Home The Ambassador Speeches, Statements and Outreach November 28, 2006

The Calgary Chamber of Commerce

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DATE: November 28, 2006, 12:00 p.m. Mountain Time
LOCATION: Chamber of Commerce, Calgary, Alberta

PRINCIPALS: Hon. Michael Wilson, Canada’s Ambassador to the U.S.

SUBJECT: Canada's Ambassador to the U.S., Michael Wilson, speaks to the Calgary Chamber of Commerce

Hon. Michael Wilson: Well, good afternoon, ladies and gentlemen. Thank you, Steven, very much for your kind introduction. Somewhere or other, somehow my time that I didn’t spend at the London School of Economics has gotten into people’s introductions and I don’t know where that has come from. One of my other musical friends, who is a fellow by the name of Mick Jagger, and they started saying that I met Mick Jagger at the London School of Economics. Well, I didn’t meet him at the London School of Economics. So tell me where you found that reference.

But it’s great to be here at the Calgary Chamber of Commerce and I want to congratulate you for the work that you do. Both in my time in government with my good friend Charlie Maier (ph) at the back of the room, and also in my current capacity, the work of the Chambers across the country is very, very important to providing us with the guidance and advice that’s very important for us to do our work.

Now, it says in my prepared remarks that I’m pleased to be here in Calgary. But considering that in the last 24 hours the temperature outside of my body has dropped 100 degrees, and I mean 100 degrees, I hope you won’t be offended if I just pass over that part of my opening remarks and say I’m delighted to be with you today in this nice warm room.

Now, I’m sure that all of you are watching very closely on the leadership race that’s coming up and who’s going to emerge as the victor. I’m not going to comment on that, but simply to say that whoever that victor is has got big shoes to fill in replacing one of Alberta’s most successful Premiers, Ralph Klein, and I’m sure that Mr. Klein will find it delightful to be back here in Calgary which he has always loved.

But in my remarks today what I do want to talk about is some of the key elements of the Canadian-Alberta economic performance, the relationships that we have both in Canada and in Alberta with the United States, the importance of the cross-border trade flows, investment flows, and also some insights on the last election, the mid-term elections that we just had in the United States.

Now, the relationship that we enjoy with the United States is an unparalleled one. They are by far our most important ally, our most important trading partner, business partner and a very, very good friend. We have a rich and complex relationship with our neighbor to the south and one that has been forged by family ties, by our shared history and our commitment to the same sorts of democratic values that we share, both at home and abroad.

Never has that commitment of promoting democratic values been more visible than currently in Afghanistan where our troops are leading the NATO Force in the southern end of Afghanistan alongside our American and NATO partners. And many of those troops who are serving in Afghanistan have come from Alberta and we can never thank them enough for that.

Now, all Canadians should be proud to hear the very positive comments that I hear as your Ambassador in the United States, particularly from the American military but also from other people that I meet, not just Americans, but from other countries talking about what a great job our men and women and our Armed Forces in Afghanistan are doing. So I think we should all be very, very proud of these people.

We’ve seen our government increase our contribution from 2,300 people to 2,500 in the last few months, and these efforts, along with the efforts of our 35 coalition partners, are designed to ensure that the threats posed by terrorists in that part of the world are addressed abroad before they reach our home here in Canada.

Now, let me comment a little bit about some of the key aspects of our economic performance and how economically robust Canada is a great benefit to North America. Canada exported just short of $220 billion worth of goods and services globally in 2005 and that accounted for 38% of our GDP, and this translates into one out of every five jobs in Canada being trade-related and that makes Canada one of the largest trading nations in the world.

Now, when we look at the Alberta economic picture, we see that it’s very impressive, and you as local business leaders have a lot to be proud of. But the economic success of this province goes well beyond just the numbers. The Province is attracting a young mobile workforce and we’re witnessing the transformation of cities like Calgary and Fort McMurray into bustling centers of commerce and production. Calgary is now second only to Toronto when it comes to the preferred location of Canadian corporate head offices.

And when we examine the trading relationship between Alberta and the United States, it’s also very impressive. Last year Alberta conducted over $69 billion worth of two-way trade with the United States. Ninety percent of all Alberta exports go to the United States and 70% of your imports come from the United States. Now, these numbers are higher than the national average but indicate the deep relationship with Alberta has with our southern neighbor.

