June 1st, 2009 marks the first day that mandates the use of passports for travel between Canada and the United States. It is a strange, if not bizarre irony, that June 1st also marks an historic, bi-lateral bailout of General Motors by Canada and the United States. Not only we share a border that now requires a passport (or some form of "super-licence not yet available), but we also share 72% of the world's largest company.
Canadians will own 12% of the "new GM" while Uncle Sam will own 60%. The Province of Ontario is an equal partner with Ottawa. The price tag for the Canadian end of this investment is $9.5 billion. For this, Ottawa will get to appoint one member to the new GM board of directors. He or she will have to take their passports to the board meetings.
US Government fostering a "Buy America" program
Before all of this taxpayer-funded euphoria passes too far into history, this is the same US Government that is fostering a "Buy America" program that discriminates against companies located in Canada. Simply put, only products that can warrant that they are 100% made in the USA will qualify for the massive federal infrastructure programs underway in the USA. No such barrier exists in Canada, at the present time.
The implications of this are far-reaching. In the vitally important water and waste water business, Canadian manufacturers have had pipe dug up and replaced. A Halton-based pump manufacturer (that uses US parts) has been precluded from American work. And our Canadian steel companies are feeling it also.
US automakers (like GM), use Canadian parts and steel because it makes sense from a competitive point of view. The imposition of non-market driven forces in either public or private sector procurement plays into the hands of foreign competitors.
Leaders of US based steel manufacturers have suggested that North America needs a new legislative framework to govern trade between our respective nations. The last thing we need is a new "political football" to kick around in Congress, and a minority Parliament in Canada.
If the Government of Canada (with the help of Ontario) can negotiate a multi-billion equity deal with the U.S. to save General Motors (at least for a while) surely these same bright minds can stop this mindless, punitive "Buy America" program before Canadians retaliate with our own program.
That prospect is very real. Later this week, the Federation of Canadian Municipalities will have their annual meeting in Whistler where they will entertain a resolution from Halton Hills suggesting trade restrictions for jurisdictions in the US that refuse to buy products made in Canada. Municipalities representing over one million people in Canada have adopted resolutions designed to attack the "Buy America" program. Our own Made in North America greenhouse rock fight.
The Chinese and Europeans must be laughing at the world's largest market, with the world's greatest trading partners, friends, and now co-owners of General Motors entering to a trade war during this wicked recession. Over 85% of our exports flow to the US, while almost 24% of everything that Americans make comes to Canada.
The passport foolishness is an over-reaction to misguided notions of a porous border. Misconceptions now repudiated by the US security honcho Janet Napolitano, herself. Last year, over 67 million crossings across our respective borders. To my knowledge, all without the requirement of passports, almost all without any memorable incidents, even after a Buffalo Bills game.
Residents of Hamilton know very well that when plants close, they rarely re-open. Our Government needs to summon up the same courage and negotiating skills inherent in doing a deal the magnitude of the GM deal to stop the "Buy America" program in its tracks.
Americans need to realize that Canada is not the enemy. We are great friends and great neighbours, and of course, fellow shareholders in what was the greatest company in the world. Put the "Buy America" program to bed before the first shareholder's meeting.
Eric Cunningham is a former Member of the Ontario Legislature, and a public affairs executive in Canada. Eric can be reached at: Letters@canadafreepress.com
