WEBVTT - Nanos on Canada's Economy (Audio)

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<v Speaker 1>This is Taking Stock with Kathleen Hayes and Pim Fox

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<v Speaker 1>on Bloomberg Radio. A special live broadcast today of taking

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<v Speaker 1>Stock live from the National Bank of Canada Fixed Income

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<v Speaker 1>Conference at Bloomberg World Headquarters. Were very happy now to

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<v Speaker 1>introduce another Canadian. What a surprise he is, somebody who

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<v Speaker 1>did a survey in college that led to him starting

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<v Speaker 1>one of the largest research survey companies in Canada. Nick

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<v Speaker 1>Nanos is chairman of the Nanos Research Corporations. You can

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<v Speaker 1>follow them on Twitter at Nick Nanos. And his first

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<v Speaker 1>company that sort of really got him going in terms

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<v Speaker 1>of doing surveys and research was when Staples approached him

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<v Speaker 1>as a young man to have to have them him

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<v Speaker 1>do some work for them. And you've grown so much. Nick,

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<v Speaker 1>Welcome to taking Stock. It's great to join you. We're

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<v Speaker 1>gonna talk about elections in the US and how that

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<v Speaker 1>could affect what's happening in Canada, the Canadian economy in particular.

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<v Speaker 1>I'd like to step back for a minute though, because

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<v Speaker 1>one of the things um that you do is the

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<v Speaker 1>Bloomberg Nanos Canadian Confidence Index. How do Canadians feel about

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<v Speaker 1>their own present and future when it comes to the

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<v Speaker 1>economy right now. Well, it's interesting when we look at

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<v Speaker 1>the Bloomberg Nanos Confidence Index, and that's tracked every week.

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<v Speaker 1>What we've seen in the last number of weeks is

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<v Speaker 1>a significant drop in the proportion of Canadians that are

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<v Speaker 1>confident about the value of real estate. And you know what,

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<v Speaker 1>in Canada, real estate has been that one piece of

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<v Speaker 1>good news for Canadians, regardless of what's happened in the market,

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<v Speaker 1>regardless of the price of oil they've held onto. You

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<v Speaker 1>know what, doesn't matter what happens. The value of my

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<v Speaker 1>home will either keep its value or it will go up.

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<v Speaker 1>We've seen basically a six year high and negative views

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<v Speaker 1>on real estate just in the last three weeks. And

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<v Speaker 1>this has coincidentally been with the Province of British Columbia

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<v Speaker 1>out west saying that putting a chill on foreign buyers

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<v Speaker 1>of real estate. So get a load of that. So

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<v Speaker 1>not great news on that front. So foreign buyers, let's

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<v Speaker 1>say in Vancouver, for example, tell me about what's going

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<v Speaker 1>on with consumer debt and the high deficits provincial debt.

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<v Speaker 1>I mean, the head wins some of the things that

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<v Speaker 1>Canada faces, and then maybe relate that to what you'd

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<v Speaker 1>like to, uh see as a result of maybe the

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<v Speaker 1>US election for Canada. You know, the interesting thing is that,

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<v Speaker 1>you know, when we survey Canadians, you know, the federal

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<v Speaker 1>the new liberal Justin Trudeau government has taken on a

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<v Speaker 1>larger deficit than planned during the election. Canadians are okay

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<v Speaker 1>with that, but if there's a significant increase in the

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<v Speaker 1>in the national deficit, it will be tough news. Also, recently,

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<v Speaker 1>very interestingly, there's a new child benefit tax that has

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<v Speaker 1>been kind of reigning checks in Canada right across the border.

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<v Speaker 1>You know, the government wants to think that this is stimulus,

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<v Speaker 1>that if people have these new checks in their pocket,

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<v Speaker 1>that they're going to spend more money on new spending.

