From August 8-11, 2010, the Honourable
Judy Sgro, P.C., M.P., who is Vice-Chair of the Canada-United States
Inter-Parliamentary Group (IPG), led a delegation of members of the Canadian
Section of the IPG to the 65th Annual Meeting of the Midwestern Legislative
Conference (MLC) in Toronto, Ontario. The other members of the delegation were
the Honourable Senator Art Eggleton, P.C., Mr. Jim Maloway, M.P., and Mr. Jeff
Watson, M.P., Vice-Chair of the IPG.
THE EVENT
The MLC, which holds a meeting
annually, is a regional association of state legislators from 11 US states, and
includes provincial legislators from 3 affiliate Canadian provinces (see
Appendix A). The purpose of the MLC is to foster regional intergovernmental cooperation
in the US Midwest through the joint consideration of common problems, the
exchange of information and ideas, the sharing of knowledge and experience,
and, as appropriate, the pursuit of collaborative efforts to improve state
government.
DELEGATION OBJECTIVES FOR THE EVENT
Canada and the 11 MLC states share a
mutually beneficial relationship. According to recent figures, nearly 1.5
million jobs in MLC states rely on Canada-US trade, which was recently valued
at $226.4 billion for the region: more than $86 billion was exported from the
11 states to Canada in a 12-month period, while imports from Canada to the MLC
states exceeded $140 billion in the same period. Furthermore, recent data
suggest that Canadians made about 4.5 million visits to the MLC states in a
12-month period and spent almost $1.2 billion, while residents of the MLC
states made about 3.5 million visits to Canada and spent more than $1.5
billion.
The Canada-United States
Inter-Parliamentary Group aims to find points of convergence in respective
national policies, to initiate dialogue on points of divergence, to encourage
the exchange of information and to promote better understanding among
legislators on shared issues of concern. Members of the Canadian Section of the
IPG meet regularly with their federal counterparts and, in recent years, have
attended meetings of governors and state legislators. At these events, Canadian
delegates take the opportunity to engage in the conversations that will help
achieve the Group’s objectives, and to communicate the nature and scope of the
bilateral relationship.
Delegates found the 2010 annual meeting
of the MLC to be a valuable opportunity to discuss the numerous opportunities
for Canada and the US Midwest to collaborate on improving regional trade links,
especially agricultural trade. Furthermore, the delegates benefited from
discussions focused on a variety of policy areas, including healthcare and
water policy in the Great Lakes region. Feeling that members of the Canadian
Section of the Group were able to achieve their objectives for the event, the
IPG intends to attend future annual meetings of the MLC to continue its work in
advocating Canadian interests in the US Midwest.
ACTIVITIES
DURING THE EVENT
During
the 2010 annual meeting, the MLC dealt with a number of topics, including
trade, agriculture, water policy and healthcare. The Canadian delegation was
pleased to discuss a variety of regional issues of national importance for
Canada and the United States. The delegation especially benefited from
discussions on the numerous opportunities for Canada and the US Midwest to
collaborate on improving regional trade links, creating a stronger policy
framework for water management in the Great Lakes region, and transitioning the
region’s economy with a view to establishing a more competitive presence in a
changing global economic environment. The delegation was also pleased to share
some of Canada’s health care experiences with representatives from the US, and
hopes to continue to play an advisory role as the US health care reform
advances.
This report summarizes the plenary and
selected concurrent discussions that occurred at the meeting.
CANADA-US TRADE RELATIONS
Discussions on Canada-US relations
highlighted the importance of trade between Canada and the United States. Some
speakers pointed out that the two countries are “production partners” rather
than just “trade partners.” During the production process, some products cross
the Canada-US border numerous times at different production stages, making it
impossible, in some cases, to determine whether a product is “Canadian” or
“American”. Furthermore, it was pointed out that the value of Canada-US trade
may be underestimated due to the involvement of other countries in the
production of many American and Canadian products (e.g., an American product
manufactured in China and sold in Canada). These products are not always
reflected in Canada-US trade statistics, which suggests a possible
underestimation of the trade between the two countries.
Participants identified a number of
impediments to Canada-US trade, including:
·the absence of a North American Free Trade
Agreement (NAFTA) institution to protect trade gains;
·regulatory differences, which result in
duplicate administrative processes and reduce the efficiency of bilateral
production and trade;
·border thickening, primarily resulting from
security concerns, which increases the administrative costs of bilateral trade;
·the asymmetrical trade between the two countries
since approximately 30% of Canadian gross domestic product (GDP) is linked to
US markets, while about 2.6% of US GDP is linked to Canadian markets; and
·protectionist sentiments on both sides of the
border.
