canada’s political landscape is also influenced by regional factors. Policies that benefit certain provinces or industries could create imbalances and affect business operations across different regions. Ontario is focused on technology and manufacturing whereas Alberta and western provinces are more focused on the energy sector– each favouring very different policy approaches.
protectionist policies including imposing tariffs on Canadian goods. During the first Trump term, Canadian steel and aluminum were subject to tariffs, and a renegotiation of the North American Free Trade Agreement (NAFTA) into the United States-Mexico-Canada Agreement (USMCA or CUSMA) involved significant lobbying by many industry groups, particular by the automotive industry to ensure fair treatment in the revised agreement. The USMCA is up for review in 2026. A continuation of this protectionist approach could disrupt trade and increase costs for Canadian exporters and impact potential investment. Tariffs on imports would hit Canada’s economy harder than the US’s, affecting sectors like manufacturing and agriculture. In addition, Trump’s position on migration could lead to stricture cross-border policies, impacting industries reliant on labour mobility. In contrast, a Kamala Harris presidency would likely continue the Biden administration’s policies, which have been more favourable to international cooperation and trade. The potential impacts of a Trump or
Businesses must implement flexible and fluid strategies to remain agile and responsive to changes in legislation and policymakers. Developing flexible business plans that can be quickly adjusted in response to new regulations or geo-political influences is critical to ensuring an organisation can minimise disruption and mitigate risk. This includes having contingency plans and alternative strategy options prepared based on various scenarios, as well as the resources to implement them. It also allows organisations to identify opportunities in periods of volatility and disruption. For example, if a new government imposes stricter environmental regulations, a business should have a plan to comply with these regulations without significant disruption to operations. Similarly, if trade policies change, businesses should be prepared to adjust their supply chains and sourcing strategies accordingly. The need for this preparedness was made evident during the pandemic when organisations were faced with significant supply chain disruptions resulting in product shortages. Although it was difficult to
Conclusion In a year of significant elections and geopolitical shifts, businesses and individuals must be ready to navigate uncertainty. Staying informed, engaging in advocacy, and maintaining agility are key to responding effectively to new governments and legislative changes. The outlook for Canadian businesses in 2025 and beyond will depend on not only election outcomes, but also other geopolitical events. As seen during the pandemic, the global economy is interconnected, and businesses must be prepared for these challenges to remain competitive and resilient. By adopting a proactive approach, businesses can navigate uncertainty and position themselves for success in 2025 and beyond.
Trump vs. Harris: Potential impacts on Canada
The outcome of the US election could have a significant impact on Canada due to the deep economic and political ties between the two countries. A change in administration could lead to major shifts in trade policies impacting multiple industries. Vehicles are Canada’s second largest export by value at $51 billion in 2023 of which 93% of these exports are going to the United
disruptions underscore the need for businesses to have resilient
contingency plans and adaptable strategies.
Investing in and leveraging technology is another crucial aspect of maintaining agility to enhance
States. The automotive industry is highly integrated, with parts and components crossing the Canadian-US-Mexico borders up to 8 times before being installed on final assembly. 4 A Trump administration is likely to continue his approach on
operational efficiency and adaptability. Digital tools can help monitor regulatory changes and streamline compliance processes.
1 The Ultimate Election Year: All the Elections Around the World in 2024, Time Magazine, December 28, 2023. 2 UK Press Release “New Government drives forward trade talks to turbocharge economic growth” 3 Canada-US Relations 4 Canadian Vehicle Manufacturing Association, Important Facts.
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