And I have to mention that on my recent travels to the western United States, I’ve been routinely asked about the oil sand technology and the Alberta energy sector. Key American decision makers are looking north for the know-how and technology as they look for ways to harness and extract oil resources in their respective states. Alberta has set numerous benchmarks in the energy field, and it’s important that we continue to push and lead research and development in this field to solidify our position as a global leader in energy production.

Now, going back to the national picture, from 1997 to 2005, Canada led the G7 in real GDP growth per capita, employment growth, and in March 2006 our unemployment rate reached its lowest level in over 30 years. By all indications, our economy is operating near capacity and, as you know, this is presenting some unique labor challenges here in Alberta.

But with successful foreign workers permit programs in place, as well as pushing to have more flexible regulations in the recognition and reciprocity of professional and trade accreditations of those coming from abroad, we’re taking the necessary steps to ensure that Canada and Alberta have young, well-educated and diverse workforces.

The current economic expansion is in its fifteenth year and that translates into the second-longest in the post-war period, and the general consensus is that this is going to continue, that growth rate this year is going to be around 2.8% and just a shade lower next year. Our current account has been in surplus for 28 consecutive quarters and our total government debt as a percentage of GDP is down to 26%, and that’s the lowest in the G7. Now, couple this with the low target inflation, which is between 1 and 3%, and the purchasing power of Canadians’ savings, it will remain strong for generations to come.

Now, these and other objectives have been reiterated and developed further by Finance Minister Flaherty in his Economic Statement last week. So what do these numbers mean and why are they important in a bi-national context?

Our fiscal responsibility agenda has principally focused on paying off debt, controlling government expenditures and ensuring effective and efficient inflation control. These fiscal measures have delivered significant benefits and have allowed our government to be more actively engaged within North America and around the globe, including bolstering our development and security commitments in Afghanistan.

Without this fiscal responsibility, we’d be hardpressed in this post-911 world to find funding options to support items such as defense procurement and upgrading our border infrastructure while maintaining at the same time our core social programs and services.

I’d be remiss if I didn’t mention our equally-impressive and important direct investment flows that we and the United States invest in one another. Canadian direct investment into the United States amounted to over $180 billion – that’s the stock of investment in the United States at the end of last year. That was a $14-billion increase from the previous year. And that’s an amount which is approaching that of the American direct investment in Canada which is about $225 billion, also at the end of last year.

And when we look at the direct investment picture in Alberta, close to two-thirds of your FDI comes from the United States. This opening of our economies and our extensive and deepening trade relationship is the direct result of the U.S.-Canada Free Trade Agreement and subsequently the NAFTA. And while a strong dollar has put competitive pressure on the manufacturing sector, and I’m sure even on some in this room today, it’s important to consider that the strength of the loonie has also allowed for increased investment and purchases of productivity-improving machinery, equipment and technology, and that’s particularly important in the energy sector.

Now, all this points to a Canada that has been and will continue to be a trusted fiscal and economic partner of the United States and our other global economic partners. Now, while the numbers I’ve outlined and our tremendous run of consecutive quarters of growth are impressive, Alberta and Canada’s continued prosperity and the quality of life that Canadians and Americans have come to enjoy cannot be taken for granted. We live in a hyper-competitive global marketplace, and while opportunities are as abundant as ever, new competition is emerging and challenging Canada’s position as a global economic leader.

New players such as India, China, Brazil have emerged as major sources of production and services, challenging our presence and dominance in our traditional markets. And in virtually all sectors we’re seeing increased competitive pressures. China, as an example, is now close to overtaking Canada as the largest foreign participant in the United States market. When you look at the figures, China’s 15% market share, ours is 17.2%, and for one month last year, in June, China actually overtook Canada as the number one exporter into the United States. So it’s clear that with that dramatic growth of Chinese exports this presents a serious challenge to our position in the United States market.

So the questions are: How can we build on the global competitive platform that we have already put in place? And how can we make the continent more globally competitive? The good news is that we already have a lot of these tools in place and at our disposal. We laid the foundation for this economic prosperity with the NAFTA. But in order to remain ahead of the curve and continue to reap the rewards of trade and commerce, our nations must act in concert to build on our complementary agenda. An important first step in the framework that our nations agreed upon was the Security and Prosperity Partnership and the creation of the North American Competitiveness Council, and that includes the United States, Canada and Mexico. And I’m pleased to see that Rick George of Suncor is a member of that council. There are only 10 members from Canada.