It was pointed out that regulatory
differences between Canada and the US can sometimes lead to higher prices for
consumers resulting from higher costs for producers. For example, since the
American market is relatively larger, the automotive industry first
manufactures products to meet US specifications and then, in order to sell to
Canadian markets, retrofits the same products to Canadians standards. The cost
of the retrofit is typically borne by Canadian consumers in the form of
relatively higher prices. Participants outlined the importance of further
cooperation between Canada and the US in order to harmonize monitoring and
trading regulations between the two countries. It was pointed out that all new
policies need to be broad enough to embrace progress and scientific
advancement; they must also allow enough flexibility to account for the complex
nature of a changing global economic environment.
AGRICULTURE AND FOOD
A number of speakers emphasized the
mutual dependency of Canada and the United States on their bilateral trade,
particularly in the agricultural and food sector. It was pointed out that the
volatility of the global food industry and the emergence of new competitors in
the global marketplace reinforce the benefits of collaboration between the two
countries. Mr. Len Penner, President of Cargill Limited, argued that,
considering that the majority of the world’s population growth is outside North
America, it would be beneficial for North America to emerge as an international
trading block in agricultural and food products.
Participants discussed a number of
trade barriers facing the agricultural and food sector. It was pointed out that
the regulatory differences between both countries are becoming more pronounced
due to the increasing demand for regulation in response to societal concerns
about safety, health and the environment. For example, the local-versus-global
(or 100-mile) debate, the organic movement, and concerns over animal welfare
and sustainable farming practices have contributed to a growing demand for
regulation in the agricultural and food sector. Furthermore, non-compliance
with trade agreement rules was identified as a disruptive factor that can cause
domestic political forces to interfere with obligations in international trade
agreements.
Participants
identified a number of ways to improve the trade provisions for the
agricultural and food sector. Some speakers called for less prescriptive and
more science-based policy as well as a stronger emphasis on research and
development (R&D) in the sector. Mr. Penner emphasized the potential for
North America to lead the way in science and R&D with a view to
establishing new best practices (e.g., pathogen reduction/elimination, which is
critical for food safety).
It was generally agreed that both
countries have an interest in reducing the barriers facing trade in
agricultural and food products. Participants agreed that there is a need for
further collaboration between Canada and the US to promote a more compatible
regulatory environment, including mutual recognition of the other country’s
regulations, further harmonization of monitoring and trading regulations and
standards, and a common approach to future regulation. Mr. Don Butler, Director
of Government Relations at Murphy-Brown, also called on industry to take the
initiative in identifying the main challenges that need to be addressed to
promote collaboration.
WATER POLICY AND THE GREAT LAKES
Discussions on water policy covered a
wide range of issues, particularly in relation to water quality and
conservation in the Great Lakes region. Most participants agreed that land-use
is a critical factor in the allocation and management of water resources.
Consequently, it was generally accepted that water management needs to become
an integral part of land-use planning. Furthermore, participants expressed
concerns over groundwater extraction, pointing out that the current rate of
extraction is unsustainable and is expected to threaten groundwater irrigation
and food security in the future.
It was widely agreed that, for both
Canada and the United States, the Great Lakes constitute valuable environmental
and economic assets that must be protected. Mr. Ralph Pentland, Acting Chair of
the Canadian Water Issues Council, pointed out a number of “new” concerns
related to the Great Lakes, including:
·new toxic chemicals in fish and sediments,
including fire retardants, plasticizers, pharmaceuticals and personal care
products that likely pose a risk to human health, fish and wildlife;
·the increasing rate at which mercury is being
released from coal-fired generating stations into water resources;
·non-native species, which are increasingly
threatening to upset the balance in biological systems and water chemistry;
·continued airborne emissions of potentially
carcinogenic chemicals, many of which end up in the Great Lakes; and
·new challenges facing the Great Lakes due to
climate change (e.g., warmer waters are leading to longer periods of dead zones
in bottom waters (or anoxic conditions), and more intense storms are leading to
increased erosion and pollution from farmlands).
It was
pointed out that Canada and the United States must cooperate further on
increasing the resiliency of aquatic ecosystems in order to protect the
environmental and economic value of the Great Lakes. Three basic principles to
water management were identified:
1.keeping as much water as possible in its natural drainage basins;
2.minimizing the impact of water pollution; and
3.increasing the efficiency of water usage to the extent possible.
