Evidence of meeting #66 for Public Safety and National Security in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pre-clearance.
A recording is available from Parliament.
4:35 p.m.
Chief Executive Officer, Canadian American Business Council
My kids are very mad at you. Actually, they're running rampant right now, so probably they're happy that I'm here. Anyway, it's a pleasure to be with you.
After years of quietly existing in relative obscurity, the North American Free Trade Agreement, and particularly its renegotiation, are now big news. What will remain intact? What will be scrapped? How fast will we get a new deal? Could dairy and lumber sink NAFTA? What about protections for intellectual property?
Apart from NAFTA, there's another critical piece in how the United States and Canada do business, and that's border management. Obviously, I don't have to tell any of you everything I'm about to say, but it's for the benefit of the record so you know precisely where the Canadian American Business Council lands on these issues.
The border is where many Canadian and American business travellers, in particular, get up close and personal with NAFTA. Fees are collected. Shipments are inspected for compliance. Those trying to work or do business stateside can be held up depending on whether they qualify for appropriate NAFTA work visas.
Indeed, the work of government agencies on both sides of the border to manage our shared boundary is nearly as important to the health of our integrated economies, to the viability of our businesses, and even to the quality of life of those living near the border as is the implementation or renegotiation of any particular trade agreement.
Canada and the United States have had various forms of border pre-clearance, as this committee knows very well, since the 1950s. By way of definition, pre-clearance allows Canadians to be screened and given the green light by American officials for immigration, customs, and agricultural purposes before entering the United States and while still on Canadian soil. In recent years, there's been real progress in moving the screening away from the actual border and to pre-screening facilities in airports at Calgary, Toronto, Edmonton, Halifax, Montreal, Ottawa, Vancouver, and Winnipeg. In practical terms—and again, I feel a little funny as I'm defining this for you, because I know this committee knows these things very well, but again for the purpose of the record so you know where we are—pre-clearance means air travellers can breeze through any American airport as if they're domestic passengers with no need to go through customs once they've landed in the United States. That opens up flight routes to any town that has a commercial airport, rather than limiting them to major cities with built-in U.S. customs facilities. Many communities in the United States don't have U.S. customs and border patrol at their airport, so they're not available for international flight routes. Any Canadian who's landed at JFK Airport or O'Hare and stood in long lines behind travellers from far-flung places appreciates the efficiency and the convenience of pre-clearance.
At its core, the practice of pre-clearance serves two significant policy goals. It helps Canadian and U.S. officials zero in on potentially bad actors and dangerous or illegal goods while at the same time making it easier for upstanding citizens and legitimate commerce to cross the border with relative ease and minimal hassle. I would add here that the former U.S. CBP official Alan Bersin—and I don't know whether he's testified before you or not—talked about operations at our border being like looking for a needle in a haystack. Pre-clearance is something that, in his terms, makes the haystack smaller, enhances security, and helps ease commerce.
Despite 50 years of pre-clearance measures at the border, however, everything changed after the terrible attacks of September 11, 2001. The U.S. and Canada understandably beefed up security at the border, and the boundaries subsequently became mired in congestion, delays, and hassles for those doing business or travelling frequently between our two countries.
On a personal note, it was in 2001 that I first became engaged with the Canadian American Business Council, which was, until then, kind of a lunch club in Washington for expats. After 9/11, when the border basically came to a close for commerce, the board of directors said, “You know, we really need to communicate to policy members how important for our economic security and health this border really is.” That's when I got involved with this particular organization in 2001, after having served four years here at the U.S. Embassy in Ottawa, which was the honour of my lifetime.
Canada began to complain. Inefficiencies at the border, after all, have a disproportionate impact on the Canadian economy, and for more than a decade a frustrated Canada pushed the U.S. to co-operate on initiatives aimed at fixing what had become a woefully inefficient boundary. The U.S., however, balked until, this committee will remember, in 2011, when a border vision was announced between then Prime Minister Harper and his counterpart, President Obama, followed by the 2015 signing of an updated and expanded pre-clearance agreement.
Your colleague and I were at the signing in Washington with the Secretary of Homeland Security and the Canadian counterparts back in 2015.
