How Will Donald Trump's Presidency Affect Canadians

As President Trump reclaims the Oval Office on January 21st, 2025, Canada’s economic, political, and social landscapes may experience ripple effects from his policies south of our border. Canada and the United States share one of the largest trade relationships globally, with significant interdependence in energy, trade, and immigration. Trump’s policies could reshape dynamics in these areas, impacting Canadian homeowners, businesses, and consumers alike.

Key Areas of Impact By Trump's Presidency

1. Housing Market and Real Estate

Trump’s presidency could influence Canada’s housing market in several ways:

Economic Slowdowns and Housing Demand: If Trump’s policies lead to economic uncertainty or a slowdown in the US, Canada’s export-driven economy could feel the effects. This might reduce employment rates, subsequently cooling housing demand.

Cross-Border Real Estate Investment: Changes in US tax policies or deregulation could make US real estate more attractive to Canadian investors, potentially diverting investments away from the domestic housing market. For instance, if US capital gains tax rates are lowered, Canadians might prefer investing in US properties over local markets.

Currency Fluctuations: A weaker Canadian dollar due to uncertain US policies could make it more expensive for Canadians to invest abroad while encouraging foreign buyers to purchase Canadian real estate. This could drive up housing prices in urban areas like Toronto and Vancouver.

2. Mortgage Rates and Affordability

Interest Rate Trends: The Bank of Canada’s decisions often mirror or respond to US Federal Reserve policies. If Trump’s presidency influences the Fed to maintain lower interest rates, Canadian mortgage rates could stay lower, benefiting first-time buyers and homeowners looking to refinance.

Inflationary Pressures: Economic shifts in the US might spur inflation in Canada, affecting housing affordability. For example, if inflation pushes interest rates higher, mortgage costs for Canadian homeowners could rise significantly.

3. Energy Policies and Their Housing Impact

Trump’s energy policies, such as reviving the Keystone XL pipeline, could impact energy prices in Canada. Lower energy costs might reduce home heating expenses, but increased focus on fossil fuels could hinder progress on green housing initiatives.

Potential Impact of Trump's Presidency on Canadian Homeowners

Economic uncertainties, changes in US tax policies, and currency fluctuations could impact housing demand and prices in Canada. Foreign investment and mortgage rates might also see significant shifts. Homeowners should monitor these factors to anticipate market trends.

Will Mortgage Rates in Canada Be Affected?

Yes, Trump’s presidency could indirectly influence Canadian mortgage rates. For instance, if the US Federal Reserve adopts a lower interest rate policy, the Bank of Canada might follow suit, making mortgages more affordable for Canadians. Conversely, inflationary pressures could push rates higher.

How Can Homeowners Prepare for Economic Shifts?

Canadian homeowners can take proactive steps to mitigate risks:

Lock in Low Rates: If mortgage rates are favorable, consider locking them in to avoid future increases.

Build Emergency Savings: Maintain a financial cushion to weather potential job losses or rising costs.

Diversify Investments: Avoid over-reliance on real estate by diversifying into other assets like stocks or bonds.

What Role Will Foreign Investment Play?

A weaker Canadian dollar might make Canadian properties more attractive to foreign investors, particularly in high-demand cities like Toronto and Vancouver. This could drive up housing prices, making it crucial for domestic buyers to act strategically.

Will Canadian Housing Policies Change?

While Trump’s presidency won’t directly influence Canadian housing policies, Canada might adjust immigration or economic strategies to address indirect impacts, such as shifts in labor markets or increased demand for housing.

Potential Impact of Trump's Presidency on Canadian Economy

Trade and Tariffs

Under Trump’s leadership, the US previously adopted protectionist policies, including imposing tariffs on Canadian aluminum and steel. If similar measures return, Canadian exporters could face higher costs, reducing competitiveness in the US market. For example, a 10% tariff on $10 billion of aluminum exports would result in $1 billion in additional costs.

Immigration and Labor

Tighter US immigration policies could increase Canada’s appeal as a destination for skilled immigrants. This could boost Canada’s labor market, especially in tech and healthcare sectors. However, restrictions on cross-border labor mobility might disrupt industries reliant on seamless worker exchanges.

Currency Exchange Rates

Historically, uncertainty in US policies has impacted the Canadian dollar. A volatile USD-CAD exchange rate could affect Canadian businesses and consumers, particularly in industries reliant on imports and exports.

What Canadians Can Anticipate

Donald Trump’s presidency in 2025 has the potential to significantly impact Canada across multiple dimensions, particularly in housing, trade, and economic policy. For Canadian homeowners, the housing market could experience shifts due to changes in mortgage rates, cross-border investments, and foreign buyer interest spurred by currency fluctuations. Homeowners should monitor these trends carefully and prepare by locking in favorable mortgage rates, building emergency savings, and diversifying their investments to ensure financial resilience.

On a broader scale, Trump’s economic policies could reintroduce trade tensions, particularly through tariffs that affect key Canadian exports like aluminum and steel. These trade disputes could disrupt industries and create ripple effects in employment and consumer spending. Additionally, US energy policies may influence costs for Canadian households, either through lower utility bills or delays in green energy adoption.

Finally, immigration policies could bring both challenges and opportunities. A stricter US stance on immigration may benefit Canada by attracting more skilled workers, but restrictions on cross-border mobility could disrupt industries dependent on seamless workforce exchanges. As these dynamics unfold, Canadian homeowners, businesses, and policymakers must remain agile, making informed decisions to navigate and capitalize on both the challenges and opportunities presented by Trump’s presidency.