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<v Speaker 1>But in a recent Bloomberg Nanal survey that we've just

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<v Speaker 1>released in the last few days, only sixteen cents on

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<v Speaker 1>the dollar is going to go towards new spending. Canadians

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<v Speaker 1>are taking that check and they're saving it, They're paying bills,

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<v Speaker 1>they're paying down their debts, so not as much of

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<v Speaker 1>a mulists at this point. From that new child benefit

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<v Speaker 1>tax that the Liberals are hoping to kind of jump

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<v Speaker 1>start the Canadian economy. That sounds like what happened in

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<v Speaker 1>the US coming out of our Great recession and the

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<v Speaker 1>financial crisis. People paid down a lot of debt. That

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<v Speaker 1>certainly creates a good stable foundation. When you look at

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<v Speaker 1>the election, you look at Hillary Clinton, you look at

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<v Speaker 1>Donald Trump, you see what Canada needs. We just heard

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<v Speaker 1>Jim Prentice, from our Premier of Alberta, tell us that

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<v Speaker 1>Canada needs access to global markets, needs pipelines. What what

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<v Speaker 1>what are you looking for anticipating in the US elections

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<v Speaker 1>and the impact on Canada. Well, Canadians are fixated on

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<v Speaker 1>the US presidential election. It's kind of like listening to

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<v Speaker 1>your neighbors family argue loudly. You're attracted and repelled, and

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<v Speaker 1>then afterwards you're worried about what it means to you. Right,

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<v Speaker 1>That's that's basically kind of in a nutshell, you know

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<v Speaker 1>for Canadians. U s presidential elections usually don't deal with

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<v Speaker 1>issues that affect Canada. But the border, you know, we

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<v Speaker 1>talked about the border with Mexico and Canada that Trump

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<v Speaker 1>has put on the table and free trade. You know,

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<v Speaker 1>he's put about NAFTA and potentially tearing up or renegotiating NAFTA.

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<v Speaker 1>So for the first time in history. I would say

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<v Speaker 1>the US president presidential election has had issues that Canadians

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<v Speaker 1>are tuned into. And uh, you know, if I have

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<v Speaker 1>if I have a prediction, uh you know, say, for example,

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<v Speaker 1>if there's a Donald Trump win, we'll probably have a

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<v Speaker 1>thirty day consumer confidence chill as Canadians wonder what's gonna

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<v Speaker 1>happen in AFTA, what's going to happen in the border,

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<v Speaker 1>because you know, here's a little factoid for Bloomberg listeners

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<v Speaker 1>of Canadians live within one hour of the US border,

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<v Speaker 1>so we are fixated on that U s border and

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<v Speaker 1>moving across that border. So depending on the outcome, we

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<v Speaker 1>could have a significant kind of what I'll say, confidence

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<v Speaker 1>hit in Canada come November, depending on who wins the

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<v Speaker 1>presidential race. Speak if you can about the potential for

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<v Speaker 1>a change in energy policy in the United States and

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<v Speaker 1>how that might affect Canada. You know, the interesting thing is,

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<v Speaker 1>for a polling that we do with the State University

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<v Speaker 1>of New York, about more than eight out of every

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<v Speaker 1>ten Americans and eight out of every ten Canadians want

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<v Speaker 1>cooperation on energy issues and see kind of a continental

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<v Speaker 1>market and but kind of Canadians like Americans want to

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<v Speaker 1>have kind of what i'll say, environmental stewardship for it

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<v Speaker 1>to be environmentally responsible. You know, the Liberal government has

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<v Speaker 1>a very in Canada, has a very tall order to

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<v Speaker 1>kind of fulfill because they've gone hard on the environment

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<v Speaker 1>and it's made kind of Western Canada very nervous because

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<v Speaker 1>of that flat price of a barrel of oil and

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<v Speaker 1>jobs that have been lost. So you know, I think

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<v Speaker 1>probably what we're gonna what we're gonna expect is, you know,

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<v Speaker 1>the Liberals to kind of deliver on one pipeline. But

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<v Speaker 1>that just means there's a pipeline, doesn't mean there'll be

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<v Speaker 1>anything in it, because only the market will decide what

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<v Speaker 1>happens once the pipeline is there. Well done, Thanks very much.

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<v Speaker 1>And Nick nanos He is the chairman of Nanos, a

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<v Speaker 1>research group of companies Global Fellow at the Woodrow Wilson

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<v Speaker 1>International Center for Scholars. You're listening to taking Stock at

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<v Speaker 1>the fourth Annual Canadian Fixed Income Conference. This is Bloomberg