It’s time for Canada to seek other friends besides the U.S.

Canada can no longer count on obvious economic arguments to win over American decision-makers

It’s time for Canada to seek other friends besides the U.S.

Charles Dharapak/AP

From no-brainer to brainless in just a few weeks—Canada’s best interests have once again been trumped by American politics.

Just a few weeks ago, Prime Minister Stephen Harper was calling the approval by the United States of TransCanada’s Keystone XL oil pipeline from Alberta to the Gulf of Mexico a “complete no-brainer.” The benefits to both countries in terms of employment, energy security and trade from the $7-billion project were so obvious and manifest that U.S. President Barack Obama’s consent seemed a sure thing.

Then Hollywood got involved. Superannuated stars such as Robert Redford and Daryl Hannah added their names to over-the-top civil disobedience protests against a “tar sands” pipeline from Alberta. Among the few coherent complaints expressed by green groups was concern the pipeline would cross the Ogallala aquifer that provides several Midwest states with drinking water. The project quickly became a test of Obama’s environmental credentials.

In August, however, an exhaustive multivolume review of the project by the U.S. State Department concluded its potential environmental effect was largely benign. “There would be no significant impact to most resources along the pipeline corridor,” said Assistant Secretary of State Kerri-Ann Jones of the study. And the route across the aquifer was determined to be the “preferred” of all possible options.

Nonetheless, last week Obama chose to ignore his own government’s conclusion and punted a decision on Keystone far into the future. A final determination is now not expected until 2013 at the earliest, even though TransCanada has already agreed to reroute part of the pipeline. The point of this deferral is not practical, but political. It will allow Obama to campaign in the 2012 presidential election without having to worry about conflict over Keystone. Out of sight, out of mind; so much for the candidate of hope and change.

There may be little Canadians can do to offset the political heft of faded Hollywood titans or the imperative of naked political self-interest. But there is plenty we can do to look out for our own interests.

It is becoming increasingly apparent that Canada can no longer count on obvious economic arguments to win over American decision-makers. Plans for a much-needed new bridge between Windsor, Ont., and Detroit continue to be stymied due to aggressive political lobbying by the existing bridge’s owner. Recent U.S. tax policies seek to extract unpaid “taxes” from lifelong Canadian citizens who happen to have been born in the U.S. and have never had a penny of American earnings. Protectionist “Buy American” provisions have resurfaced in Obama’s latest jobs bill—this after Canada fought tooth and nail to get an exemption from similar clauses in his 2009 stimulus legislation. Then there’s the new $5.50 border crossing fee for Canadians travelling to the U.S. by plane.

As the economic trough deepens in the U.S., we can expect American politics to become increasingly insular and illogical. All of which suggests Canadians will have to become increasingly broad-minded and logical.

This inevitably means forging closer ties with Asian trading partners. The Pacific holds plenty of willing buyers for our oil if the U.S. decides it is too preoccupied with politics. And in a similar vein, Harper announced this week that Canada will participate in talks to expand the Trans-Pacific Partnership (TPP), a free trade plan comprising countries across the Pacific Ocean. If such a treaty is signed, the resulting trading bloc will be 40 per cent larger than the European Union, and consisting of countries growing at a much faster rate than those in Europe.

On previous occasions Harper rejected joining the TPP because doing so would require Canada to scrap its supply management of dairy, egg and chicken farms. Opening Canadian markets to Pacific Rim competitors is clearly a wise policy—it will create many more opportunities for Canadian exporters and lower prices for Canadian consumers. Nonetheless, the prospect of a political battle with angry farmers in vote-rich rural Ontario and Quebec was sufficiently daunting for Ottawa. The Prime Minister had thus been cowed by the same kind of narrow political calculations that caused Obama to delay Keystone.

Now, however, it has become obvious that Canada must take the initiative if we hope to enjoy robust economic growth during these difficult times. Dismantling supply management will be an admittedly difficult process; many farmers have a lifetime of savings tied up in quotas and their situation must be handled fairly. But such a move will also allow our farmers to compete—and succeed—on the world market.

Canada will of course never turn its back on the close relationship and history we share with the U.S. But as a vigorous and free-trading nation, Canada must increasingly look west to the Pacific for our future. Just looking south is simply getting too frustrating.

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