Now, one of the five priorities outlined in the SPP is the development and diversification of a North American resource base coupled with a commitment to improving transparency and regulatory compatibility. It’s critical that we continue to take the necessary steps to bring our investment and regulatory regimes closer together.

When we look at Alberta’s model, we see that many of these core fundamentals are already in place and working. The Alberta Energy Utilities Board has taken the principles of responsible and sustainable development as well as good governance to a level that’s the envy of many nations and has received praise from organizations such as the World Bank. As the Prime Minister has said, and I quote: Canada is an emerging energy super power, and our commitment and actions in Alberta and elsewhere demonstrate that we’re also a responsible energy super power.

Now, what does this mean in a bi-national context? It means that the United States need not worry about its energy supplies from Canada. We are and will continue to be the United States’ number one secure, efficient, reliable and conscientious energy supplier, and that’s in oil, natural gas, uranium and electricity.

Now, looking at further challenges for North America, we need to be working more collaboratively on research and development, and we need to have a better understanding of how North American supply chains can benefit business around the world and how we can better integrate into those. This means being more aggressive in linking our transportation systems on the continent as well as ensuring that our border security measures are ones that facilitate, not inhibit, the seamless flow of legitimate commerce and labor. This means continuing to enhance our refinery capacity and deepening our heavily-interconnected energy networks. Refineries in Oklahoma and Indiana are beginning to process Canadian crude, creating further downstream benefits and efficiencies in our energy relationship with the United States.

Domestically, Canada must continue to lever its position as the most economic business destination in the G7, boasting not only competitive business costs but also a well-educated and motivated population. We must continue to develop our world leadership in sectors such as energy, aerospace, telecommunications, computer animation, auto parts manufacturing and many more, and again these are themes which Jim Flaherty stressed last week.

Now, let me move from there to a little problem that we see on the horizon. As I highlight the great economic opportunities and our shared prosperity and our major trading relationship with the United States, there is one major over-arching issue that represents a continuing challenge for us at the Embassy, and that’s the border. In recent years and months we’ve seen what I refer to as a thickening of the border. I’m specifically referring to incremental measures that can result in additional costs or delays in crossing the border. A typical example of this is the U.S. Department of Agriculture – I’m going to say the APHIS rule, you’ve probably never heard of it. But it’s a little tax that’s going to add about $100 million to the costs of doing business in the United States and that’s in food inspection. And what it is, it amounts to a tax on airline passengers and all commercial conveyances – that’s ships, trains and trucks – for U.S. agriculture program inspections for which a need has not been demonstrated.

That’s one example. But another one and a much larger one than that is the Western Hemisphere Travel Initiative. And this is a new rule which has both trade and travel implications and for which Canadians must prepare. As a result, effective next January 23rd, all Canadians travelling to the United States and Americans re-entering the United States by air must carry a passport and that’s by U.S. law. The WHTI will not come into effect for those travelling by land or sea until a later date, it could be as late as June the 1st, 2009. So I encourage you all to go out and get a passport before the WHTI is implemented, and to keep it up to date.

Now, Canadians understand the importance of security and the need for cooperation in this field flowing from 911, and one of the things I hear time and again from the people who are involved in this, whether it’s the police, the intelligence, the border inspection people, the immigration people, is that there is great cooperation between Canada and the United States. But we must continue to work vigorously to keep our borders open to legitimate trade and travel, but closed to terrorists, criminals and other threats to our health and safety and that includes food.

But we have to see the implementation of WHTI in a more flexible way, in a way that provides for the major demands on infrastructure, on technology and on the distribution of these cards to people who will want to have them, because if we don’t do that we risk having congestion and confusion at the border and that can affect both travellers as well as truck transportation going across the border both ways.

Now, we at the Embassy are working closely with our counterparts in Washington to press (ph) these concerns as we can and determine also what documents, other than a passport, will be acceptable for those travelling by land and sea once the WHTI is fully implemented.

Now, you as business leaders have a role to play in this and I would encourage you that if you’re talking to any of your counterparts in the United States that you stress these concerns with them because if not, we can have some serious problems at the border and that can, as I said, affect both travellers as well as our economic interests.

