Even the markets aren’t tanking as some forecast, as the standoff continues on Capitol Hill in Washington.
About a third of the federal workforce was off the job for the third day on Thursday, but others involved in what are considered “essential services” are keeping the country on backup mode.
That means Canadians can still cross the border, mail sent to the U.S. will continue to be delivered, and the International Spy Museum remains open in Washington, even if the Smithsonian and the National Zoo aren't.
“There really aren’t any direct impacts to Canadians,” says CIBC economist Emanuella Enenajor.
She says there are some minor impacts on exports for the companies that might be shipping to U.S. federal government departments. The biggest dent will be on confidence in investing in America.
That could worsen if the closure continues past the Oct. 17th deadline, when the U.S. needs to raise its debt ceiling – which would force them to balance the budget. It’s not something the country is financially prepared to do. Instead, it would likely default on its debts.
“That could result in a huge hit to the U.S. economy. Canada would feel that, the whole world would feel that,” says Enenajor.
The market reaction has been relatively muted and not even the Canadian dollar has reacted much since the shutdown began earlier this week.
“We’ve been in this situation so many times … with political brinkmanship and discord on Capital Hill. I think, to some extent, investors and Canadians even have become a little bit desensitized about all of this inter-party political wrangling,” she says.
The Canadian Manufacturers & Exporters association says it’s monitoring the impact of the shutdown on businesses, but it’s not panicking - yet.
“The biggest concern for us right now is the impact the shutdown will have on investor confidence – particularly as the U.S. market is starting to show signs (albeit slowly) of recovery,” the association said in an email statement.
It says the U.S. government has historically represented a “significant source of business” for Canadian manufacturers.
“With the shutdown, a majority of capital projects will be delayed – some may be cut altogether, which puts Canadian suppliers at risk.”
Although it acknowledges protectionist rules, such as Buy America, have already hit Canadian companies in recent years.