US Debt May Lead To Still Fewer Jobs In Canada. Immigrants May Be Affected The Most
The world’s largest economy, USA is currently looking at a debt crisis. Surprising many but not expert researchers, Washington is under tremendous pressure to pay up all of its bills. Unfortunately, around August 10, as predicted by Barclays Capital, the treasury will have run out of cash. This is creating furor in the House of Representatives, with debates to raise the borrowing limit of the country. This financial meltdown is likely to take Canada in its clutches.
What To Expect If The Deal Isn’t Struck: If the ceiling is not raised, the Feds will have to cut their expenses by 40%, affecting day to day activities of the government. In addition, if USA defaults on loan payments, this could have serious repercussions on global economy because more than 20% of world GDP comes from America.
Also, the credit ratings of US will go down and this could send interest rates spiraling, further slowing down the obstacle ridden growth the country has been attempting since the great recession of2007.
Opposing the idea of upping the debt limit is the fact that this is just a way to delay the impending and inevitable credit catastrophe because ultimately, it will just widen the deficit gap which the country must close up before too long.
Neighbors Voice Their Concerns:
Canada is especially anxious over the financial debt crisis taking hold of their Southern neighbors. It is speculated that any damages incurred by USA in the coming days will eventually trickle down to Canada, their largest business partner and ultimately affect the whole world over time.
Owner of Fairmount books in Canada, Cutler says about the situation, "You're the elephant and we're the mouse: when you roll over we can get crushed." It takes no rocket science to understand that if Americans suffer a debt crisis, it would not leave Canada unscathed. Toronto Stock Exchange dropped down by 450 points, closing at the month’s lowest index amid talks of debt ceiling.
Avery Shenfield, chief economist at Canadian Imperial Bank of Commerce reiterates that while there is a widespread pride in Canada’s financial policies and decisions, the country cannot pretend to be unaffected by their neighbors woes. Finance Minister Jim Flaherty observed that while Canada is well on its way to a balanced budget by 2014 unlike USA and most European countries, it might still end up bearing the brunt of debt saddled business partners in these countries.
Canadian experts opine that in the worst case scenario, one in five jobs in Canada will suffer and this would affect immigrants in major ways because most of them are employed in industries deeply involved in trades and collaborations with USA. In addition, immigrants are likely to lose their jobs given protectionist views of the Canadian community.