Foreign Affairs Committee on March 11th, 2009

[The Chair, Conservative, Kevin Sorenson]

Order, please.

This is meeting number nine of the Standing Committee on Foreign Affairs and International Development on Wednesday, March 11, 2009. Today we are continuing our review of key elements of Canadian foreign policy.

Testifying before us today we have Howard Mains, a member of the board of directors from the Canadian American Business Council.

I must say we have one guest who has not shown up yet and we haven't had any information as to him not being here.

But we are also very pleased to have Jack Granatstein, historian and professor. He has appeared before our committee in the past and has authored a number of books. We've always appreciated your comments at committee.

Our committee provides time for opening statements from each one our guests. Then we would proceed into the first round of questioning, which would be a 10-minute opening statement and then seven minutes.

Perhaps I'll start with Mr. Mains, because it's my understanding that he's filling in for someone who couldn't be here and he does have to take a conference call in about 20 minutes. Mr. Mains, please go ahead.

[Howard Mains, Member of the Board of Directors, Canadian American Business Council]

Thank you, Mr. Chairman.

I'm here today on behalf of the Canadian American Business Council and as a representative of the board of the Association of Equipment Manufacturers, which sits on the board of the CABC. Just to give you an idea who the Association of Equipment Manufacturers is, it's the trade association that represents the manufacturers of heavy equipment used in fields and mines and other such things. We have members from southwestern Ontario, such as Sellick Equipment, and members from western Canada, such as MacDon Industries out of Manitoba.

Let me begin the testimony. As the chair said, I'm sitting in on behalf of somebody who's become tied up at an airport, due to our lovely weather here in Canada. So bear with me.

Committee members, fellow witnesses, ladies and gentlemen, thank you for inviting the Canadian American Business Council to address your committee. My comments here do not reflect the position of AEM member companies; I'm here to address you in my capacity as a representative of the board of directors of CABC.

Since 1987, the CABC has championed close cooperation between Canada and the U.S. and has been a leader in advocating the private sector perspective on issues that affect Canadian-U.S. relations. In particular, the council promotes the truly unique relationship between Canada and the U.S. and the multiplicity of ties that bind the two countries. The focus of our presentation today will be on the new era in Canada-U.S. relations.

The Canadian American Business Council promotes the benefits of free trade and opposes the protectionist efforts that surface from time to time on either side of the Canada-U.S. border. The council helps foster a collaborative approach to energy supply and security and a joint approach to climate change initiatives.

The council also advocates for better facilitation of the movement of legitimate goods, services, people, and natural resources across our common border, particularly during these difficult economic times. Indeed, these difficult economic times provide an opportune time for Canada to play a key role in influencing American policy. One message that Canada can help deliver to U.S. policy-makers is that adopting protectionist trade measures, regardless of intent, will only exasperate and prolong the current economic crisis.

The council and its member companies, which include businesses based across Canada and the U.S., are active on both sides of the border and are very involved in the Canadian-U.S. dialogue. The CABC has played a key role in supporting bilateral and regional initiatives, such as the work of the Pacific Northwest Economic Region and the North American Competitiveness Council.

The Canada-U.S. relationship is based on commercial interdependence and shared prosperity. Our 200-year-old history sheds light on the admiration, mutual respect, and loyal friendship that have solidified over time and made possible the, until now, robust North American economy. The unique cooperation between Canada and the U.S. has been and will continue to serve as a model for peace and prosperity around the world. The special partnership between Canada and the U.S. has been a pillar of the world economy. It is imperative that we maintain this leadership role.

As President Harry S. Truman so eloquently said in his 1947 address to the Parliament of Canada:

Canadian-American relations for many years did not develop spontaneously. The example of accord provided by our two countries did not come about merely through the happy circumstance of geography. It is compounded of one part proximity and nine parts good will and common sense.

Both Prime Minister Harper and President Obama recently echoed this sentiment in the context of the unique Canada-U.S. relationship. Indeed, Canada and the U.S. share the world’s most unique partnership. The ties between our two countries are stronger than those between any two nations on earth. This leads me to the focus of my discussion with you today: the new era of Canada-U.S. relations.

My colleagues and I at the CABC recently outlined our priorities for the Canada-U.S. collaboration for the coming months. Leading up to President Obama's visit here to Ottawa, we publicized on both sides of the border our message about the significance and impact of the Canada-U.S. relationship.

On behalf of the CABC, I'm pleased to offer some ideas to your committee about the steps Canada can and should take to improve Canada-U.S. relations.

