Canadian Crossing

Canada just got way more into the auto business

(picture of Daimler Chrysler's Canadian headquarters in downtown Windsor, Ontario, taken by me last month)

Despite the heavy emphasis on the Big Three in the United States, each company has a significant stake in Canada, some of that literally across the Detroit River in Windsor, Ontario.

While the big news was that the United States government is taking a 60% stake in General Motors, the Canadian federal and Ontario provincial governments are taking a 12% stake in the fledgling auto company. The federal government will take 2/3 of the shares and Ontario gets 1/3.

Southern Ontario, an area that feels ignored by the rest of the country (and the province), is heavily depended on the auto industry, whether that be auto plants or companies that make parts for cars or businesses that rely on those workers for shopping and consuming.

One intriguing contrast between the two countries is that while U.S. President Barack Obama is optimistic about that country getting its investment back, Canadian Prime Minister Stephen Harper isn't optimistic.

But the reality of letting GM completely go under would have been devastating for parts of the U.S. Midwest and Canada's Southern Ontario.

Canada's other big automotive news came with the announcement that the Magna auto parts company acquired a 20% stake in GM's European operations with the Opel line.

This becomes significant because it could mean more cars being built in Canada. However, General Motors required in the deal that Opel cars not be sold in the United States. Theoretically, they could be sold in Canada.

Even if everything goes right, the process will be difficult to make Opel cars even in Canada.

Magna is run by Frank Stronach. His daughter, Belinda, might be one of the few Canadian politicians you have heard of. When Stronach crossed the floor (changed parties) from the Conservatives to the Liberals in 2005, she also broke up with fellow Conservative PM Peter MacKay, who subsequently held a press conference with his dog by his side.

Does 'Buy American' mean Canadian, too?

"Buy American" should mean buying American, right?

To add further confusion, there is a difference of opinion of what "American" means. In the U.S., America is considered everything within its border; the rest of the continent thinks America means the whole continent.

The latest stimulus bill has a provision requiring to "Buy American." But Canadians, who know what people in the U.S. mean by that, are concerned of potential protectionism. 

Canada is the U.S.' largest trading partner.

While the U.S. bill is a long way from passing at the moment, Canada wants to make it clear it will react if the protectionist moves are implemented.

But there is still a long way to go to see whether there is a major issue here on either side of the border.

President Obama to visit Canada on February 19

The date has been set: U.S. President Barack Obama's first foreign trip will be on Canadian soil on February 19.

This visit revives a presidential tradition of making the first foreign trip to Canada, which hasn't been done since 1993.

The trip will likely only be for a day. Trade between the countries and the economy will likely be on the docket for any speeches or discussions.

There is the possibility of speaking before Parliament, though it might not normally be in session.

Obama should get a warm reception from the Canadian people, something U.S. presidents don't always receive, regardless of party.

Even though the actual visits are significant, Obama and Canadian Prime Minister Stephen Harper have talked on the phone.

What would you like to see Obama and Harper talk about when they meet in Ottawa? Let us know in the comments section below.

Canada will be Obama's first foreign destination

Shortly after Barack Obama becomes president, he will make a foreign visit to Canada. This is the typical reaction of someone who becomes a U.S. president. Except that no incoming president has made that trip since Bill Clinton in 1993.

George W. Bush went against tradition and practicality by not making an initial visit to Canada. In fact, he didn't make an official trip in his first four years. And this was despite the fact that Canadians participated greatly in helping air flights forced down in Canada on September 11, 2001 (he later did make a trip to acknowledge this, years after the incident).

During the campaign, John McCain did make a trip to Canada to give a speech in Ottawa, one of the rare times a candidate made a trip north of the border during an election cycle.

Obama's state trip will likely mention NAFTA, as is likely to happen during the scheduled meeting Obama has with Mexico President Felipe Calderon this week.

The Prime Minister Obama will meet will either be incumbent Stephen Harper or possibly Michael Ignatieff, current Liberal Party leader and theoretically PM in a coalition government, should that come to pass. Diplomatically, Obama may have to tip-toe on this issue.

Hopefully, Obama and the Canadian PM will build some strong rapport on trade, border crossings, and overall relations between each other's largest trading partner.

 

Canada's path a lot smoother to helping auto companies

The governments of Canada and Ontario will also help out the auto companies. Combined, General Motors will get $3 billion (Canadian) while Chrysler is set to get $1 billion. This comes after the U.S. government agreed to help the two companies.

There are restrictions on executive compensation and must also report "material transactions in excess of $125 million or more."

Canadian Prime Minister Stephen Harper says the aid package is "not a blank check" and the money is supposed to be used to renew the industry.

Ontario Premier Dalton McGuinty says the province contributed 1/3 of the total commitment.  conference.

The drama that came in the U.S. government, particularly from southern U.S. GOP Senators who have foreign car plants in their states, was missing from the Canadian process. There was concern over bailing out private companies in Canada, and the Conservative government didn't seem particularly keen.

But no one actually thought Canada would say no in the way that the Republican U.S. Senators defeated a separate package. The U.S. ultimately took the funds from the original $700 billion (U.S.) bailout for banks and financial institutions.

Also, the pay rate for the Canadian workers wasn't an issue, unlike the pay rate for U.S. workers.

Canada mentioned in U.S. presidential debate

Had to wonder if the U.S. largest trading partner and leading source of foreign oil would get mentioned in a presidential debate.

As it turns out, none of the moderators brought up Canada -- turns out the candidates brought up the topic.

From Sen. John McCain (R-AZ):

"I think we can, for all intents and purposes, eliminate our dependence on Middle Eastern oil and Venezuelan oil. Canadian oil is fine. By the way, when Senator Obama said he would unilaterally renegotiate the North American Free Trade Agreement, the Canadians said, "Yes, and we'll sell our oil to China." You don't tell countries you're going to unilaterally renegotiate agreements with them."

