I would like to reflect if I can for just a few moments on the challenges—I say challenges but they are opportunities—that lie ahead for us mutually. I will reflect a little on the present politically and then look at our past and suggest that maybe our history is what is going to propel us together into the future. A future that many are portraying as being somewhat bleak, with some reason.
There are very real reasons for the situation in which we find ourselves. But when you tell people from the time they get up in the morning to the time they go to bed at night that it’s doom and gloom, and civilization as we know it is just about over, do you think anyone spends anything? Do you think anyone goes shopping? Do you think anyone wants to invest? This is one of the challenges that we face.
Politically I think this is a very exciting time for you with the new President-elect. This is a person whose banner clearly is one of hope. And he is not just using the word; his very life shows hope but hitched to the wagon of hard work. And I think he has made that very clear.
Canadians watched with interest the U.S. political process and the elections. We love polling as much as you do, and so of course we polled ourselves constantly to see how we would vote in your election.
It was really a strange thing. But the vast majority of Canadians indicated that the President-elect would have had their vote. I believe that’s an opportunity in itself. There’s a high level of expectation of Mr. Obama. One of my many hopes for him is that our expectations of him are not going to be unrealistic. He’s not our president but globally people quite rightly look to what’s going on in the United States.
I think the expectations of this individual are almost superhuman. I hope that he is given a bit of lead time. Even our friends in the media would understand what can be achieved in these times. Everything has its limits. We certainly wish him well and wish you well in the process.
When you look at our history as two nations, we go back a long way, depending on whether you want to look at our founding date or the year 1867. I believe our relationship as two countries is historically without precedent. For 200 years, depending on where you want to measure from, our two nations have lived side by side. I used to say we lived with an unprotected border, but if you try to cross the border into Canada or go back and forth you might want to dispute that. Still, it is really a friendly border.
Of all the countries now in the world, with all of the changes geopolitically, I don’t know if there are any other nations that can stand and look at the rest of the world and say, here’s an example of two countries that really get along well. I think it’s a fantastic thing.
Now we have had our differences in the past and we’ll always have things on which we differ. The last time we actually fought it out, duked it out against each other, was in 1812. Our side won!
I appreciate the fact that you haven’t resented that. I will say that a little over a year or almost two years ago, I had some business in the United States in my former capacity as Public Safety Minister, responsible for a department that is the equivalent of your Homeland Security. We had some meetings hosted off the Eastern seaboard. We were doing some military exercises with you.
Our troops were using one of your amphibious craft, actually one of your destroyers, as part of an operation. Our troops were covertly going ashore to take on one of your giant establishments where the U.S. Marines train.
I spoke with our Prime Minister at that time, to tell him what I was doing. The cellphone kept cutting out from time to time, and I was thinking what to say to him: “Yes, sir, I’m here on the destroyer. Our troops are attacking the Marine base right now off the Virginia coast.” And I thought, “What if the cellphone cuts out right then? That would create some difficulties.”
But we have this fantastic, incredible relationship and history. And if we hit the fast-forward button from the founding of our countries, another date that was really important for us was the signing of our Free Trade Agreement. We have not just this friendly political relationship but an amazing bilateral trade relationship now amounting to $535 billion annually. That is $1.7 billion a day worth of trade going across our common border.
If you’re familiar with the Ambassador Bridge that links Windsor and Detroit, more trade goes across that bridge alone than the entire trade that you have with Japan, for instance. This is a gigantic relationship that we have. A total of 7.1 million jobs in the United States depend on that particular trade agreement.
If you zero in on just California, it’s estimated that up to 840,000 jobs here are dependent on that trade relationship. Of course a proportional number of jobs are dependent on the relationship in Canada. We have very close business ties with California and I’m sure you’re more than well aware of that.
For example, Onex is a great company that has many operations in California. COM DEV, an aerospace company, is very active here. Conversely, your Boeing operation here manufactures our military aircraft. We have science and technology arrangements with UCLA—for example, for research on cancer and stem cells.
These relationships benefit both our countries. Sometimes we are surprised when we hear about certain products that we didn’t realize came from the other country. I’m not advertising but what I’m holding up here is a BlackBerry. And if you’ve been reading the New York Times, you’ll know that President-elect Obama was talking about the fact that they want to “pry”—that’s the word he used—pry this out of his hands.
I say let the man have his BlackBerry. By the way, that’s a Canadian product that has swept the world. A lot of people are not aware of that. But your President-elect endorses it and he gets no kickback from doing so. Did you know that it’s a Canadian product? It’s from the Ontario-based RIM group. This demonstrates that with the amount of trade we do back and forth, we are sometimes blissfully unaware of which country’s products and innovations we are using.
The fact of the matter is that we greatly enhance each other. Our levels of prosperity are higher than they would be if we didn’t have this kind of historical and political relationship. It is based on common roots of supporting democracy and human rights and the rule of law and the great freedoms that we have. And then of course there is this wonderful trading relationship.