As you know, there are many new players on the U.S. political scene. In addition to Obama's new team, several of whom have yet to be confirmed, there are new members of the U.S. Congress, congressional committees, and gubernatorial governments. Now is the time for Canada to educate and engage these new U.S. legislators—federal and state—about the importance of the Canada-U.S. relationship to Americans.

I will couch my comments in terms of their importance to Americans purposely, in order to highlight to the committee that American lawmakers are focused on and concerned about American interests. In presenting its position to the U.S., the Government of Canada would be well advised to lead with what is in the interests of Americans. Just as the Government of Canada endeavours to protect the interests of Canadians, so the U.S. government is concerned first and foremost about what is best for Americans. For example, lobbying efforts by Canadian governments to impede “buy American” legislation should include arguments about the negative impact such legislation has on jobs in the U.S.

I will begin my summary of the three CABC priorities with a few analogies that I hope you'll find informative and amusing.

First I encourage you to retire Prime Minister Trudeau's elephant-and-mouse analogy in favour of what has been described as the “binocular syndrome”. The binocular syndrome depicts the way our two countries look at each other. Canada looks to America as one would ordinarily look through a pair of binoculars, and sees America clearly. America, on the other hand, looks to Canada through the same pair of binoculars, except from the wrong end. They see Canada in a fuzzy and uncertain way. Instead of looking the same way through a single set of binoculars, Canada is looking to America and America is looking back through the same lens. The two countries should put aside the binoculars and see each other for who we really are.

I also present you with something to consider about the way in which the closeness of the Canada-U.S. relationship is perceived on this side of the border by our electorate. Former U.S. ambassador to Canada, Gordon Giffin, coined the term “the Goldilocks syndrome” to describe the fine line Canadian leaders walk when building relationships with their U.S. counterparts. Like Goldilocks and the three bears, Canadian prime ministers have to find a relationship that is perceived to be at just the right temperature by Canadians—not too hot, not too cold, but just right.

Let us hope that President Obama's popularity among Canadians will provide Canada with some leeway in walking this political tightrope. Support for engagement with the U.S. is vital to the economic viability of the Canadian economy, and Canadians must be willing to tolerate a close relationship with the U.S. if our economy is to recover quickly. Canadian leaders must be willing to stand up and advocate in Canada and among Canadians for engagement with the U.S.

The first of three CABC priorities that I will present to you today is our organization's support for free and comprehensive trade. Governments in Canada and the U.S. must work together in defence of free trade. For many reasons, this is imperative for economic recovery on both sides of the border. Governments must unwaveringly oppose protectionism and condemn such efforts by state and provincial governments. The organization I represent is a champion of free trade and has consistently opposed protectionist efforts by governments in both the U.S. and Canada.

Let me move to the second priority. The council promotes a collaborative approach to energy supply and security and a joint approach to climate change.

Canada is the single largest supplier of energy to the U.S. and the country best suited in terms of safety, security, and predictability to supply U.S. requirements for energy. Given this reality, it is in the best interests of both countries to collaborate on implementing strategic policies to achieve a safe, secure, reliable, and sustainable North American energy supply.

The CABC encourages the environmentally responsible development of the oil sands through collaboration and cooperation among governments, industry, and communities on both sides of the Canada-U.S. border. The CABC supports the development of new technologies and innovative programs to reduce environmental impacts and the consumption of water and gas in the development of such resources.

Third, the council stands for facilitating the efficient movement of legitimate goods, services, people, and resources across the Canadian-U.S. border. The close and extensive relationship between the United States and Canada is reflected in the staggering volume of bilateral commerce—the equivalent of $1.5 billion a day in goods—as well as in people-to-people contact. About 300,000 people cross our shared border every day. Since Canada is the largest export market for most states, an efficient and streamlined Canada-U.S. border is critical to the well-being and livelihood of millions of Americans.

Governments are at a decisive point in the administration of border crossings. Governments in Canada and the U.S. should take a careful look at measures aimed at tightening the ability of imports and exports to reach their destinations. In this new era of Canada-U.S. relations, and during this window of opportunity with the new U.S. administration, there is an opportunity for Canada to get its message to the Secretary of Homeland Security, Janet Napolitano. Canada could frame its efforts to improve border efficiency by making the case that the Department of Homeland Security portfolio is an economic security portfolio as much as it is any other type of security portfolio.

Let me close by making one final observation, and I think everybody who has seen commerce work in Canada will agree with this. Our trade with the United States is not simply a trade of consumers on one side and manufacturers on another side. We make things together; we manufacture things together. Plenty of examples show that certain components, whether it's a piece of machinery that our manufacturers in southwestern Ontario or the west make...those pieces of equipment make their way back and forth across the border. I would encourage the committee to ensure that this is a key understanding, that Canadian and American companies make things together, so we should do everything we possibly can to allow that to happen.

