Thank you very much.
Good morning, Mr. Chairman and members of the committee.
The Canadian Chamber of Commerce is pleased to provide input on the vital issue of Canada-U.S. trade relations focused on our joint border. I won't speak on the tourism industry, as Randy has already covered this off well.
As we find ourselves in a global economic downturn, we must make sure that the fundamentals of our economy are working. As a trading nation, access to foreign markets is a key pillar of our economy, and no partnership is more important than ours with the United States.
You all know the numbers well. The Canada-U.S. relationship is the largest trading relationship in the world, with $1.6 billion in two-way trade and 300,000 travellers crossing the border every day. Over one-third of this trade is intra-company trade, delivering of input materials, because we do, indeed, build things together. Major benefits flow from this relationship, with ten million jobs in the United States and three million jobs in Canada, something that our American friends often don't understand.
While the Canada-U.S. Free Trade Agreement helped tear down the barriers, creating an integrated North American economy, security concerns following 9/11 have led to a piecemeal application of new border procedures. We now have a thicker border, one that is more costly for business and travellers, putting at risk many of these ten million jobs.
The new U.S. administration gives us an opportunity to reinvigorate our longstanding partnership, while strengthening our physical and economic security. We need to build on the momentum following President Obama's visit to Canada, where our leaders committed to enhancing North American security and to review the management of the Canada-U.S. border.
In a meeting that I had last year with then Governor Napolitano, it was very clear to me that she understood the importance of a balance between security and border efficiency. She strongly believes that both can be attained, and I think this bodes well for all of us here in Canada.
To fix the border, we have five short-term recommendations and one long-term border vision to share with you today. While each of these recommendations may appear an isolated item, combined they create a more secure and competitive North America.
First, we strongly support the voluntary trusted shipper and traveller programs, which enhance supply chain security and travel security. Properly implemented—and I stress “properly”—these programs should lead to more border-crossing consistency for businesses and lower inspection rates for participants. Border agencies can then focus on the unknown traveller, the unknown trade, in essence, making the search for the proverbial needle in a haystack in a smaller haystack.
While the initial cost to participate in these trusted programs can cost $100,000, and up to two years to get certified, we believe that it is a necessary step for securing our supply chains, and participants should be rewarded with a traffic light that largely stays green when crossing the border. However, a number of companies have reported that their inspection rates did not decrease when they entered the programs, and few believe that the investment has produced enough benefits to justify the costs.
We need to treat trusted travellers and shippers differently from the unknown trade and travel. This includes ensuring a risk-based approach to border management, enhancing the membership in trusted shipper and traveller programs, and providing clear, measured, and reported benefits for participation. We also should expand these programs so that companies that are regulated by other government departments beyond CBSA can also participate, something that's not permitted today.
The second major concern for the Canada-U.S. business community is there are not enough lanes open during peak commercial and travel times. While unfortunately this not a major issue today, hopefully we will soon return to normal traffic patterns. These traffic patterns, especially for commercial traffic, are largely predictable and should drive border staffing levels, not the time of day. We recommend that Canada and the United States offer 24/7 border services at all major crossings, including the operation of border booths and secondary inspections—and I stress including “secondary inspections”—and border-related support services.
The third issue is the lack of a single system for reporting imports and exports at the Canada-U.S. border, which continues to frustrate businesses. Different shipments are regulated by different government departments and agencies. And while Canada and U.S. border agencies are moving towards electronic importing and exporting reporting mandates, other government departments are still using other systems, and in many cases these systems are still paper-based.
Electronic cargo data reporting helps our border agencies manage risk. A uniform system across all departments will boost information sharing within government and simplify the reporting process for business. We strongly support the single window initiative in Canada and the international trade data system in the United States.
We recommend that both governments mandate the implementation of uniform reporting systems and that this be a starting point for a long-term strategy to put in place a fully secure and interoperable customs system within North America. If there's one thing you could do that would really make a difference, and that I encourage you to do, it's bring in the other government departments that are not participating in the single window initiative and ask them why it is that small businesses and all businesses in Canada have to go to systems that require electronic reporting to cross the border, as this is for the good of our nation, for the security of our nation, but government departments don't have to meet the same standard.
A pandemic, natural disaster, or terrorist activity, any of these could lead to full or partial border closures. The border's importance to these ten million jobs calls for a contingency plan to deal with these potential events. We applaud the progress made in this area by the Canadian and U.S. border agencies and encourage them to complete the job. We strongly support that a border contingency plan and the needed communications plan be put in place to reopen the border following an incident, especially for our trusted travellers and shippers.
The fifth issue, as Randy mentioned, is the WHTI, the western hemisphere travel initiative. We are pleased to see that when WHTI will be implemented at land and sea people will be able to use their trusted traveller cards and enhanced drivers licences. However, we remain very concerned that there is not the critical mass of WHTI-compliant documentation in circulation, and this will discourage visitors and increase congestion at the border.
We believe that the enhanced drivers licences denoting identity and citizenship, and containing secure RFID technology, are a less expensive and more practical form of documentation than a passport for the many Americans and Canadians whose only travel interests are limited to land crossings. We applaud the foresight of the provincial and state governments that have put in place this option, and we strongly encourage them to expand participation and encourage others to do so quickly as well.
I'd like to now move on the long term. The recommendations I have just listed are short-term border fixes, but they lay the groundwork for a longer-term border vision. Moving forward, we need to strengthen our long history of border cooperation. Successful cooperative models between our two countries already exist, including such examples as NORAD, the St. Lawrence Seaway, and the International Joint Commission.
We recommend taking border cooperation to the next logical level of cooperation with a co-managed border made up of officials from Canadian and U.S. border and infrastructure agencies, with potentially a rotating chair in the same spirit as NORAD. This concept could be tested using a pilot project at an existing border crossing with low-risk, pre-screened trusted shippers and travellers. We have border crossings that are ready to sign up today. A co-managed border will provide uniform border planning, coordinating agency resources, linking cross-border infrastructure projects, and strengthening port and between-port security enhancement protocol and incident responses.
The strength of the Canada-U.S. relationship and our ability to ensure an efficient border is a top international priority for Canadian businesses. We applaud your recognition of the importance of this issue through these hearings.
Thank you for the opportunity to present today, and we'll be happy to answer any of your questions.