All this is background to the present financial crisis. I will take the remaining few moments to let you know how we are doing as a country in the global financial situation, the temporary downturn in which we now find ourselves.
You may have heard that the International Monetary Fund, the World Bank and the Organisation for Economic Co-operation and Development have all said of Canada’s banking system that it is the most stable and most sound in the world today. We are not having the types of crises that are facing many other nations.
If that sounds like blatant advertising, it is. And if you have venture capital and are looking at where to invest with a great sense of stability, Canada is clearly a place for you to be thinking about. These are observations that are made based on the facts and principles of our banking system.
Under Prime Minister Harper, about a year and a half ago our government passed certain laws that helped us stay away from the subprime mortgage problem that has hit so many different areas. We brought laws into effect that virtually barred the problem.
We have laws requiring transparency of capital institutions, including banks, in terms of what they have to report and the amount of asset base they must have relative to the amount of credit that they’re offering. We also maintain a very aggressive regime of tax reduction, federal debt reduction, federal government spending management and—in this particular time—the acceleration of federal infrastructure spending. I know that’s something that’s going to be happening and is happening in the United States.
We are also looking at the expansion of credit capacity, using our federal credit institutions. We have a couple of significant opportunities for doing that and we have increased the ability of the federal government to get into the business of guaranteeing certain types of loans and extending certain types of credit.
Fran Inman and I were talking about the short-term credit that’s needed in container shipping alone, as you may well be aware. In Canada we’re experiencing some of the same challenges at our ports as you’re seeing here in Los Angeles and other places.
We also have come forward to help the automotive industry. We waited to see what your aid package was going to look like because it’s a very integrated industry and we wanted our response to be proportional so that we could do our share in keeping things together. These are some of the steps that we have taken to maintain a fairly stable system.
Now in Canada we are not shielded from the things that the United States or the rest of the world is exposed to. We have had some increase in our unemployment rate but not as much as you unfortunately have experienced here.
We have virtually no problem related to foreclosures in the retail mortgage industry. There are always some foreclosures but we have been spared an acute situation. Real estate of course is taking a hit. The projections through 2009 just came out from our national real estate projection offices, and they show a reduction of 3 percent to 5 percent nationally. That’s taking into account that last year, depending on the area of Canada, there was a reduction of about 10 percent to 18 percent. So whatever you have experienced here on the negative side, we have experienced it too. But it is on a smaller scale because your population is 10 times what ours is. And we are not experiencing these situations as strongly as you are.
If you are thinking about the investment side of your portfolios, and looking for stability and predictability, those are some of the factors that you may want to consider. And you can get in touch with our very open, positive and forward-thinking trade office here in Los Angeles.
We are all facing this together. The GDP of the state of California is fairly close to that of Canada as a whole. Your GDP per capita here is a little higher than ours. We need a few more Hollywood actors and then we’d be there with you.
But we do have much in common. We also have science and technology agreements, research and development agreements that are very attractive for many venture capital companies in the United States. These can provide a lot of the R&D work to be done, and sometimes that will lead to plant construction and manufacturing. At other times businesses use the good tool of scientific and engineering capability that’s available in Canada, along with the R&D attractiveness, to do a lot of product development. Then they move their efforts to the United States or other places for continued development.
These are some of the things that I suggest would be attractive to business in California. You have many areas and many ways in which business here is attractive for Canadians. I’ve talked in recent days to some of our people in different parts of your country and they say that Canadians are still investing here. Canadians are still doing deals and forming partnerships with Americans, even though these developments aren’t highlighted in the media because they may not fit the story line.
So we are open for business. We do have rules and regulations, as you know. And we are looking forward to discussing those and working together on things like environmental issues. In that area, we have put laws in place in Canada requiring a 20 percent reduction in greenhouse gas emissions by the year 2020. We’re looking at cap-and-trade incentives; we’ve been hearing similar notions from the incoming Obama administration.
Of course California is taking a leadership role here. Your governor has been up to Canada. He visited a little more than a year ago. I can tell you his visit was very well received. People enjoyed meeting him. He also brought people from UCLA and the business sector. It was a very positive time. He was ringing the bell, not just for the United States but for California and the great opportunities that are here.
I believe these are developments that give us reason for hope in a time of challenge. I think we need to talk about these positive developments. As I was saying to Fran, those of us who are elected officials can be criticized if we talk about the positive in times like this, when the challenge is very real. If we talk about opportunity or cite an example of a company that is doing well or hiring people, we may be accused of being Pollyanna-ish or wearing rose-coloured glasses, not realizing what’s going on.
We certainly need to talk about the negatives and learn from those. But we need to talk together about the things that are happening that are positive. Nobody else is talking about them. We need to help people realize that there is light at the end of the tunnel. And that light is not a train coming to knock us down. In fact, it’s sunlight and we are moving toward it.
I look forward to working with you. Our Prime Minister looks forward to working with the new administration. We think California and Canada can continue to accomplish great things together that will raise the hopes of the rest of the world.