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Nanos on Canada's Economy (Audio) · Bloomberg Intelligence

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  Speaker 1: This is Taking Stock with Kathleen Hayes and Pim Fox
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  Speaker 1: on Bloomberg Radio. A special live broadcast today of taking
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  Speaker 1: Stock live from the National Bank of Canada Fixed Income
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  Speaker 1: Conference at Bloomberg World Headquarters. Were very happy now to
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  Speaker 1: introduce another Canadian. What a surprise he is, somebody who
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  Speaker 1: did a survey in college that led to him starting
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  Speaker 1: one of the largest research survey companies in Canada. Nick
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  Speaker 1: Nanos is chairman of the Nanos Research Corporations. You can
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  Speaker 1: follow them on Twitter at Nick Nanos. And his first
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  Speaker 1: company that sort of really got him going in terms
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  Speaker 1: of doing surveys and research was when Staples approached him
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  Speaker 1: as a young man to have to have them him
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  Speaker 1: do some work for them. And you've grown so much. Nick,
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  Speaker 1: Welcome to taking Stock. It's great to join you. We're
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  Speaker 1: gonna talk about elections in the US and how that
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  Speaker 1: could affect what's happening in Canada, the Canadian economy in particular.
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  Speaker 1: I'd like to step back for a minute though, because
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  Speaker 1: one of the things um that you do is the
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  Speaker 1: Bloomberg Nanos Canadian Confidence Index. How do Canadians feel about
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  Speaker 1: their own present and future when it comes to the
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  Speaker 1: economy right now. Well, it's interesting when we look at
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  Speaker 1: the Bloomberg Nanos Confidence Index, and that's tracked every week.
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  Speaker 1: What we've seen in the last number of weeks is
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  Speaker 1: a significant drop in the proportion of Canadians that are
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  Speaker 1: confident about the value of real estate. And you know what,
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  Speaker 1: in Canada, real estate has been that one piece of
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  Speaker 1: good news for Canadians, regardless of what's happened in the market,
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  Speaker 1: regardless of the price of oil they've held onto. You
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  Speaker 1: know what, doesn't matter what happens. The value of my
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  Speaker 1: home will either keep its value or it will go up.
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  Speaker 1: We've seen basically a six year high and negative views
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  Speaker 1: on real estate just in the last three weeks. And
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  Speaker 1: this has coincidentally been with the Province of British Columbia
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  Speaker 1: out west saying that putting a chill on foreign buyers
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  Speaker 1: of real estate. So get a load of that. So
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  Speaker 1: not great news on that front. So foreign buyers, let's
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  Speaker 1: say in Vancouver, for example, tell me about what's going
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  Speaker 1: on with consumer debt and the high deficits provincial debt.
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  Speaker 1: I mean, the head wins some of the things that
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  Speaker 1: Canada faces, and then maybe relate that to what you'd
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  Speaker 1: like to, uh see as a result of maybe the
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  Speaker 1: US election for Canada. You know, the interesting thing is that,
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  Speaker 1: you know, when we survey Canadians, you know, the federal
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  Speaker 1: the new liberal Justin Trudeau government has taken on a
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  Speaker 1: larger deficit than planned during the election. Canadians are okay
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  Speaker 1: with that, but if there's a significant increase in the
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  Speaker 1: in the national deficit, it will be tough news. Also, recently,
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  Speaker 1: very interestingly, there's a new child benefit tax that has
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  Speaker 1: been kind of reigning checks in Canada right across the border.
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  Speaker 1: You know, the government wants to think that this is stimulus,
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  Speaker 1: that if people have these new checks in their pocket,
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  Speaker 1: that they're going to spend more money on new spending.