Thank you, Mr. Chair.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Mains.

We'll move to Mr. Granatstein, and we welcome Mr. Douglas.

[Dr. Jack Granatstein, Historian and Professor, As an Individual]

Chairman, honourable members, thank you very much for inviting me.

Let me begin by stating a few truisms. Canada is part of the world community, and it has and will continue to have multilateral interests and obligations, but we're inescapably part of North America, and however much some Canadians may wish they could alter this fact, they cannot. We're joined to the United States hip and thigh, and this will not change. The Americans may make major alterations in their strategic dispositions around the world, but our location along the Americans' northern border guarantees that the United States must take an interest in Canada for pressing American strategic interests.

President Roosevelt in 1938 said, “I give to you assurance that the people of the United States will not stand idly by if domination of Canadian soil is threatened by another empire.” A few days later, Prime Minister Mackenzie King offered a reciprocal pledge: “We, too, have our obligations as a good friendly neighbour, and one of them is to see that…our country is made as immune from attack or possible invasion as we can reasonably be expected to make it, and that…enemy forces should not be able to pursue their way, either by land, sea or air, to the United States, across Canadian territory”.

Both nations were serving their own and each other's interests with these promises. Sensible Canadians, then as now, understood that their nation's defence ultimately was provided by the United States. They also recognized that Canada could never allow its defences to decay so much that the United States believed itself in danger because of Canadian weakness. That would oblige the Americans to take over the complete defence of the northern half of the continent, whatever Canadians might say about it. The impact of any such action on Canadian sovereignty is obvious, and nothing today differs from the Mackenzie King years. Indeed, the attacks of September 11, 2001, guarantee that the American interest in Canadian geography remains as focused as it ever has been in the last century.

Canada's economic prosperity similarly depends on the American market. Efforts to switch our trade from the United States have always failed. Canada-U.S. trade has slowed lately during the recession, but it is vastly greater than it was 15 years ago when NAFTA was signed, with almost $2 billion in trade crossing the border each day, almost 80% of Canadian merchandise exports going to or through the U.S., more than 20% of American exports coming north, and the Americans buying more than a third of our GDP.

Canada's dependence on the American market for its economic survival is clear. Still, Canadians' ambivalent attitude towards their American neighbour remains stubbornly unchanged. Canadians like to think they understand the Americans better than others, though there is little evidence of this. We want to enjoy all the benefits of the North American standard of living and we consider it our right to trade with and visit the United States, all the while reading American books and magazines and watching its television. At the same time, we sneer at America, bemoan its flag-waving patriotism and aggressive bumptiousness on the world stage, and we have half persuaded ourselves that we could really run the world better.

The endemic anti-Americanism in Canada, a product of history, proximity, and different institutional culture, does Canadians no credit. This attitude will not change, however, without leadership from the same political and cultural and media elites who regrettably continue to use anti-Americanism for their own purposes.

The present government, much to its credit, does not traffic in anti-Americanism for political purposes, but it should be obvious to everyone that anti-Americanism hurts Canada in dealing with the superpower with which we share the continent. Unfortunately, too many Canadians are oblivious or deliberately blind to this basic truth. Combatting anti-Americanism, temporarily at a low ebb as we bask in the admiration for President Obama, should be a government priority. Today's rosy glow of warmth for the U.S., if history is any guide, simply will not last.

Let me turn briefly to Canada's national interests.

We have values that we cherish, such as our support for freedom and democracy, our belief in a liberal, secular, pluralist society, but the fundamental truth is that these few but important Canadian traits aside, values are for individuals while nations have interests above all.

Canadians need to know what their government considers to be Canada's national interests, and this is particularly important in dealing with our superpower neighbour.

National interests are not difficult to detail for most nations, and Canada's in fact are very clear. First, we must protect our territory, our people's security, our unity. Second, we must strive to protect and enhance our independence. Third, we must promote the economic growth of the nation to support the prosperity and welfare of Canadians. Fourth, we must work with like-minded states in and outside international forums for the protection and enhancement of democracy and freedom.

Those principles, those interests, are deliberately stated bluntly, and of course I omit many subtleties. The first, second, and third are unquestionably our domestic goals, and they threaten no other nation or people. They state simply and clearly what any nation must do in its own interests. Our foremost national interest clearly is that we must keep our territory secure and protect our people. This requires that we cooperate with the United States while simultaneously being careful not to allow the Americans to encroach upon us.