Now, let me move on with some closing comments on the mid-term elections which I’m sure that you all watched with great interest. With the shift in power in Congress to the democrats, it’s going to be a very interesting time in Washington. We haven’t seen such a shift since 1994 when President Clinton was in the White House and control shifted in the House as well as in the Senate to the Republicans and that was led by Newt Gingrich and the contract with America.

Now, to briefly recap this time, we witnessed three weeks ago the most expensive mid-term election campaign in American history and one of the closest and most fiercely-fought election in recent times. In the House, we saw 29 seats swing to the Democrats and we’re still waiting for the final results for seven seats which are still being recounted. In the Senate, ultimate control of the Senate rested with the results of three states in particular - Missouri, Virginia and Montana, all of which swung to the Democrats. No Democrat running for re-election in either the House or the Senate lost their seats and no open Democrat seat was lost, and you have to go back many, many years to see that sort of a record. So as President Bush said, it was a real thumping.

But a lesson for all of us is this: You cannot win elections by appealing only to your base. Both parties secured the votes of over 90% of their base. The difference came from the fact that the Democrats won the independent vote by a margin of about 2 to 1.

So what were the big factors motivating American voters? Along with concerns about ethics and corruption which affected about 10 of those House seats, the economy and homeland security, Iraq was one of the most prominent drivers shaping voter intentions. This will be a dominant issue in the next couple of years and will drive relations between the Democrats and the White House during this next Congress. And given the resignation of Donald Rumsfeld on November the 8th and the convening of a strategic review by the President, it’s clear that a different approach to the American strategy in Iraq is likely to surface. The President himself has admitted that he’s not been satisfied with the progress in Iraq and that, and again I quote: That there is a need for adjustment in our Iraq policy.

The Baker Hamilton Commission which was recently... well, about six months ago, was appointed by Congress is expected to report before year-end and it may be early next month. And they’ll have key recommendations on Iraq and may also act as a catalyst for change. Former Secretary of State, Jim Baker, has said, and again I quote: We expect there will be some things in the report that the Administration might not like. So they’re clearly setting up some proposals for change.

Baker’s also said that they must consider options between staying the course and cutting and run. These recommendations will reflect the will of Americans as expressed in the election and they deliberately decided not to make any decisions on recommendations until after the election to see just what the lay of the land was in the Congress and therefore the appetite for change within Congress in the context of the war in Iraq. It’s of course too early to tell what is likely to happen here. What we do know is that the American public and Congress are restless and are looking for options and answers.

Now, moving past the election, the big question is: What will the next two years look like? It may mean a continuation of partisan politics which would present a significant challenge to the Administration as well as the House and the Senate leadership. But interestingly, leading Democrats as well as Republicans are making strong statements in support of bipartisan cooperation. The clear message from voters is that they want Congress to work, they want action on the day-to-day issues as well as Iraq, and they’re fed up with the bitter partisan politics that have been so evidence in recent years.

Many say that if the Democrats cannot respond positively to these views, they’ll lost control of the Congress in 2008, and when I say "many", that’s many on the Republican as well as on the Democrat side.

So what do the results mean for Canada? Regardless of which party controls the House and the Senate, our strategy at the Embassy and with our network of consulates throughout the United States is a three-pronged approach. We’ll continue to work on our issues with the Administration and engage members of Congress, particularly with the new leadership in both Houses, and we’ll do that both in Washington as well as back home in our home districts. It’s important that we understand the American system and which spheres of influence present valuable opportunities to advance the Canadian agenda and our point of view. And now with a different party in the House as well as... in Congress as well as in the White House, it’s going to be a very, very interesting time as we look forward to the different influences that will come into play.

So with this in mind, we in the Embassy together with our government colleagues look forward to working with the 110th Congress starting in January. It’ll be a very busy and interesting period, particularly with that very tight balance of power that we see.

Now, before I close I want to mention that the Embassy shares a special connection with the Province of Alberta. I’m referring here obviously to your former Energy Minister, Murray Smith, and his team who are co-located within the Embassy. This relationship has provided both of us with a valuable opportunity to get the Canadian message out to a broader American audience. This past Summer there was a week-long series of Alberta events at various Washington institutions and locations, from have a 100-ton baby cat oil sands truck and a public concert on the national mall to the inclusion of Alberta culture in the Smithsonian Folklife Festival, forums on Canada-U.S. policy and science and technology as well as round tables on energy and agriculture.