But there's been an odd reversal of fortunes recently. The enabling legislation for the Harper-Obama pre-clearance agreement easily passed both chambers of Congress late last year, and now Americans are intently waiting for Canadians to enact their own pre-clearance companion law. This is interesting and ironic when you consider how utterly slow and dysfunctional the U.S. congressional system is. Usually Canada's parliamentary process is much more efficient, but not so on this particular issue at the moment.
Canada's Bill C-23 would implement the 2015 border pact. It was introduced, as you all know well, in June 2016 and is working its way through the process. The legislation, when passed, will expand the number of pre-clearance locations at airports and various other land, rail, and marine crossings, including Montreal's central train station.
For Canadian citizens, regardless of nationality, there are myriad advantages to pre-clearance. They'll be able to get all customs, immigration, and agriculture processes out of the way before they board planes or cross the border on Canadian soil, consistent with Canadian law and Canada's Charter of Rights and Freedoms.
In order to comply with the new agreement, U.S. Customs and Border Protection officials needed clear legal authority to question and search those in pre-clearance areas seeking to enter the United States, and Canadian border officials operating in pre-clearance areas in the U.S. would get the equivalent powers. It is not a one-way street but a truly reciprocal initiative.
As an aside—and I think you heard about this earlier today and you probably know—Canada has not exercised its prerogative to open pre-clearance facilities in the U.S. in the air environment but may wish to do so in years to come. I know that Canadian snowbirds who spend their winters in Arizona or Florida would welcome the opportunity to pre-clear customs before returning home.
Canada agreed that it was a fair trade-off that would give Canadians and Canadian businesses easier access to the U.S., and at long last we had a deal to create an efficient border. Yet we're still waiting—I say with the utmost respect—for Canadian Parliament to make the pre-clearance deal come to life. In our opinion, it is time to speed up the process and get people moving for the benefit of both Canada and the United States and for the health of our deeply integrated economies.
Thank you so very much.
4:45 p.m.
Liberal
Michel Picard Liberal Montarville, QC
Ms. Greenwood, you talk about zeroing in on bad actors as being one of the concerns. Part of the discussion we have had in the past relates to surveillance activities of customs actions in the pre-clearance zone. I understand that when something goes—let's say—wrong and we have complaints, on the U.S. side we count on the Office of Inspector General, the Office of Civil Rights and Civil Liberties, and the Office of the Citizenship and Immigration Services Ombudsman. U.S. Customs and Border Protection has the Office of Internal Affairs to take care of complaints.
We don't have that many organizations in Canada to oversee Canadian customs. Are those issues part of your concerns? When you elaborate on any strategic planning, going back and forth on both sides of the border, what is your position on the surveillance capacity over those U.S. and Canadian customs officers and their activities?
4:45 p.m.
Chief Executive Officer, Canadian American Business Council
Our view is that both the United States government and the Canadian government have had years and decades and generations of working together on securing our border and on facilitating commerce. We would argue that they've made less progress on the facilitation of commerce side and actually more progress on the security side, as important as that is.
We think the intelligence sharing and the shared approach, whether it's in the integrated border enforcement teams or the way we operate together in NORAD, a defence agreement, as you know, in Colorado Springs, and whether that which is applied to our airspace could be applied to our physical continent and going back and forth across the border, are very important kinds of protocols. We also think that if any two countries in the world can figure out how to operate appropriately with each other in this new era, those are Canada and the United States.
4:45 p.m.
Liberal
Michel Picard Liberal Montarville, QC
Mr. Chan, with pre-clearance way before going through the border, how do you manage in between in terms of security? Do you lock the train?
4:45 p.m.
Alroy Chan Senior Director, Corporate Development, Rocky Mountaineer
Yes. Currently in our operations, when we go, say, southbound from Vancouver to Seattle, there's no pre-clearance or pre-inspection at our station. The train leaves from our Rocky Mountaineer station, and as soon as passengers are boarded, the train is completely secured and locked up and goes non-stop past the border directly into Seattle's King Street Station, where U.S. CBP officers then come on and conduct post-clearance activities on their soil at their station. So it's completely secure all the way down.
4:50 p.m.
Liberal
Michel Picard Liberal Montarville, QC
Is there more than one railroad to go across this border? I don't know the region. Can you go from where you're going to put your pre-clearance activities to more than one destination, or do you have to go to the same railroad and then, after the U.S., go anywhere you want?