The question of unity is much more difficult, given our long history. All that needs to be said is that it is a mistake to act against the will of any large region of the country. At the same time, it is an error not to act abroad if most of Canada wishes to do so. Managing this national interest carefully and properly is critical for any government.

The second national interest, protecting our independence, could be interpreted by some as being directed against the United States, the only state that can jeopardize our sovereignty in the foreseeable future. The Americans don't pose a military challenge to us and have not for more than a century, but the United States is nonetheless a benign threat. Its powerful, magnetic pull can put Canadian independence in question.

It's in our clear interest that this not occur, and we have to find the ways to ensure our survival as an independent nation, vigorously protecting our sovereignty, the control of our territory, and ensuring that our ability to defend our portion of North America is never in doubt, especially in Washington. Anything else can allow an American administration to make us offers of help if we cannot refuse.

The third national interest, promoting our economic welfare, all but forces Canada's government to promote beneficial trade with the huge market to the south. The tension between the two interests, the two national goals, will always be present, but it must be managed. Getting the balance right between these interests is a key test of any government's capability.

The fourth statement of national interest, working with like-minded states to defend and advance democracy and freedom, is a means towards the furtherance of Canadian security, and that may be more contentious to some of today's Canadians than it was to our forefathers, but it merely reflects our own history, the global record of the last century, and the troubling way this century has begun.

Cooperation with our friends and allies has been the means through which we have survived and prospered. Canada has been threatened in the past by the rise of dictatorships and oligarchies, and the spread of liberty, democracy, and economic freedom remains the best guarantor against future risks to us. We have a genuine interest in working with our friends, and that usually means with the United States in the lead, to help protect and encourage the spread of political and economic freedom around the world. We can, of course, decide when and how to participate abroad, but we must weigh all our national interests in making such decisions, and it would help Canadians understand the importance of Canada's interests if our government leaders once in a while stated them, explained them, and definitely acted to defend and advance them.

Let me stop here. To me, our policy towards the United States must be based on our national interests and on an enlightened self-interest that recognizes that we secure great benefits from living next door to a giant. Carping criticism is a Canadian trait, but it is surely time to realize that it does us no good at all in dealing with our superpower neighbour.

Thank you very much.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Granatstein.

Mr. Douglas is from the Plattsburgh-North Country Chamber of Commerce. He is the president and chief executive officer. Welcome.

[Garry Douglas, President and Chief Executive Officer, Plattsburgh-North Country Chamber of Commerce]

Thank you. Greetings, first of all, from Plattsburgh, New York, Montreal's U.S. suburb.

In looking at Canadian-U.S. relations, I suggest there are two realities that are in dire conflict with one another. The first is summarized by my favourite Canadian philosopher, Wayne Gretzky, who tells us to skate to where the puck will be. I suggest where that puck will be is global competitiveness and the reality that no nation alone can be globally competitive in the future. Binationally, we have a chance. Eventually, multinationally, we need to form the kinds of blocs that will give us the intellectual and other capital to compete through this new century.

The other reality that's in great conflict with that comes from a philosopher from the other side of the border, Al Capone, who once said, “I don't even know what street Canada is on”. I don't say that to be insulting, but that is virtually not an overstatement of the dearth of awareness, understanding, and knowledge in places like Washington, where that knowledge is so critical for Canada. They kind of know you're up here. They kind of know some things about you, like hockey, good whiskey, and some other good things. But in terms of the economic importance of Canada to their own country, even though they are decision-makers on a daily basis about the future of the United States, they don't even know what street things are on.

Those are the great conflicts we find ourselves in when trying to manage the effectiveness of Canadian policy in the U.S., and that's what I'm going to address myself to, rather than policy in and of itself. General ignorance is what we confront, particularly in Washington and among American decision-makers and opinion-moulders, and I include the media in that. Understand that ignorance is always a threat, but especially such broad and deep ignorance about something so important and potentially so fragile.

The other great threat confronting us now that's been referenced here is protectionism, which, because of ignorance, is a threat even in good times but becomes an even more serious concern during a recession such as we are both facing today. As one who regards himself as one of Canada's best friends in the U.S.—and I take pride in considering myself that—I offer these thoughts on how Canada, its provinces, and stakeholders can build awareness, understanding, and positive engagements south of the border in pursuit of the economic interests and opportunities our two countries share.