Furthermore, participants agreed that
Canada-US negotiations on a revised Great Lakes Water Quality Agreement are
critically important in such a complex, multi-jurisdictional policy area. It
was pointed out that all levels of government (local, regional,
state/provincial and federal) must play their role for the negotiations to
succeed.
HEALTH CARE
Discussions on health care focused
mainly on the general challenges facing US states in the implementation of the Affordable
Care Act (ACA). In particular, speakers emphasized the extensive
coordination efforts and policy changes required to advance health care reform
across the United States. Canadian speakers discussed Canada’s health care
experiences, and shared various lessons that may be useful to the United States
in implementing health care reform.
Participants generally agreed that
preventative practices (in addition to treatment) are critical to achieve
high-quality health care for the long term. Dr. Howard Koh, Assistant Secretary
for Health at the US Department of Health and Human Services, discussed the
importance of prevention for both individuals and communities, pointing out
that individual health is a critical factor in the overall health of any
community. He stated that the overall goal of health care providers is to help
individuals attain their “highest attainable standard of health,” and
emphasized the need for community-level programs on health issues (e.g.,
obesity and smoking) in addition to health care for individuals.
Dr. Raisa Deber, Professor at the
Department of Health Policy, Management and Evaluation at the University of
Toronto, discussed some of the challenges facing health care in Canada,
particularly the tendency to provide too much health care in an effort to
improve access to health services, which has contributed to long wait times and
other service difficulties for patients. She pointed out that many of these
issues could be avoided by focusing more on improving the efficiency of the
health care system rather than providing more funding to deal with the various
problems. Ms. Cathy Schoen, Senior Vice President of the Commonwealth Fund,
pointed out that the efficiency of the health care systems in both Canada and
the US could be improved by considering the approaches that are taken in other
countries. For example, she mentioned Denmark, which has introduced after-hour
care arrangements as well as email visits and consultations to reduce
unnecessary visits to emergency rooms and to increase the overall efficiency of
the Danish health care system. According to Ms. Schoen, the result has been
more timely access to doctors as well as reduced administrative burdens and
paper work for health care providers.
It was pointed out that health care is
a policy area where US states could benefit from stronger partnerships with
those with knowledge of other health care systems worldwide. Furthermore,
innovation and R&D were identified as key areas of cooperation between
Canada and the United States as the countries work to establish a more
competitive North American presence in global markets for health products and
technologies.
TRANSFORMING THE REGIONAL ECONOMY
Looking forward, participants discussed
ways to transform the regional economy of Midwestern US states and Canadian
provinces in order to have a more competitive presence in the global economy.
Mr. Jim Milway, Executive Director of the Institute for Competitiveness and
Prosperity, emphasized the importance of understanding the basis of the
region’s strengths and of being well-positioned to benefit from emerging
economies, such as China and India. Mr. Milway pointed out that, in the present
technological age, advanced education and skills are highly valued assets and
are areas in which North America can excel. It was generally agreed that North
America is relatively well-positioned to compete as a knowledge-based economy.
However, it was also pointed out that there needs to be greater focus on
foundational skills and technical training in order to balance the increasing
emphasis on “higher-level” education.
Participants generally agreed that the
North American Midwest has created a competitive business climate. However, a
number of areas were identified as key challenges for future growth, including
the need:
·to reduce friction in Canada-US trade and to
work towards accessing new markets as a “North American trading block;”
·for better transportation systems and
infrastructure to equip the region with the necessary tools to excel in a 21st-century
economy; and
·for more entrepreneurship and technological
innovation in order to stimulate growth.
Demographic changes and future labour
shortages were also identified as potential challenges facing the region. Most
participants agreed that there is a need to make better use of the existing
labour force by facilitating employment opportunities for well-educated
immigrant populations, and by considering changes to the mandatory retirement
age to encourage longer workforce contributions. It was pointed out that the
latter would also promote “active aging,” which would improve the overall
health of society.
It was generally agreed that the new
technological culture (or “technological revolution”) presents both
opportunities and challenges for the region’s economy. In order to maximize the
benefits of new technologies, it was pointed out that it is important to
understand better the nature and limitations of the new technological era and
to adjust policies accordingly.
Respectfully
submitted,
Hon. Janis G. Johnson, Senator
Co-Chair
Canada-United States
Inter-Parliamentary Group
Gord Brown, M.P.
Co-Chair
Canada-United States
Inter-Parliamentary Group