Canada forms vital ties with U.S.

Kalispell Chamber hears about trade issues

For anyone who has not been paying attention, Canada's economy is booming.

Dale Eisler, Consul General of Canada based in Denver, put a face to that fact when he addressed the Kalispell Chamber of Commerce general membership Tuesday.

But both Eisler and U.S. Rep. Denny Rehberg, R-Mont., who shared billing with Eisler at the luncheon meeting, told the group that it's not all about Canada.

"The relationship between Canada and the U.S. is the most important partnership between any two countries in the world," Eisler said.

With the Canadian dollar nearly at par with the U.S. dollar, Canadian shoppers have been bringing their loonies to U.S. businesses in historic numbers. They've also been helping reshape Eisler's long-held belief that when the Canadian dollar reaches 80 percent in trade against the U.S. dollar, south-of-the-border buying stalls out.

Shoppers may be the most visible sign of Canada's fiscal strength in the Flathead, but the trading partnership between the two countries goes far beyond.

Canada is the largest energy supplier to the U.S. - providing 2.45 million barrels of oil daily, or 18 percent of U.S. imports; 10 billion cubic feet of gas daily, or 86 percent of U.S. imports; and a third of the uranium used in U.S. commercial reactors.

Canada's purchase of more than 21 percent of all U.S. exports and the fact that it supplies 16 percent of our imports, he said, make Canada the U.S.'s most important trading partner.

The converse is true, as well. He said the U.S. buys nearly 78 percent of all Canadian merchandise exports and sells Canada 54 percent of all its imports.

TWO-WAY trade has tripled since the North American Free Trade Agreement went into force in 1989, showing an annual 6 percent growth ever since.

In fact, he said, more than $1 million a minute crosses the U.S.-Canadian border in two-way trade every day.

Montana alone, Eisler said, exported good worth $419 million to Canada in 2006, supporting 24,250 Montana jobs. The largest piece of the pie came in metals trade, followed by forest products and energy in the top three categories.

The country is Montana's largest foreign market, he said. In 2006, Canadians made more than 513,000 visits and spent $112 million in the state.

Both Eisler and Rehberg advocated for lifting limits on the dollar value of goods that citizens can bring back across the border after visiting the other country. Canada currently restricts its citizens to $50 for 24 hours or $200 for any length of time over 28 hours. The U.S. sets the limit at $800 for 30 days.

Rehberg, making a swing through the state after formally announcing his bid for re-election this month, said he is working with the World Trade Center in Missoula; an initiative in Ireland as a gateway to European markets; South American countries; aerospace manufacturer EADS, Boeing Corp.'s competitor in Europe, and others to facilitate new cross-cultural business contacts.

But Canada is by far the biggest presence now.

"Opportunities with Canada are not new," Rehberg said. As lieutenant governor under Montana Gov. Stan Stephens, himself a native-born Canadian, they opened a trade office in Calgary.

It was a search for connections to foster good relationships, something he said he still works at today.

"It does no good to beat up Canada," on issues such as the Cline mine just across the border from Montana's North Fork Flathead drainage, Rehberg said, or the country's coal-bed methane initiatives. Businesses and government instead need to focus on encouraging communication and breaking down trade barriers.

BARRIERS CAN come in seemingly innocuous forms. Rehberg cited a few - the sizes of jars in which Canada will allow baby food to be packaged, meal supplements that are regulated in Canada as drugs, work visas that can create terrorism concerns for U.S. border security, methamphetamine clamp-downs being less stringent on the U.S. border with Canada than with Mexico.

Compounding the problem is that Canada and the U.S. speak different languages with their domestic businesses. Canada's dealings are handled more on the provincial level, Rehberg pointed out, and therefore adapt more easily to local needs. The U.S. deals more on the federal level, bringing in the Environmental Protection Agency for such regional issues as the Cline mine.

His opposition to the North American and Central American free trade agreements, Rehberg told the group, was aimed at closing loopholes that allow people to cheat. But, he said, "I want to create an atmosphere so you can do business."

When it comes to corporations, Canada's corporate taxes, at 27.6 percent, are measurably lower than the U.S., at 39 percent. It has fostered corporate profits that have outstripped the U.S. by anywhere from two to five points as a percentage of gross domestic profit every year since 2000.

Since 1997, the last year that Canada had a federal-budget deficit, the two countries have reversed positions on foreign indebtedness as a drag on gross domestic product, with Canada now at 10 percent and the U.S. at nearly 25 percent.

Among G7 countries - Japan, Italy, Germany, France, U.S., United Kingdom and Canada - Canada had the highest employment growth and "real" gross domestic product, or standard of living, from 1997 to 2006.

And the Organization for Economic Cooperation and Development, a 30-country alliance based in Paris, projects Canada will lead the G7 countries in GDP in 2008 and 2009.

Although they were speaking to a business crowd, Rehberg and Eisler noted the depth of the Canada-U.S. partnership.

Although they have no presence in Iraq, Eisler said his country has deployed more than 18,000 personnel and 22 warships to Afghanistan and the Persian Gulf since 2001, with 2,500 Canadian Forces members now in Afghanistan.

The U.S. and Canada partner in the North American Aerospace Defense Command to secure North American airspace, with both sides making substantial investments in border security and immigration reform.

Environmental treaties dating back to the 1909 Boundary Waters Treaty and International Joint Commission have protected water, air and wildlife. The two countries are partnering in several international forums to address global climate change.

Reporter Nancy Kimball may be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com