Number one, recognize the importance of grassroots partnerships. Across the continent there are various organizations, coalitions, and alliances engaged in the promotion and development of binational prosperity on a regional or corridor basis. Our own Quebec-New York Corridor Coalition, co-led by the Plattsburgh-North Country Chamber of Commerce and the Federation of Quebec Chambers of Commerce, has taken a leading role since 2001 in fostering partnerships between Quebec and New York in transportation, border facilities and operations, technology sectors, tourism, energy, and other opportunities.

This has included active, shared advocacy in Washington, building direct linkages with U.S. senators, House members, and others, and achieving advancements for Canada that could never be achieved through Canadian efforts alone. I spent 14 years running a congressional operation. I know how Washington works. That's why I don't sleep well at night. I go to Washington at least once a month, sometimes twice a month. I frequently take my colleagues from Quebec with me, including representatives of the Quebec government, of chambers of commerce in Quebec, and Quebec companies, because I know that's what's going to give them relevancy in front of senators and congressmen, as opposed to the courtesy meetings that—if they could secure one—they otherwise would have.

The Quebec-New York Corridor Coalition and other binational groupings, large and small, present the very best pathway for pursuing Canadian interests in Washington and elsewhere in the U.S. In our region, the Canadian consulate general in Buffalo has been and remains an active partner, and I want to acknowledge that. There's no criticism here of the outstanding commitment and work of our partners at the consulate. But I suggest that Canada can and must do much more to tap the power of grassroots networks and to foster additional ones wherever possible. This is especially true in effectively engaging officials in Washington.

Number two, in line with the foregoing, Canada must also fully recognize and embrace the crucial role of provincial governments and cities in the pursuit of positive partnerships in Canadian economic interests. Indeed, unlike Europe, NAFTA was clearly more of an end than a process for both Canadian and U.S. governments, leaving the field open to states and provinces to emerge as leaders in setting fresh agendas for cross-border progress and collaboration. They've filled the void since NAFTA was ratified.

In our region, the Quebec government has been a long-standing force in support of grassroots efforts in the development of new relationships and connections and in the pursuit of shared opportunities of all kinds. The excellent work at the provincial-state level must always be valued and encouraged and must certainly never be diminished or seen in any way as somehow some unwelcome competition with what the federal government's diplomatic efforts may be.

In this regard, let me cite an interesting fact. In my last 16 years as president and CEO of the Plattsburgh-North Country Chamber of Commerce, with all of my engagement in Canada-U.S. and border-related matters, I have been frequently invited by the Quebec government to join the Quebec premier and other Quebec officials in U.S. visits, to be part of various programs and discussions, and to offer advice and assistance in various matters in the U.S. In contrast, we enjoy active engagement with the Canadian consulate in Buffalo, as I have mentioned, but not in a sustained way from the ministry or from the embassy in Washington. There is much to be learned from Quebec, and from some of the other provinces that also work actively in the U.S.

Currently we are beginning work with our friends and partners at the Board of Trade of Metropolitan Montreal to specifically combat potential protectionism in the U.S., helping to identify and connect with chambers of commerce in targeted American cities to explore potential visits and other activities to expand awareness of the great importance of Canada to the economy everywhere in the U.S., including those cities. This is another of many examples of effective ways to promote Canada's interests from the ground up.

All of these types of outreach must be expanded and actively supported as part of Canada's foreign policy agenda, valuing and recruiting partners in the U.S. that can open doors, ears, and minds for you.

Third, focus on hot topics. One pathway into the hearts and minds of American policy-makers is to grasp open opportunities to demonstrate shared interests. Right now, and likely for some time to come, all economic discussions in Washington and at other levels in the U.S., including at the state level, turn sooner or later to the pursuit of green agendas, from alternative and renewable energy development to the generation of various green technologies as job generators, to more efficient transportation and supply chains.

Canada has much to offer in this broad new realm of public policy and economic development, so we must look to every opportunity to work this into our shared efforts and outreach. When you can talk with the person you want things from about something they're already interested in, that's the way into having a meaningful conversation. Here again, however, grassroots partners such as provinces, states, cities, chambers, universities, and others will be crucial if this is to move beyond lofty pronouncements and ambitions and photo opportunities and translate into tangible endeavours and outcomes that will then truly reinforce Canada's profile amongst those we seek to ultimately win over.

Fourth is to act bilaterally, not trilaterally. Whenever possible Canada must act outside the NAFTA framework to engage in bilateral conversations and efforts, and this must include the already often-noted importance of grassroots stakeholder groups and communities. President Clinton and Prime Minister Chrétien began something potentially powerful in 1999 with the launch of the Canada-U.S. Partnership forum, CUSP. This was designed to be a long-needed vehicle for broader and deeper engagement of U.S. and Canadian interests of all kinds, and it enjoyed two major gatherings before it was, unfortunately, quietly abandoned by the new Bush administration. It is time for Canada to seek the revival of this or some similar framework for stakeholder engagement in the U.S.-Canadian conversation in a major and sustained way.

