How the U.S. shutdown affects Canadians

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The Statue of Liberty will be closed and most of NASA's employees will head home, but elsewhere civil servants will stay on the job to keep 1.3 million lab mice alive.

Large swaths of the U.S. federal government shut down at midnight Monday after the House and Senate failed to find a compromise on a spending bill to fund the government.

Fear of the unknown largely summed up the concern of Canadian business leaders as they watched U.S. lawmakers march toward a government shutdown.

The potential for product delays at the border is the primary worry, given that a slowdown in trade would have a direct impact on the Canadian economy.

Washington has indicated that hundreds of thousands of federal employees will be exempted from the shutdown in order to maintain "essential" services.

WORRIES IN CANADA

Border crossings

While the U.S. government describes border officials as an essential service, the concern is that it simply isn't clear what will happen at border crossings and shipping ports now that the U.S. government has shut down.

"I don't think they know themselves [what will happen]," said Jayson Myers, president of Canadian Manufacturers and Exporters, a trade association. "Right now, the one big problem in the U.S. economy is this uncertainty that is surrounding the fiscal management of the largest economy in the world. Quite rightly, it is sending shivers through every business."

Business relationships

There is also a concern for Canadian businesses that deal directly with the U.S. government. Whether it is simply requesting a work visa or selling goods directly to the U.S. government, business leaders say there are many ways a shutdown could have a direct impact.

"There's a large number of businesses that actually sell to the U.S. government," said Dan Kelly, president of the Canadian Federation of Independent Business. "These kinds of things can be really tough for businesses to manage."

Economic spillovers

Canadian Chamber of Commerce president Perrin Beatty said Ottawa will need to stress the importance of keeping the border open during a shutdown.

"There is the potential obviously that any slowdown in the U.S. affects Canada when 70 per cent of our trade is being done with the U.S.," he said.

Craig Wright, RBC's chief economist, estimates that if the U.S. government were to shut down for a month, it would lead to a 0.25-per-cent reduction in GDP for the fourth quarter of the year. However, he said that decrease could be made up in the following months if the shutdown is successfully resolved.

Finance Minister Jim Flaherty expressed hope that Congress and the White House reach a deal.

"This is a reminder that while Canada's economy remains strong, we are still vulnerable to uncertainties outside of our borders," he said in a statement.

WORRIES IN THE UNITED STATES

Travel to the U.S.

Hundreds of thousands of federal employees will be exempted from the shutdown in order to maintain essential services.

The exemptions include employees dealing with travel to the United States. According to contingency plans filed by the Department of Homeland Security (DHS), port-of-entry operations and border patrols are not supposed to be affected.

The DHS said it would continue "passenger processing and cargo inspection functions at ports of entry" along with "drug and illegal alien interdiction."

Similarly, air traffic control services will be exempted from the shutdown, the Department of Transportation says.

Tourism

National parks and museums will shut down, including iconic locations such as the Statue of Liberty and Yellowstone National Park. Guests staying in park campgrounds will be given 48 hours to make alternate arrangements and leave.

In Washington, all Smithsonian Institution locations will shut down. The Smithsonian's National Zoo said it would even turn off its website's livestreaming videos from the animals' pens – including a popular "Panda Cam" of a newborn cub.

Food Inspection

The Food and Drug Administration will be unable to support the majority of its food safety activities, including routine establishment inspections and monitoring imports, according to the U.S. Department of Health's contingency plan.

Outbreak Detection

The Centers for Disease Control and Prevention (CDC) will have to reduce its operations, the Department of Health's plan also says.

The CDC will only have "a significantly reduced capacity to respond to outbreak investigations, processing of laboratory samples, and maintaining the agency's 24/7 emergency operations," the plan warns.

Medical research at the National Institutes of Health will stop but staff will remain to tend 1.3 million lab mice, 63,000 rats and 3,900 monkeys. "Many of these animals are priceless and have taken generations to breed," the plan says.

Defence and law enforcement

The U.S. military's 1.4 million active personnel will remain on duty, as will agents from the FBI, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The Office of the Pardon Attorney will shut down but "if an inmate facing execution in a capital case filed an application for commutation of sentence and appropriations lapsed, it is possible that some OPA employees would [return to work] temporarily," says the Department of Justice's contingency plan.

Astronauts in orbit

Most of NASA's 18,250 personnel will be furloughed, save for about 550 people who deal with operations aboard the International Space Station and ongoing satellite missions. "If a satellite mission has not yet been launched, work will generally cease," the space agency says in its shutdown plan.