Clément Gignac was in the room with Bill Morneau on Friday for the finance minister's standard pre-budget meeting with private sector economists. His message as Donald Trump prepares to take office south of the border: "be vigilant."
"A lot of uncertainty is coming," Gignac, senior VP and chief economist at iA Financial Group, told BNN shortly after he left the meeting. "You have to manage your tail risks."
Gignac said the biggest risk for Canada's economy stemming from Trump's election win comes down to trade and the risk of protectionism.
"What I recommended to him is build the reserve for contingencies -- a much bigger reserve ... whether it's five or $10 billion," he said. Another option for Ottawa as it awaits more clarity from Washington, D.C. is to delay the next budget, he says.
Morneau, meanwhile, isn't ready to share details of his plan for dealing with the next White House occupant.
"We are looking forward to working with the new administration in the United States," Bill Morneau told BNN during a media availability on Friday. "We know that we need to represent Canada, represent Canadians, represent our interests."
Morneau noted formal discussions will have to wait until the administration takes office, adding his government plans to talk with Trump's team the same way it exchanged views with the Obama government -- with a specific emphasis on the importance of Canada-U.S. trade for both countries, noting Canada is the top export destination for 35 states.
"We see the positive opportunities for Canada, for the United States, in thinking about how we can not only continue our trade relationship, but enhance it," Morneau said.
His comments come a day after National Bank Financial warned Canadian exporters could fall victim if Trump proceeds with a border tax adjustment. According to the bank's economics team, non-energy Canadian goods exports to the U.S. could fall approximately 11 per cent in such a scenario.
"So, while we currently expect Canada’s GDP to grow 1.9 per cent this year and 1.7 per cent in 2018, we acknowledge downside risks to those forecasts should U.S.-Canada trade relations or the global economy take a turn for the worse," said National Bank Financial Senior Economist Krishen Rangasamy in a report to clients.