Fifth, we can't forget the border. Understandably, 9/11 focused unprecedented attention on border security. Happily, many of the measures implemented at the border by the U.S. and Canada carried out in the name of security were in fact actually initiatives we had long been seeking in the name of modernization and facilitation. With recent changes in Washington, we may be able to avoid having to expend quite so much energy combatting wrong-headed or ill-considered ideas and instead work in the spirit of the shared border accord toward common sense policies and practices, due recognition of economic security as well as physical security, and the many shared economic opportunities we have been in part distracted from while consumed, for example, with trying to postpone and manage the western hemisphere travel initiative.

Let me state three things with regard to the border in the context of my remarks today.

First, we must continue to find ways to move toward a shared perimeter away from North America whenever possible if we are to ultimately reduce pressures on our internal borders.

Second, we must see the provincial, state, and grassroots partnerships previously referenced as Canada's best means for addressing its concerns at the U.S. border. What has been accomplished at Champlain-Lacolle is a perfect example of this, where we are just putting the finishing touches on a $107 million new U.S. border-crossing campus. While most other areas of Canada are complaining about thickening of the border and delays in commercial traffic, we have totally eliminated truck delays at Champlain-Lacolle. So through grassroots efforts in Washington, solutions can be found and resources can be mustered.

Third, at the same time, Canada must do all it can to help ensure that there is never a terrorist incident in the U.S. that can in any way be connected to Canada or to anyone entering the U.S. from Canada. The severe reaction from the populace and from Congress would be unstoppable. It would plunge Canada, as well as the U.S., into deep economic crisis. We should have no doubt that those who want to harm us and western interests know this all too well.

Finally, a new vocabulary is needed. As much as possible, we must move firmly away from the vocabulary of trade in discussing the Canada-U.S. economic relationship. While we are not the European Community, now, with virtually no border from Sofia to Dublin, we are also clearly not the U.S. and Bulgaria, and not Canada and Thailand.

We increasingly make and do things together and are increasingly interconnected, intertwined, and economically integrated, yet the outmoded vocabulary and measurements of trade misrepresent our relationship by obsessing on supposed surpluses versus deficits, feeding the lack of awareness and understanding we need to reverse, and simultaneously fueling the protectionist voices we need to quiet.

The notion of somehow treating the availability of oil, gas, and hydro power from a secure and friendly neighbour in our own continent as an economic negative by making it part of some calculated trade deficit is bizarre in the extreme, I suggest.

Words matter, and the old words of trade no longer serve the reality of the U.S.-Canada economic relationship. They do, however, serve the agendas of those who would take us down the disastrous road of protectionism.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Douglas.

We'll move into the first round.

Mr. Patry.

[Bernard Patry, Liberal, Pierrefonds—Dollard, QC]

Thank you very much, Mr. Chairman.

Thank you, Mr. Granatstein and Mr. Douglas.

First Mr. Douglas, I would like to congratulate you for providing us with the document in Canada's two official languages, English and French. That is a sign that you very much appreciate when you come from Quebec.

My question is for you, Mr. Douglas, and we don't have that much time.

First of all, I was quite surprised when you said in your remarks that there is a lack of awareness and understanding in your country of the importance of Canada to America's current and future economic prosperity. Going a little bit further, you said that the Canadian consulate in Buffalo is mostly working very well with your association, but it's quite difficult with Washington.

Because we are looking at the border, and your last comment was about the border between our two countries, as a co-chairman of the Canadian-American corridor council, can you tell me if this council reaches from the east to the west, from the eastern provinces to the province of B.C.?

Were you consulted by both countries on the issue of border security? It seems that every time we meet our counterparts, the congressmen in the United States, they are all talking about how they are scared of anything coming from Canada because of the long border.

[Garry Douglas]

The simple answer to your last question is no. It's not wilful, but I do think there has not been a concerted enough effort on Canada's part to identify--and I don't think it's hard to identify them--active stakeholder interests, groups, and effective advocates in the U.S. for Canada, across the continent, and to utilize them in a much more coordinated, consistent, and sustained way to help Canada with its messaging and its access.

If I leave here having imparted no other message, it would be that a much more concerted, sustained effort needs to be made in that area. There are well-meaning efforts now and then, here and there, but they're not sustained and they're not consistently coordinated.

