Worldwide, many people have been hearing about the concerns regarding the impending American fiscal cliff, which may present a multitude of obstacles for the nation's economy if things aren't sussed out in the near future.
The fiscal cliff simply embodies the fact that many of the tax cuts made during the Bush Administration and slashes from the Budget Control Act of 2011 will expire at the end of 2012. However, if these cuts stop, consumers and companies can most likely expect to see their taxes spike, something that would affect nearly every inch of the American economy. Some experts believe that if lawmakers cannot agree on a solution, the results could send the nation back into a deep recession.
What entrepreneurs in other countries might not realize is that if this happens, they will most likely be affected. Their business with American entities and consumers might deplete, among other possibilities. Many individuals, including company leaders in Canada have expressed their concern about the potential outcome. Entrepreneurial advice doled out by many industry veterans recommends that Canadian leaders keep a close eye on the situation and be ready to react no matter the resolution or lack thereof.Anxiety spreads as deadline approaches
According to the recently published CICA Business Monitor, Canadian industry leaders, particularly in the accounting field, are increasingly concerned about the state of the American economy. More than half of chartered accountants polled said that the fiscal situation in the United States presents the biggest challenge to the Canadian economy
, representing a 15 percent rise in this sentiment year-over-year. This option beat out responses that said the true obstacle was either uncertainty about the Canadian economy or the European debt crisis.
"With our close ties to the U.S. economy, it only makes sense that there is a lot of focus stateside," explained CICA president and CEO Kevin Dancey. "The fall of 2012 has featured lots of uncertainty in the United States, with a presidential election and the looming fiscal cliff."Crisis could continue
Many leaders think that if the fiscal cliff cannot be overcome, it will send the American economy into a tailspin. However, Canadian Finance Minister Jim Flaherty said in an interview with CTV that if this occurs, Canadians will have to work to ensure their domestic fiscal situation remains secure throughout.
Flaherty noted that if the American economy tanks, Canada would most likely fall into a recession
as well, because U.S. companies and institutions are among the northern nation's biggest trading partners and strongest allies.