4:50 p.m.
Senior Director, Corporate Development, Rocky Mountaineer
In Canada there would be more than one track. Before you hit the border, you would have CN, CP, and BNSF tracks all together. I don't know if they all merge at exactly the same spot, but once you cross the border you are solely on BNSF's track. There would be no other way to go to get down to Seattle.
4:50 p.m.
Liberal
Michel Picard Liberal Montarville, QC
Maybe I misunderstood, then. You go by different tracks, but you cross the border at one and the same place.
4:50 p.m.
Liberal
Michel Picard Liberal Montarville, QC
So I'm wondering what the economic advantage is of doing pre-clearance before, if you have to go through one door only, as compared with an airport like Bishop, for example, where you leave from Bishop and can fly in different destinations because you don't have to go through customs at destination. In our case, you have to go through the same door in the U.S., and then you go everywhere, as if going through customs at the border or before. You have to go through the same door anyway, and it's only then that you have to maybe change the railroad you want in order to go to any destination you've chosen.
4:50 p.m.
Senior Director, Corporate Development, Rocky Mountaineer
Yes. For Rocky Mountaineer's operations, we currently only have one international cross-border route, Vancouver to Seattle, but the economic advantage for Rocky Mountaineer and primarily for our customers, or “guests”, as we call them, is just time and efficiency. They are at our station already most likely about 90 minutes ahead of departure. As soon as we check them in, they're waiting. Currently the operation is that when they get to Seattle and conduct the post-clearance, it could take upwards of 45 minutes for the very last passenger to get cleared. Meanwhile, they have travel plans to get to maybe a cruise ship or other activities. Speeding it up on this side of the border would help us achieve our mission of providing a much better guest experience.
4:50 p.m.
Liberal
Michel Picard Liberal Montarville, QC
Have you estimated the impact from an economic standpoint of this advantage? How does that improve your business? From your side, more generally, what are the economic impacts of working with new pre-clearance zones?
4:50 p.m.
Senior Director, Corporate Development, Rocky Mountaineer
There's no quantum financial impact, but we've definitely done a lot of research and interviewed past guests on the efficiency of moving our guests from Vancouver to Seattle. They recognize that there would be a benefit of actually pre-clearing them in Vancouver versus having an unknown delay in Seattle. It would be ideal for them.
4:50 p.m.
Chief Executive Officer, Canadian American Business Council
Sir, as you know, the Canada-U.S. economic relationship is over $700 billion a year, and 400,000 people cross back and forth every single day. Our members have experienced a lot of pilot projects over the years, usually at the instigation of Canada, on figuring out ways to expand the idea of pre-clearance beyond just air traffic to commercial cargo and commercial facilities.
Take Campbell Soup Company as an example. You know Campbell's soup, “M'm! M'm! Good!” and all that.
4:50 p.m.
Conservative
4:50 p.m.
Voices
Oh, oh!
4:50 p.m.
Chief Executive Officer, Canadian American Business Council
Grilled cheese and tomato soup—it's delicious.
Do you know where their biggest facility in the world is, this good American iconic brand? It's in Ontario. Campbell Soup participates in every single pilot project there is to try to get their soup to market in the United States once it's made in the facility in Ontario. They experience, though, a myriad of different challenges. When you had the mad cow epidemic, for their meat-containing soup, such as beef barley soup, they had a different regime for inspection even though they were part of a pre-clearance project. Whenever anything happens at the border that causes....
In Washington we say that government does two things really well: nothing or overreact.
4:50 p.m.
Voices
Oh, oh!
4:50 p.m.
Chief Executive Officer, Canadian American Business Council
And that's what happens with the border.
4:50 p.m.
Conservative
4:50 p.m.
Chief Executive Officer, Canadian American Business Council
I can say that about the United States because I'm American.
At any rate, when those overreactions occur from time to time, it really impacts business. I don't have a direct number for you on the economic impact of expanding pre-clearance beyond the air environment into marine and rail and all of that, but I can tell you that it's been at the top of the Canadian American Business Council's priority list for the last decade as our number one issue to facilitate commerce between our two countries.
