Canadian Brexit impact part fear, part reality: Don Pittis
Odds of U.K. leaving EU now seem lower but the impact on Canada would be no joke
At first glance it seems crazy that Canadian markets are gyrating on the basis of a single country deciding whetherto remain part of the European Union, but the effect on Canadians is undeniable.
Last week the Canadian dollar, stocks and oil drooped as polls showedBrexitincreasinglylikely. Yesterday markets surged after the winds suddenly startedblowing the other way.
If you believe Canadianoptimists, the only ones who will suffer after the referendum are the British comedians.
The BBC radio show Dead Ringers has been having a grand time, playing up the conflict between conservative old-timers who want to keep Britain British and the youngsters who don't care and won't vote.
Shocking change in the odds
All very jolly, and there is some indication that young people are beginning to rally to the Remain cause, while fear for their house values and pensions is causingBrexitersto reconsider.
That seems to behelping toswingthe polls from slightly anti-to slightly pro-Europe. But many worry about the fact that polls haveso oftenprovenwrong.
"Anybody who says they know for sure how Britain will vote next week is fool or a liar, and possibly both," saidwell known British pollster PeterKellnerinanopinion pieceon Thursday.
Uncertainty hurts
The market volatility caused by fear of a British departure from Europe has already hurt Canadians. Market traders may profit by gambling on the sudden rise and fall in theloonie, commodities and stocks, but businesses prefer their prices stable.
Volatility caused by fear of a single event is by definition short-term. Once the vote has happened, goes the theory, Canadianmarkets will readjust to the new reality.
But anyone who cannot see the potential wider impact ofBrexiton the Canadian economy is merely suffering from a lack of imagination.
Last weekend Canada's leading diplomat in Britain, High Commissioner Gordon Campbell, becameonly the latest of theCanadians lining up to warn of the impact ofBrexiton Canada and its trade.
TheHigh Commissioner inveighedagainst the vitriol ofthe campaign that may have helped inspire the unstable killer ofMP Jo Cox, who screamed"Britain first" as he stabbed and shot her.
But Campbellalso warned thatBrexitwould cause a "generational impact" on the world's economies, wiping out thousands of Canadian jobs and possiblywreckingtheCanada-EUtrade deal.
Jumping-off point
The Canadian head of Britain's central bank, Mark Carney has been condemned bypro-Brexitpoliticians for weighing in on the debate, saying a vote for separation from Europe would lead to recession.
Canadian financial companies and law firms are embedded in the City of London, currently the financial hub for European bond trading, mergers andacquisitions, derivative, currency trading and stock issues.
It remains completely uncertain how withdrawing from Europe would affect that financial community. Indeed, it may be in Europe's interests to keep the City of London thriving. Butbitter and rejected European politicians could well put subtle roadblocks in the way. Lawsthat are written to be inclusive can also be exclusive.
In aglobalizedworld, there is no reason Canadian companies dealing with Europe could not reorganize their links, bypassing London where necessary, even retaining the English-language advantage by moving to Ireland, which remains a firm EU member.
But such reorganizations are expensive. Dealing with different rules in Britain and Europe would be a step backward, increasing administrative costs.
Perhaps worse, the withdrawal of Britain could have wider implications for the entire continent.
Rallying point
A successfulBrexitcould become a rallying point for growinganti-EUandanti-immigrantmovements in countries across Europe.
A crumbling of the union at its edges and the weakening of the euro would have even wider impact on the world's financial markets than the exit of Britain. The implications for migration from the Middle East andNorth Africa are hard to fathom, but it is hard to imagine they would not affect Canadians.
Maybe this time the polls are right and none of us hasanything to worry about. Except the comedians.
"I can't be bothered voting because voting doesn't change anything, does it?" says the young Welshmanin the BBC comedy sketch. "Except the result."
Perhaps all thatcomedy is having an effect.The U.K.'sbest and most experiencedpollsters the bookies taking bettingodds on the Brexit referendumsaythe British are going nowhere.
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