From Sen. Barack Obama (D-IL):

"Now I just want to make one last point because Senator McCain mentioned NAFTA and the issue of trade and that actually bears on this issue. I believe in free trade. But I also believe that for far too long, certainly during the course of the Bush administration with the support of Senator McCain, the attitude has been that any trade agreement is a good trade agreement. And NAFTA doesn't have -- did not have enforceable labor agreements and environmental agreements."

Now that Canadian PM Stephen Harper has won re-election, the likelihood of renegotiating NAFTA is diminished a bit. Though if both sides can benefit (along with Mexico), renegotiation is possible.

Then there was this health-care related note: From McCain:

"Senator Obama wants to set up health care bureaucracies, take over the health care of America through -- as he said, his object is a single payer system. If you like that, you'll love Canada and England."

Obviously, this was a negative shot at Canada. And no, Sen. McCain, what Obama proposes isn't a single-payer system. Many on the left have criticized Obama's health-care plan as not doing enough to reduce costs.

There was one non-mention of Canada that needs to be addressed: From McCain:

"Right now, because of previous agreements, some made by President Clinton, the goods and products that we send to Colombia, which is our largest agricultural importer of our products, is -- there's a billion dollars that we -- our businesses have paid so far in order to get our goods in there."

Sen. McCain should know that Colombia isn't the right answer -- Canada is the U.S.' largest agricultural importer of our products.

U.S.-Canadian relations haven't been smooth in these last 8 years. New leadership on the U.S. side will help, but whomever moves into the White House needs to acknowledge Canada's special role in the continent -- more than just the oil.

Canada gets short shrift in U.S. foreign policy debate

Foreign policy for a country should consist of every country outside its borders. But if you watched the foreign policy debate Friday night between Sen. Barack Obama (D-IL) and Sen. John McCain (R-AZ), Canada was not in the room.

True, there was time spent on the economy (39 minutes), and that did cut into the time. But the debate centered on current hot-button issues, such as Iraq, Afghanistan, and Iran.

But trade, specifically trade with Canada, did come up in the Democratic Party debates, most notably between Obama and Sen. Hillary Clinton (D-NY). The reopening of NAFTA, or the proposed reopening, was brought up earlier this year.

And Sen. McCain has been to Ottawa, Canada's capital, earlier this year as well.

As a reminder, Canada is the largest trading partner of the United States, and the U.S. gets more oil from Canada than any other country.

And since Canada has been ignored by the U.S., unless it's Afghanistan (where Canadian troops are), Iraq, (no Canadian troops), or border protection. The next U.S. president needs to do more with Canada.

Canada's next federal election is October 14

The rumors have been confirmed: Stephen Harper has asked for Parliament to be dissolved. We are having a federal election on October 14.

PM Harper of the Conservative Party currently has a minority government. In the last election, the Conservatives won 124 seats to the Liberals 103.

The Liberals, under the leadership of Stephane Dion, are running on a platform featuring a "carbon tax" to reduce energy use in the country.

For a more detailed analysis, including an examination of how the Canadian election affects U.S. politics, feel free to read this essay that I wrote for my day job.

I would assume that C-SPAN will also air CBC's coverage that night. If that is so, it will help give a broader perspective. I will have my own take here at the Canadian Crossing.

John McCain in Ottawa: full text of the speech

Here is the full text of the speech from John McCain at the Economic Club in Ottawa. Thanks to cbc.ca for the link.

Thank you all very much. I appreciate the warm welcome to Ottawa, and the hospitality of the Economic Club of Canada. The reputation of the Economic Club as a place for serious discussion of policy is well known in America, and I am honored by your invitation. There aren't any electoral votes to be won up here in the middle of a presidential election. But there are many shared interests that require our attention today, and many Canadians here I am proud to call friends.

If you've been following the presidential election, you've probably noticed that Canada comes up for discussion quite a bit these days. And this is as it should be-- because no other nation shares so many ties with the United States. And today the strength of that partnership is more vital than ever. The economic community we have founded, together with our alliance and the values we hold in common, have served our people for decades, and served us well. It will fall to the next president to strengthen these ties still further, adding to the security and prosperity of all of North America.

We in the United States are very lucky, in a way that's easy to take for granted. We are surrounded by two great oceans, and by two nations we count as friends. Think of the fate of other nations, and how much of their histories have been shaped by hostile neighbors. Generation after generation, they live in fear, resentment, and competition harmful to the interests of all. Lost in rivalry and distrust are the advantages of regional friendship and stability. What a blessing it is for the United States to have in Canada a neighbor we fear only on ice rinks and baseball diamonds.

The best American statesmen have always understood that Canada is not some adjunct to America. We are firm and fast friends. We are allies, partners in success and adversity alike, and a great deal depends on preserving that unity.

Trade is just a part of what unites us, but a very important part. Last year alone, we exchanged some 560 billion dollars in goods, and Canada is the leading export market for 36 of the 50 United States. This country stands as America's leading overall export market, and America is Canada's leading agricultural market. With 60 percent of all direct foreign investment in Canada originating in the United States-- some 289 billion dollars in 2007-- our economies draw strength from one another.

John McCain speaking in Ottawa a major deal

It isn't your imagination: a U.S. presidential candidate speaking on Canadian soil. John McCain is scheduled to speak at the Economic Club in Ottawa today on free trade. I can't recall when a presidential candidate appeared on Canadian soil.

Here was my preview along with a look at the latest on free trade between Canada and the U.S. The two countries are each other's largest trading partner.