The NAFTA uncertainty is restricting the companies from making new investments, according to Bill Morneau, the Canadian Finance Minister.
The Finance Minister made the statement during the news conference in Toronto. Earlier, the Bank of Canada issued a warning. This elevated the uncertainty about the North American Free Trade Agreement. There is a feeling that it is going to slow down the investments in the country.
The ongoing NAFTA discussions are making the companies increasingly hesitant in making the investment is the opinion of the Central Bank Governor, Stephen Poloz.
According to Poloz, the uncertainty is forcing the firms to redirect the investment plans for the South of the country’s border. Recently the US has made a business-friendly tax reforms. He estimates that the current situation will lead to reduced investments by the end of 2019. The expected reduction is 2%.
Morneau is of opinion that the concern over trade policy decisions reinforces the fact that NAFTA has been a big encouragement for the Canadian economy. This also shows that the investments are completely aware of the benefits offered by the dealer.
After his meeting with his Mexican counterpart, Jose Antonio Gonzalez Anaya, Morneau said that any perspective change will cause the people to pause for a while.
The sixth round of NAFTA negotiations is scheduled for the last week of January. Even during these concerns, the Bank of Canada has increased its interest rate.