Although Canadians do not vote in American elections, we will be affected by the outcome. Above all, we need to understand that, quite apart from emotional preferences we may have about the candidates for president, domestic political and economic American interests will ultimately trump the value of any bilateral relationship.

The times when the personal chemistry between our respective leaders has contributed to major achievements are the exception, not the norm. The better choice for Canada will be the candidate who is more likely to fix the fiscal mess in the U.S. and restore robust economic growth — with obvious dividends for America’s largest trade partner. The challenge is daunting for whoever wins.

The U.S. economy is struggling and failing to generate much in the way of new jobs and real growth. The U.S. is living far beyond its means, borrowing a quarter of what it spends. The national debt is a staggering 16 trillion dollars. That’s slightly more than total U.S. GDP (102 per cent) and double what it was in 1988.

However, that figure pales in comparison to the $222 trillion in unfunded liabilities that come from Medicare, Social Security, and other entitlement programs. As the full impact of President Barack Obama’s new health care program kicks in, that figure will only grow.

The United States is the most heavily indebted nation on earth — even worse than Greece. Its political system of “checks and balances” has been delivering far more cheques than balance in a manner that is ultimately unsustainable. As Condoleeza Rice observed at the Republican convention: “A nation that loses control of its public finances ultimately loses control of its destiny.”

Canadians have followed this election closely. Most Canadians, roughly two-thirds, hope that President Obama wins today’s contest. Canadians tend to be more “comfortable” with Democrats than with Republicans (Kennedy, Clinton and Obama have all been more popular than Republican presidents), despite the fact that there actually have been more significant bilateral achievements with Republicans than with Democrats.

Under President Dwight Eisenhower, for example, we jointly harnessed our energies to build the St. Lawrence Seaway. With President Ronald Reagan came the Canada-U.S. Free Trade Agreement, the most significant undertaking in the past three decades. With President George H.W. Bush came NAFTA and an agreement to curb acid rain.

Notwithstanding Obama’s unprincipled Keystone veto, his grudging, late-in-the-game admission of Canada and Mexico to the Trans Pacific Partnership (and that only after we rapped our knuckles raw beating on the door) violated the spirit of our NAFTA partnership. In the face of Congress’s Buy America provisions, which have hurt Canada, and what increasingly looks like a second bridge to nowhere across the Detroit River (even after we offered to pay the entire cost), his administration has been essentially AWOL on U.S.-Canada issues. Relations generally have been studiously correct rather than productive.

The only mention of Canada in this election campaign was Mitt Romney’s strong endorsement of the Keystone pipeline and his observation in the presidential debates that our corporate tax rates are lower. Foreign policy has rarely been central to this campaign. The desperate state of the American economy has been center stage.

As we await the outcome of this epic contest, however, we should be guided more by reason and pragmatic instinct, rather than emotions or “likeability.” We are obliged to deal in our own best interest with whoever wins.

The fragile state of the U.S. economy and the political gridlock in Washington (which underscores a lack of effective leadership) — these should be the key concerns for Canadians.

Campaign rhetoric from both Republican and Democratic camps does not provide for a great deal of hope on the matter.

Obama’s message has been to stay the course on spending while raising taxes on the rich. The problem is that higher taxes on the rich won’t close the gap between federal expeditures and revenues and Obama has been vague on what else he would do — especially on how massive entitlement programs can be sensibly reformed.

The Republican plan to close tax loopholes to increase federal revenues is no better. It too is patchy on details and offers little more than the hope that a growing economy would, in itself, increase badly-needed revenue.

Something like the Bowles-Simpson recommendations will be essential to breaking the budget impasse but, in Washington these days, “compromise” is a four-letter word. The entrenched political divide that has prevented any meaningful consensus on fundamental change likely will persist no matter who wins the presidency and few expect any significant change from the Congressional races.

Federal Reserve Chairman Ben Bernanke has warned repeatedly that successive rounds of quantitative easing by the Federal Reserve to stimulate growth constitute only a temporary, stopgap measure. If the U.S. continues to avoid real remedies, it can only mean high inflation and high interest rates from which Canada cannot be immune.

There is a simple bottom line for Canada the day after America’s election. We will have to be vigorous in defence of our complex interests with the U.S. with a new administration and Congress, regardless of the outcome. But this is also time to move beyond our inclination toward a “special” relationship with Washington.

As we brace ourselves for the worst — for what could happen if the U.S. does not get its fiscal house in order, such as new forms of protectionism — we must also focus strategically on the major gains that can be derived from a sharper focus on trade and investment links with select emerging markets. We need a healthier, more mature and balanced approach to global affairs, one that would also strengthen our hand in Washington.

That is the real meaning of this election for Canada.

The better choice for Canada will be the candidate who is more likely to fix the fiscal mess in the U.S. and restore robust economic growth — with obvious dividends for America’s largest trade partner.
The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.