Premier Klein as well as federal and provincial ministers travelled to Washington to take part in these events. They were a tremendous success, in fact made such a splash that the locals in Washington were wondering if Alberta and Canada – and I probably should put "and Canada" in brackets there – had officially taken over Washington.

Now, in closing let me say that the Canadian-American relationship is one that I and I’m sure many of you cherish. It’s one defined by family and friends, our shared history, our commitment to innovation and economic prosperity. It’s one that we must continue to build on and deepen so that future generations will continue to enjoy the benefits of the world’s strongest partnership with our greatest friend, ally and business partners. Thank you very much.

APPLAUSE

Moderator: The Ambassador has kindly agreed to answer some questions if anybody has some from the floor.

Question: (inaudible)

Hon. Michael Wilson: I’m assuming that you can hear the questions from the back of the room. I don’t think that’s anything more than a little excess that from time to time happens in elections, we even have it here. But the reason why I say that is that there is a very, very real appreciation among a lot of Americans of the importance of NAFTA. There are problems, you referred to them, the problems at the southern border and the undocumented immigrants in the United States. This is a major, major issue. It was a key issue leading up to the election and it was one of the I think deciding issues in a number of districts that changed during the election.

But I also have to say to you that we expect that the Democrat Party is going to be tougher on trade issues. People have said that... people in Congress have said it’s highly unlikely as an example that the fast-track trade authority that the American President has provided to him by Congress will be reinstated, will be continued. So we’re going to have a tougher time with trade issues. But I have to say to you that we haven’t had an easy time with trade issues with the Republicans because they... trade issues typically are local in their source and there’s a lot of people on both sides of the House that have difficulty with some different aspects of trade. But will they go as far as even talking in a serious way about revoking that? No, I don’t see that at all. Yes?

Question: (inaudible)

Hon. Michael Wilson: It’s a very complex and difficult world, and sometimes because things aren’t going right you get a sense that in some areas we are slipping, "we" in a generic sense. But the United States is still a very powerful country, and I don’t mean that just in the military power that they have. They’re a very powerful country in the economic influence that they have and the economic strength that they have.

We have our challenges here in Canada trying to keep up with them. We both have our challenges, as I said early in my remarks, about what’s happening with some of these other major countries like China and India and Brazil. So competition, the competitive challenges are... they’re important to our success and we shouldn’t lose sight of the fact that we are doing quite well as a country in Canada – and I outlined some of those indicators – we’re doing quite well. We should recognize those, not lose sight of them, but also recognize that there are things that we have to do, we have to do better. So I don’t get pessimistic in seeing what I see down in the United States, nor do I get pessimistic about what’s going on in this country. Yes?

Question: (inaudible)

Hon. Michael Wilson: I mentioned the challenges of working with Congress. We’ve got a change in the leadership of the Congress. Congress is quite different from the White House. The Congress can move in different directions than the White House. It is a continuing challenge for us in Washington at the Embassy for our Consulates General throughout the United States and for the business community or any other interests in getting our message and keeping our message in front of decision makers in Washington.

So I guess all I’d say to you is that if you have specific interest, whether they’re on the energy side, on the agricultural side, on the trade side, keep doing that job, keep doing that work and not just with people in Congress or people in the Administration, but with your business counterparts in the United States. If you get invited, as an example, to the Annual Meeting of the American Chamber of Commerce, I’d send a contingent down there to make sure that you’re there talking to them about what’s going on in Canada.

We’re pretty focused on what’s going on in Canada and we’re pretty knowledgeable about what’s going on in the United States. In the United States, they’re not that up to date, if I can put it gently, with what is going on in Canada. They’re a very big country, there are just so many things going on in that country and so many things that are going on outside of the country, outside of the United States, that they’ve got a full platter in front of them at all times. So we’ve got to fight to get that message, get our message, get our issues in front of them in the most positive way.

Now, having said that, I have to tell you that in the eight months that I’ve been there the response that I’ve had has been very, very good. I’ve had doors opened to me any time I want to get in and see someone to make a presentation on a particular issue. Canada is respected, it’s well liked in the United States, but we still have to take that message down to them again and again and again, and when we’re tired of saying it, say it a few more times. It’s very important that they hear from as many people as possible.

Moderator: Thank you, Mr. Ambassador.