Thank you very much, Mr. Chair and members of the committee. Please accept my sincerest thanks for asking the Canadian Chamber for its views on the recently signed agreement between Canada and the U.S., which provided greater access for Canadian products to projects funded by the U.S. stimulus bill, known as the American Recovery and Reinvestment Act, or ARRA.
As you know, the ARRA contained provisions that blocked foreign-produced components from being used in projects funded by the American stimulus package. While the value of the stimulus package was $787 billion, much of this money was allocated for other purposes. It is our understanding that Canada was restricted from bidding on an estimated $280 billion of funding that went to state and municipal-level government infrastructure procurement opportunities.
It is important to note that while this number was high, especially by Canadian standards, the amount of business that Canadians would have expected to win is unknown. We can reasonably state that with the competitive process and the variety of products and services that would have been purchased, the potential wins would still have been significant, though much smaller in number.
Given the reality of global supply chains in which very few products are any longer of 100% domestic origin, as well as the interwoven nature of our trading relationship with the U.S., these restrictions have hurt businesses on both sides of the border.
I'd like to make it clear that the Canadian Chamber of Commerce supports this agreement. First, let us acknowledge that the agreement was negotiated through the hard work of Canadian-U.S. negotiators in a period of less than six months. While this may be far longer than what we would have liked, given the normal length of time required to negotiate international agreements, reaching an accord in six months is an impressive accomplishment. When you take into account that the agreement also required the provinces to sign on, reaching an agreement with that group in six months is, frankly, quite mind-boggling.
A number of organizations have been before you already, so I'll dispense with the details of the agreement and sum up our support in a short statement. This agreement is not an amazing breakthrough that gave Canada everything it asked for. It does not solve every problem, but doing so was never in the cards.
Several months into the ARRA, it is also difficult to spread the word that the rules have changed, and some firms are still facing challenges accessing the U.S. market. Both governments will need to continue their efforts on communicating to the states and municipalities that the restrictions on Canadian products have been removed.
Even with this, the agreement is a step in the right direction. It is a good agreement and worthy of the support it got from the federal and provincial governments. Let me tell you why.
It is well known that the U.S. Congress leans towards protectionism. In a period of economic downturn, this comes out in spades. So it is a win for Canada during this time to gain permanent access to procurement opportunities covered by the U.S. government procurement agreement in 37 states and to get preferred access to the remaining funds in seven programs covered by the ARRA. It is a win to get an agreement to continue to talk about the possibility of a permanent procurement agreement between Canada and the United States.
It's also a win to get the provinces and the federal government to come together on a trade position. Our hat is off to the politicians and the government officials who got a group that sometimes has a problem agreeing on the time of day to stand as one on this issue and to gain this agreement in a matter of weeks. This is where the agreement achieved a real breakthrough, and we're already seeing this pay off in other venues, such as the Canada-EU negotiations.
I would like to suggest to you that your debate should not be focused on whether it is good enough, because the agreement was all that was possible, no matter how much we would like to think otherwise. Rather, your discourse should be examining what Canada should be doing in order to get beyond fighting these fires with the United States.
Unfortunately, this protectionist measure is not a one-off. The fact that it is an election year in the U.S. will make 2010 even more challenging for Canada. Coupled with this are the continued high levels of unemployment that are plaguing our southern neighbour. Unfortunately, the inclusion of protectionist language in proposed legislation could make a regular appearance for the next short while.
We have already seen this in a number of other pieces of legislation, such as the jobs bill and a bill by three U.S. senators that requested that a stop be put on stimulus spending for renewable energy projects until it was guaranteed they were using domestic materials.
We are very blessed to have so many dedicated and hard-working diplomats and locally engaged employees working on our behalf in the United States. I think all of you have met with some of them and know how hard-working they are. But even with this, even with their efforts, it is clear that we need to look at additional approaches that involve the whole of government, the whole of Parliament, and strong public-private partnerships that strengthen our ties in order to develop solutions that are beneficial for both countries.
Collectively, we must do even more to educate Americans on why it is to their direct benefit to foster a unique relationship with Canada. We need a coordinated and organized strategy aimed at fostering even greater awareness in the U.S., and I stress that we need to demonstrate the direct benefit, because it is not enough to go to the United States and have them think that we're nice people living in a pretty country, that we're friendly to U.S. visitors, and that our kids play hockey together.
I have two final thoughts, Mr. Chair. We must avoid retaliation, no matter how much it has been encouraged. We will not create job opportunities by cutting off business with our trading partners. And while the United States will be our largest trading partner and closest ally for long into the foreseeable future--and we encourage continuing to foster this with even greater effort--we also agree with Mr. Hammoud that it is clear we must develop trading relationships with other countries and create greater balance in our trading relationships.
Thank you.