Madam Speaker, I will be splitting my time with the hon. member for Brandon—Souris and look forward to his comments.
In relation to the motion on the table today, when I look at the Canada-U.S. relationship I think it is important for us to look at what has happened along the way that has led us to where we are today. I go back to a time years ago when we first structured the initial Canada-United States Free Trade Agreement. It was a historic agreement at that time, but it took some significant doing to get it over the line. That was back in 1988 and it was initially instituted at the beginning of 1989.
There were two leaders of two countries who worked in goodwill at that point in time, Prime Minister Brian Mulroney and U.S. President Ronald Reagan, who recognized we had joint issues here in North America on which we could move forward better together than apart. Trade was one of those issues. There were other issues as well, including continental defence, that were all part of the mix we needed to be addressed in that whole arrangement.
I want to bring members back to a time before the FTA, the free trade agreement of 1988, and look at what eastern Ontario looked like then. I remember being in Ottawa, because I was working in Ottawa then, and the Lord Elgin Hotel, a majestic hotel on Elgin Street, was shut down and ready to be demolished. There were several buildings around Ottawa that were half torn down.
This country had undergone an economic demise after the years of Pierre Elliot Trudeau, when economic sense had left this country, and we had damaged relationships with our most important trading partner. Our economy had suffered so badly that our dollar was plunging. We were in severe deficits and were accumulating mounting debt that we could not get out of. That is where free trade came to be so important.
I remember the election that happened in that year as well, in 1988, and the virtue signalling from the other side, who were saying that this was the end of Canada as we knew it and the complete demise of the nation we had built over the last 120 years. In fact, after the success that the free trade agreement enjoyed, it was refreshing to what the other opposition parties say that it was a great period for our country and one of the best moves forward we have ever made.
However, that is the start of it. It became an election issue, so Canadians got to vote on whether we should have free trade with the United States or continue to have separate arrangements and lots of tariffs between our two countries and a branch plant economy in Canada, which was not serving us well. Canadians decided to look ahead and move forward on a trade relationship.
That led to much of the prosperity this nation has enjoyed ever since. It has not Canada that has enjoyed that prosperity, but all of our trading partners with the United States have enjoyed that prosperity as well. Companies and individuals have enjoyed it. Think about our lifestyle here in Canada versus what they were pre-1988. The free trade agreement was the single defining event that moved us forward as a country and to what was, for a long time, world-leading prosperity among the G7 nations. Now we have come down significantly, but we need to get back there, and this relationship of course is the most important part of that.
One of the important but little-known parts of that free trade agreement is called the energy sharing agreement, whereunder if there were any disruption in the flow of energy between the two countries, we would have to jointly share the reductions that were happening. That would be for both countries, because we actually produce a lot of resources in Canada, ship them to the United States and flow them back across the border as finished products. Therefore, any shortage would affect our consumers on each side of the border, depending where that shortage was or how it happened.
We were facing world security issues at that time. That was an important part of this arrangement, and for the U.S. it was the linchpin of why it needed Canada in this agreement and why it wanted to do this deal. It surprised me in this last round of the Canada-U.S.-Mexico agreement when the then minister of international trade described this as something she was happy to get on the page. I say this because that was our main card in 1988, which was apparently not deemed so by this administration. I am bewildered by that, but I am certain that there must be some reasoning behind it and I would like to explore it further.
There is another agreement called the transit pipelines agreement, signed in 1977 by Prime Minister Pierre Elliott Trudeau. It ensured that the pipeline transit between our countries, our borders, particularly through the Great Lakes, would continue no matter what. However, we now see an interruption of that. A state governor wants to interrupt the pipeline, thinking that it might be environmentally unfriendly, although it has never had an accident. It is just pure politics at this point in time, and we need the U.S. government to step in. We need our Prime Minister to step forward and enforce that transit pipeline treaty with the U.S. President. There is some seniority with the federal government here, and that is going to be our main relation. The irony of the situation is that if we get this pipeline interrupted, Imperial Oil has already said that it is going to have to ship its oil at Superior, Wisconsin, onto tankers to get it to market. It is the same body of water, but we have a pipeline that has never had an accident, and there is more CO2 in tankers than there is in pipelines.
These strains in the relationship between our countries have existed with previous administrations. I would say that between the Chrétien and Clinton administrations, there was some strain. There was more strain under Prime Minister Chrétien and President George W. Bush, but it levelled out for a decade. President Obama strained it some more under two Canadian prime ministers, including by cancelling the initial Keystone XL project, which was then brought forward under a subsequent president and is now reversed by the current president, so there is ongoing friction between our countries, which is becoming more and more frequent. However, it is not just one event but a series of events as we look through history.
The main point is that this relationship between our countries is often exemplified by the relationship between our two leaders, and not just a relationship to have dinner together but a relationship where they actually show up and solve common issues together with the facts on the table, but that is not happening any more. What we need are some serious people to sit down and get this job done.
While a lot of what I have said so far has dealt with energy, I am going to discuss it further because we have a great energy trade between our two countries. We ship a lot of product, a lot of raw natural resource from western Canada, into the United States, and a lot of it is processed there. Some of it is used in the United States, but a good portion of that energy comes back into Canadian markets. That is the result of the free trading relationship between our two countries. That is the way we built it, and that is the way we prospered. However, to suggest that Canada by itself is energy secure in petroleum products is not looking at the entire situation. If our supply of hydrocarbon resources from the United States were cut off in eastern Canada, we would suffer. We are an energy-rich country that suffers at some ends of the country. We need to integrate that and make sure that we continue to prosper together with the United States, and make sure that no parts of our country get cut off.
Let us look at the growth in our energy trade and think about how much energy we export from Canada. In oil alone, we export four million barrels a day out of our production of about five million barrels a day in round numbers. Thus, 80% of our oil is exported primarily to the United States. This is what we have built a lot of our prosperity upon, but it is our balance of trade, which represents $100 billion per year in trade, that matters to us a country as far as our economy is concerned and how we enjoy our lifestyle. However, U.S. energy production has grown as well, from five million barrels a day at the beginning of President Obama's administration to 13 million barrels per day now. Therefore, oil production has grown progressively in both countries as far as the energy supply is concerned. Why? It is because it is a very good resource for our countries.
To conclude, I would love to talk more about how we need to move forward together with an environmental arrangement between our two countries, and how our current environmental arrangements are not doing that well, but effectively we are looking at values between our two countries here. Democracy, respect for human rights, support for universal education, health care and respect for the environment are things that we share, and free markets are the root of all of that. We need to see the issues that divide us abate and the values joining us succeed. I am looking forward to this committee's work.