[Bernard Patry, Liberal, Pierrefonds—Dollard, QC]

You talked about the congressmen of every state and you said you had good relations with them. We had a problem, not in meeting with the state congressmen, but with the Washington ones. It's political. We're looking at the possibility of going to Washington at the end of the month.

What would be your advice for us? Under the circumstances, when we meet with them, it's for a very short period. In which way should we engage with them? Do you have any special advice? It seems that with the border and Quebec, you have had really good success.

[Garry Douglas]

Any time you're dealing with a U.S. congressman or senator, the more you can take advantage of opportunities to have American friends with you in those conversations, or at some point during that visit, the more powerful it will be--just as in your ridings you're going to care a lot more about a company, business person, chamber of commerce, or citizen from your riding than someone from the U.S. telling you how important the U.S. is to Canada. The opposite is just as true, and in fact even more so given how vast the U.S. is. The vast majority of U.S. congressmen and senators aren't anywhere near the northern border, so they have never had any real reason to deal with that subject, learn about it, or really care much about it.

I cannot overstate the extreme lack of awareness among members of Congress and senators--and even more so at the staff level with those who are driving the writing of papers, position papers, press releases, schedules, etc.--about how important Canada is to the economy of every American. And that's not just Americans who live in Michigan or New York, but Americans who live in Iowa, Kentucky, and Florida. Much more needs to be done for all of our sakes to get that message across, but it needs to be done in partnership with Americans in order to be effective.

So it's not the nice courtesy sort of thing of receiving some colleagues from another country, having a conversation, and being undoubtedly very well-meaning about that conversation. When that meeting is over, it's not going to stay on the agenda as something very important to them when their own constituents pull them back in other directions.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Douglas.

We'll move to Mr. Crête, please.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

This morning, there was an article in the Globe and Mail reporting that Mr. Obama's investment plan—he's going to spend a lot of money—doesn't contain any protectionist measures in relation to the U.S. government's expenditures. However, where expenditures are made by states or major cities, there will be an obligation to buy from American suppliers.

There is a very concrete case in my riding. A business that sells aluminum was told by an American client that it had unfortunately received an order to buy from a U.S. supplier. You said so yourself: we have a very integrated economy. A spokesperson for the water and sewer equipment manufacturer's association even said this will paralyze the economy.

Let's suppose you are the prime minister of Canada or that you hold a top-level position. What could you do to convince the people concerned in the United States that there is no basis for this practice because it harms both the Canadian and U.S. economies? Given your knowledge of the United States, what would you do to find a solution to this situation, at least in the short term?

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Crête.

Mr. Douglas.

[Garry Douglas]

As I mentioned, protectionism is looming because of the economic realities. It raises its ugly head when everybody is thinking about jobs and not understanding that you lose more jobs than you gain through protectionism. If you happen to be somebody with one of those interests who's looking to be protected, it's a hard argument to see the other side. That's just a reality.

I can only stress again that the importance needs to be understood amongst not just policy-makers in Washington, but governors, mayors, union leaders, and the news media in particular. They have such a role in defining what becomes a story and how that story gets spun even when they're talking about things such as these kinds of provisions in order to understand how fundamentally important the economic integration is. Again, I think the more you get away from the discussion of trade, the better.

Trade is a dirty word. I don't know why it is. It doesn't make any sense. It's been the single most positive economic force in raising the quality of life for people globally through all of history. It has very little constituency. Get away from that vocabulary and talk in terms of the job impacts and the economic impacts of the average person in Iowa, or the average person in South Carolina who doesn't think Canada is relevant to them at all, except what they hear in the media occasionally about how we somehow might be losing jobs because of NAFTA.

There again, too often Canada kind of gets sucked in with realities and prejudices in American opinion related to Mexico. NAFTA is NAFTA, and therefore everything is bad because it's NAFTA. Again, it has to be bilateral. You have to break the Canadian discussion away from being tied up to the different realities of Mexico and you have to engage American stakeholders.

I think what the Montreal Board of Trade wants to do is get out to places like Pittsburgh, for example, and engage with the Chamber of Commerce there to get greater awareness of the importance of Canada to a place like Pittsburgh, where right now the concern may be about selling American steel, and make them understand what the real balance of interest is. That's the pathway.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Granatstein, in a longer term perspective of Canada-U.S. relations, what efforts should Canada make to really reestablish with the Americans the relationship that it may have had 10 or 15 years ago? Perhaps we're nostalgic, but what action would it be important for the Prime Minister, the Department of Foreign Affairs and International Trade, to take so that we can hold more advanced discussions in the near future?

