Thank you, Mr. Chairman, and thank you for the opportunity to appear before the committee and share some of my ideas on the security and prosperity initiative.
Let me begin by saying I don't represent anybody. As you know, university professors are a rather contrarian group, and the idea of me representing any one of them would be taken I think with some deep offence. So I'm here purely on my own responsibility, expressing my own views, and I think I'm here because I have some background in this, both as a government official and as an academic analyst.
Let me comment briefly on the SPP so we can get on with the questions.
I think some of the witnesses here are perhaps a little overexcited about the SPP. I think there's not much to it. What it really is, is a kind of packaged version of what's going on as part of routine between Canada and the United States.
The Canada School of Public Service did an interesting study a few years ago looking at the extent of networks between Canadian and American officials, and they stopped counting when they reached 240. What do these 240 networks do? They solve problems together. They recognize the fact that Canadians and Americans have similar kinds of problems, live very closely together, and have deeply integrated economies, so they set up working groups, they set up networks, and so on, in order to solve those problems. These go on, on a regular basis.
What the SPP did, and a number of initiatives before that, is take many of these ongoing initiatives and package them together to provide a little bit more political jazz to them, and what's useful to officials, in order to provide them with some political leadership. To an official working on a problem, the kind of speed and intensity with which you address those issues is dependent on the amount of political leadership you see, the amount of political commitment you see to a problem. So what the SPP did was try to raise the profile of some of the work that was going on and give it a little bit more political pizzazz.
That's nice. When you look at it, as I've done, the SPP represents the sixth reiteration of that package. There have been a series of such packages going back to 1996, which put together a series of problems dealing with cross-border trade, cross-border investments, and so on, which require the attention of officials. So there's really nothing all that new about it, and that's my main complaint about it--as good as it is, it just isn't good enough. It really doesn't address the real problems that Canada and the United States need to address in the world in which we now live.
The biggest problem that I see with it is that it is an initiative that is limited to what can be done by the three governments within their existing legislative mandates. There's a commitment that they will not do things that will require them to go to Parliament or to Congress in order to make changes. What that means is we will have little changes and incremental approaches to problem solving, whereas I think in the world of 9/11 and in the world of deep integration, there are things that need to be done that require the governments to go to Parliament and to go to Congress to seek deep changes.
What we need to do is take the issues that are in this initiative, add some to them, and make them part of an initiative that will lead to a treaty, similar to what was done in the 1980s in negotiating the Canada-U.S. Free Trade Agreement, where similarly there were a lot of smaller problems being attended to and they were finally rolled up into a serious initiative that led to a bilateral treaty. I think that needs to be done on the SPP front. Why? Because I think there are three fundamental problems that need to be addressed by the two governments. I emphasize the two governments because I think the issues between Canada and the United States are of a different order from the issues between the United States and Mexico, and there are virtually no issues between Mexico and Canada. So the SPP, in effect, is two parallel initiatives that are joined for the convenience of U.S. officials.
I emphasize that we need to concentrate on Canada-U.S. issues, and there are three. The first is the border. Ron Lennox has already I think given you some pretty good illustrations of the extent to which the border is a problem. If you take into account the depth of integration between our two economies, if you take into account the nature of international trade and investment today, the fact that we have the whole just-in-time production system where we now rely increasingly on what are known as “global value chains”, where goods and services move back and forth and different parts of a large network of companies and suppliers integrate that into final products, it is critically important that the border be as open and unintrusive as possible. What we have seen since 9/11 is a border that has become more intrusive as many more things have been loaded onto the border that could be done elsewhere, or perhaps not done at all.
I think we've reached the stage, for example, where we should stop considering the border as a revenue-gathering device. Given the extent of free trade that we have, I remain deeply offended every time I cross the border and I have somebody with a hat and blue shirt asking me if I bought anything in the United States. Who cares? Given the depth of integration and the amount of harassment of people on that small point, which raises at most several million and costs more to administer than it does to do anything useful, I think we should stop thinking of the border as a revenue device.
Secondly, the border is used in order to ensure regulatory compliance. On the Canadian side of the border the immigration and customs officials are responsible for ensuring compliance with over 100 statutory instruments on behalf of their department and other departments. On the U.S. side they're responsible for ensuring compliance with 400 statutory instruments. Many of those things companies comply with regardless of whether they're being checked at the border. What we should be looking at is what can we move away from the border and what can we rid of altogether so that the border can become what it should be: a place where we look after security matters. Even there I think we would have a more secure border if we had proper police and intelligence cooperation rather than a teenager on a summer job asking whether or not you're going to wish one country or the other harm. I think we need a much different approach to the border.
The second issue we need to look at that is related to the fact that we have a border that is used largely to ensure regulatory compliance is the whole issue of regulatory convergence between Canada and the United States. We have two very similar economies with people who demand very similar things, and as a result we have very similar regulatory regimes in place, but they are sufficiently different to ensure jobs for all kinds of people on both sides of the border ensuring these tiny little differences. I think the time has come for us to move much more expeditiously than is being done under the SPP to reduce those small differences to no differences and therefore reduce the number of things that need to be done at the border. In the question period I'd be happy to elaborate on some of this in more detail.
Finally, in order to do that, I think we need to develop a sufficient institutional capacity between Canada and the United States to govern the extent of integration between our two economies. I find it shocking every time I look at it that Canada and Europe have a more extensive institutional framework in place to look after that relationship than Canada and the United States does between them. I think the time has come for us to put into the dustbin of history our fear of institutional capacity between our two countries and do what's necessary to ensure that we have the political oversight that this very deep and important relationship requires.
Doing those three things cannot be done on the basis of the kind of initiative that the SPP represents. It must be done at a higher political level, and it requires the kind of bureaucratic and political leadership that is currently lacking. To that end, I would like to see the government establish a department of North American affairs to provide leadership over this and drive the agenda.
Thank you very much.