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  Speaker 1: But in a recent Bloomberg Nanal survey that we've just
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  Speaker 1: released in the last few days, only sixteen cents on
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  Speaker 1: the dollar is going to go towards new spending. Canadians
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  Speaker 1: are taking that check and they're saving it, They're paying bills,
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  Speaker 1: they're paying down their debts, so not as much of
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  Speaker 1: a mulists at this point. From that new child benefit
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  Speaker 1: tax that the Liberals are hoping to kind of jump
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  Speaker 1: start the Canadian economy. That sounds like what happened in
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  Speaker 1: the US coming out of our Great recession and the
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  Speaker 1: financial crisis. People paid down a lot of debt. That
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  Speaker 1: certainly creates a good stable foundation. When you look at
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  Speaker 1: the election, you look at Hillary Clinton, you look at
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  Speaker 1: Donald Trump, you see what Canada needs. We just heard
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  Speaker 1: Jim Prentice, from our Premier of Alberta, tell us that
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  Speaker 1: Canada needs access to global markets, needs pipelines. What what
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  Speaker 1: what are you looking for anticipating in the US elections
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  Speaker 1: and the impact on Canada. Well, Canadians are fixated on
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  Speaker 1: the US presidential election. It's kind of like listening to
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  Speaker 1: your neighbors family argue loudly. You're attracted and repelled, and
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  Speaker 1: then afterwards you're worried about what it means to you. Right,
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  Speaker 1: That's that's basically kind of in a nutshell, you know
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  Speaker 1: for Canadians. U s presidential elections usually don't deal with
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  Speaker 1: issues that affect Canada. But the border, you know, we
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  Speaker 1: talked about the border with Mexico and Canada that Trump
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  Speaker 1: has put on the table and free trade. You know,
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  Speaker 1: he's put about NAFTA and potentially tearing up or renegotiating NAFTA.
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  Speaker 1: So for the first time in history. I would say
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  Speaker 1: the US president presidential election has had issues that Canadians
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  Speaker 1: are tuned into. And uh, you know, if I have
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  Speaker 1: if I have a prediction, uh you know, say, for example,
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  Speaker 1: if there's a Donald Trump win, we'll probably have a
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  Speaker 1: thirty day consumer confidence chill as Canadians wonder what's gonna
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  Speaker 1: happen in AFTA, what's going to happen in the border,
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  Speaker 1: because you know, here's a little factoid for Bloomberg listeners
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  Speaker 1: of Canadians live within one hour of the US border,
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  Speaker 1: so we are fixated on that U s border and
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  Speaker 1: moving across that border. So depending on the outcome, we
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  Speaker 1: could have a significant kind of what I'll say, confidence
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  Speaker 1: hit in Canada come November, depending on who wins the
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  Speaker 1: presidential race. Speak if you can about the potential for
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  Speaker 1: a change in energy policy in the United States and
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  Speaker 1: how that might affect Canada. You know, the interesting thing is,
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  Speaker 1: for a polling that we do with the State University
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  Speaker 1: of New York, about more than eight out of every
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  Speaker 1: ten Americans and eight out of every ten Canadians want
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  Speaker 1: cooperation on energy issues and see kind of a continental
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  Speaker 1: market and but kind of Canadians like Americans want to
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  Speaker 1: have kind of what i'll say, environmental stewardship for it
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  Speaker 1: to be environmentally responsible. You know, the Liberal government has
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  Speaker 1: a very in Canada, has a very tall order to
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  Speaker 1: kind of fulfill because they've gone hard on the environment
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  Speaker 1: and it's made kind of Western Canada very nervous because
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  Speaker 1: of that flat price of a barrel of oil and
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  Speaker 1: jobs that have been lost. So you know, I think
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  Speaker 1: probably what we're gonna what we're gonna expect is, you know,
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  Speaker 1: the Liberals to kind of deliver on one pipeline. But
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  Speaker 1: that just means there's a pipeline, doesn't mean there'll be
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  Speaker 1: anything in it, because only the market will decide what
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  Speaker 1: happens once the pipeline is there. Well done, Thanks very much.
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  Speaker 1: And Nick nanos He is the chairman of Nanos, a
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  Speaker 1: research group of companies Global Fellow at the Woodrow Wilson
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  Speaker 1: International Center for Scholars. You're listening to taking Stock at
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  Speaker 1: the fourth Annual Canadian Fixed Income Conference. This is Bloomberg