[Dr. Jack Granatstein]

Relations were good 15 years ago when Prime Minister Mulroney was in charge. They were so good that a lot of Canadians thought we were sleeping with the Americans all the time, and they didn't like it very much. It's very difficult to find the right balance. As the first witness today said, really we have to find a way to learn to tolerate the relationship with the United States. That's precisely what we must do.

We have to work with the Americans in our interests, but we have to remember that they are a superpower. They have global interests. And sometimes we must do our share of the dirty work in the world. The Americans have thought for a long time--really for about 50 years--that we have not done our duty in carrying out our responsibilities as a member of the west and as someone who can do a bit of the dirty work. They know we're not a big military power, but they also know that we have a tendency, as John Manley put it some years ago, to go off to the washroom when the bill comes. We can't do that any more. It's a different world, and we have to demonstrate that we are willing to do our part.

I would suggest to you that being in Afghanistan, costly as it has been to us, has had a very substantial impact in the United States in making the American government--previous government and current government both--think that Canada is somewhat more reliable and somewhat closer a partner than it has been in the past.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Granatstein.

We'll move to Mr. Goldring.

[Peter Goldring, Conservative, Edmonton East, AB]

Thank you, Mr. Chairman.

I'll be sharing my time with Mr. Lunney.

[The Chair, Conservative, Kevin Sorenson]

You have about five minutes, so you're really going to have to hustle.

[Peter Goldring, Conservative, Edmonton East, AB]

Welcome, gentlemen.

Mr. Granatstein, you talked some on the long history of security with the United States. As we discussed a few years ago, it's epitomized by the monument on the walls of Quebec City with Roosevelt and Churchill. Unfortunately, for some reason, we'll celebrate the other leaders who were participating in it, but not our own Canadian Prime Minister, who was left out.

My question is on the Northwest Passage and the American position on it versus, say, the Russian position. The Russians agree that it's Canadian territory. The Americans feel it should be an international waterway. On a point of strategic security, would it not be better for them to conclude that it is indeed under Canada's sovereign jurisdiction and is not international? Quite frankly, if it is considered an international waterway, does that not leave it open to be used by any other? That's when it's in its liquid state. What about when it's in its frozen state? Can they drive on it too?

[Dr. Jack Granatstein]

Yes, they can drive on it, and yes, they can fly over it, if it's international. It causes serious problems for the Americans if the Northwest Passage is internationalized.

On the other hand, the Americans are far more concerned at this point with other international straits elsewhere in the world where there isn't a problem with ice a good part of the year. So far, they haven't managed to focus on the differences between the Northwest Passage and other warm water straits.

From our point of view, obviously we want to see it as Canadian territory and sovereign. But realistically, we need to face the international law fact that we might not win such a case, and we may be better off—may be—thinking of ways to have an internationalized joint responsibility in the northwest than trying to have it only for ourselves.

We also need to recognize the reality that if global warming continues at its present rate, in 10 to 15 or 20 years the Northwest Passage may very well be open water, and in fact the North Pole may be open water. If that happens, the Northwest Passage will disappear as a significant route. Why go through Canadian waters, through a torturous, winding course, if you can take an over-the-pole route that is shorter and doesn't get you involved with Canadian environmental regulations? That is probably coming in the near future.

[The Chair, Conservative, Kevin Sorenson]

Mr. Lunney.

[James Lunney, Conservative, Nanaimo—Alberni, BC]

Thank you.

I'll just pick up on the same theme.

I appreciate many of your remarks, Mr. Granatstein, about the attitude of some Canadians in the past not being particularly helpful. I like your comment about our enlightened self-interest and that Canada actually has shown itself to be a little bit of an ally that perhaps got on the U.S. radar as a significant ally.

But going back to the border issue and to the north and our efforts in the north in establishing a presence there, expanding training facilities, scientific institutions, and monitoring activities in the north, do you have other recommendations about what we might be doing to enhance the situation of our perimeter, North American perimeter security, along with the Americans? And of course also on our common shared border, what else might we be doing?

[Dr. Jack Granatstein]

I'm no expert on the border. I wouldn't claim any expertise on perimeter security.

I think we are inevitably being forced toward perimeter security. It will cause us serious problems. It will force changes in our immigration policies, in our refugee policies. But I think we will, in our own enlightened self-interest, namely our economic self-interest, be forced to recognize that we will need to make those changes in order to keep access to the market that is most important to us.

A lot of Canadians think that the great China market or the great India market is going to displace the United States with us. I don't believe this for a minute. The United States is the world's richest market and will remain so, and we simply must keep access to it by whatever means necessary. If that means a common security perimeter, we will be forced to do that.