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Democrat or Republican: guess which U.S. party is better for Canada’s economy

The White House in Washington, D.C.

Chris Hannay/The Globe and Mail

The world will be watching when Americans cast their ballots tomorrow in the U.S. presidential election, and few countries are as deeply invested in the result as Canadians. The polls suggest that Canadians are heavily leaning towards the re-election of Barack Obama, but have we done better or worse with a Democrat in the White House?

Global popularity

Many polls have been released over the last few weeks showing that Mr. Obama, the Democratic incumbent, is heavily favoured over the Republican candidate, Mitt Romney, throughout the globe. (Though the results from U.S. voters will be significantly closer.)

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Canada is no different. The average result of three polls released over the last week or so suggests that about 72 per cent of Canadians would cast their ballot for Mr. Obama, while only 10 per cent would opt for Mr. Romney. By American electoral standards, that puts Canada somewhere between Vermont and Washington, D.C., the two most Democrat-friendly parts of the United States.

Mr. Obama is popular in Canada, in part because he is seen as a much better fit with Canadians' values than Mr. Romney. But putting those issues aside, a look at some economic indicators suggests that Canadians have also done better when the president is a Democrat rather than when he is a Republican.

Who benefits Canada?

Canadian annual GDP growth has averaged 3.1 per cent per year during Democratic presidencies since 1972, compared to growth of 2.7 per cent during Republican administrations. But annual growth in GDP has been lowest, on average, when different parties control the House of Representatives and the Senate – a likely outcome of Tuesday's vote.

(Read the infographic)

In terms of Canada's merchandise trade balance with the United States, the real dollar value of it has grown by an average of 31 per cent per year since 1971 under Democratic presidents, compared to average annual growth of 8 per cent with Republicans in the White House. And while the real value of Canada's merchandise trade balance with the U.S. increased in about three-quarters of years with a Democrat president since 1971, that balance was almost as likely to decrease as it was to increase under a Republican president.

Americans have invested more in Canada under the Democrats as well. Since 1988, the real dollar value growth in American direct investment into Canada has averaged 7.6 per cent per year under Democrats, compared to 1.6 per cent under Republicans.

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Travel between our two countries has also been greater when the Democrats were in power. Over the last 40 years, an average of 35 million trips was made to Canada from the U.S. under Democrats, while 34.3 million were made on average under Republicans. Travel to the United States from Canada has also been higher: 45.2 million travelers per year when the President was a Democrat, compared to 42.7 million when he was a Republican.

Mixed signals

But not every indicator points to a better experience with the Democrats. Annual unemployment has averaged 8.5 per cent in this country since 1976 regardless of the party in power, soaring into the double-digits under both Bill Clinton and Ronald Reagan.

And while the aggregate is more positive under Democrats, Canada's experience since Mr. Obama took office has not been as rosy (though much of that is due to circumstances that existed before he was elected). Most indicators have been worse over the last few years than they were under George W. Bush. Travel to the United States, however, has increased and the other indicators have been improving since the collapse at the end of 2008.

From a political perspective, over the last 40 years the federal Liberals have done better with a Democratic president while the Conservatives have won more elections when the president was a Republican. In Ontario, however, the opposite is true, and in Quebec the Parti Québécois has won all three of the elections that were held during Democratic presidencies since the provincial party was formed.

While the polls suggest that the result will be close, Barack Obama is leading in enough states to give him the edge in the Electoral College that will decide the election. If he does win, the vast majority of Canadians will be pleased with that result, and despite the difficulties of the last few years it seems that Canada is more likely to prosper with a Democrat in the White House than the alternative.

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Éric Grenier writes about politics and polls at

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