Meeting the new neighbour

On the evening of last Aug. 28, as 80,000 pumped-up Democrats streamed into Denver’s Mile High Stadium to cheer Barack Obama’s acceptance of their party’s presidential nomination, a lone Canadian politician strolled the streets of Boulder, about 50 km away from the action. Lawrence Cannon, Prime Minister Stephen Harper’s transport minister at the time and now his foreign minister, was in Colorado to make contact with Obama’s team, but opted against attending the big show that night. Even on a solitary walk, though, he encountered the man of the hour at every turn. Happening upon a movie theatre that was screening a live feed of Obama’s speech, Cannon tried to get in, but the place was sold out. So he ducked into a restaurant. “There were about 75 people eating,” he recalls. “Nobody was talking. They were all glued to the television set.”

Wandering unnoticed on the fringes of a historic American political moment—it’s a plausible image of what’s in store for the Harper government in Obama-obsessed America. What are their chances of making Canada’s presence felt in a transforming Washington, D.C.? Competition for a fragment of Obama’s attention is fierce. Not only does he come to power lugging enormous domestic expectations, he’s also the focus of unprecedented world attention. He has an economic crisis to wrestle into submission, and a war to wind down in Iraq. Still, several key Harper ministers spoke optimistically to Maclean’s about their bid to be heard, on everything from climate change to Afghanistan to aid for the auto industry. “We’re pretty confident,” said Industry Minister Tony Clement, “that there will be an openness to continental solutions.”

The first concerted attempt from the Harper government to crack Obama’s charmed circle came at that landmark Democratic convention in Colorado. Three ministers—Cannon, Clement, and Peter Van Loan, then government House leader, now public safety minister—attended as guests of the National Democratic Institute, the Democrats’ international affairs organization. Cannon and Clement both declined to say which Obama-linked figures they met with, saying the discussions were private. However, Maclean’s has learned that among the key players they gained exposure to through the NDI were Washington lawyer Greg Craig, who was named Obama’s White House counsel this week, and Anthony Lake, an Obama foreign policy adviser who was former president Bill Clinton’s national security adviser.

Clement boasts that the Tories (who hedged their bets by also reaching out to Republican nominee John McCain’s camp last summer) were “aggressive” and “prescient” in their courting of Obama’s coterie. Their efforts to introduce themselves, and a Canadian perspective, followed months of diplomatic slogging, orchestrated largely by Canada’s embassy in Washington, to connect with the teams of all of the possible next presidents, including, of course, Obama’s. Now those nascent relationships will begin to be tested against real issues. And Harper has chosen an unexpectedly ambitious idea—a shared trading system for greenhouse gas emissions—as his opening bid to grab the incoming administration’s policy imagination.

The file makes Jim Prentice, the new environment minister, one of the Harper government’s most important envoys to the Obama White House. That’s because, after three years of aligning his policies with a George W. Bush administration that was doing as little as possible on global warming, Harper must now keep step with Obama’s activism. In both cases, the Tory line goes, Canada had little choice. “We occupy the largest free-market energy system in the world, us and the United States,” Prentice said. “It would be hard to imagine a policy framework between us and the United States that would be discordant.”

For the moment, Prentice can do little more than wait while his officials analyze Obama’s campaign rhetoric and scrutinize signals coming from the Democratic transition team. They’ve identified three figures close to Obama who will probably be big players on energy and climate change. Robert Sussman was the second-in-command in Bill Clinton’s Environmental Protection Agency. Todd Stern was the senior White House negotiator for the Kyoto accord. But the key player seems to be John Podesta, who was Clinton’s last chief of staff, and is one of the Obama transition team’s three leaders.

Podesta is said to covet an “energy czar” role, if Obama creates one—a new White House position along the lines of the national security adviser. He is the driving force behind the Center for American Progress, where Sussman and Stern also work. The highly influential centre-left think tank advocates bringing energy and environmental policy together under the aegis of a new “National Energy Council.”

The council’s rough Canadian counterpart will be the Harper cabinet’s environment and energy security committee, whose key players are Prentice, rookie Natural Resources Minister Lisa Raitt, and the committee’s chairman, Transport Minister John Baird.

“We’re very much at a crossroads,” Prentice said of energy and environmental issues. He named three factors driving decisions: the continuing global economic crisis, the “extraordinarily ambitious” Obama environmental agenda, and the looming Copenhagen conference of December 2009, that will seek global consensus on a post-Kyoto agenda for the fight against climate change.

The Harper government’s goal is to be part of a North American energy market and a carbon cap and trade mechanism. Versions of the concept featured in both Harper’s and Obama’s fall campaign platforms. Companies would face limits on how much carbon dioxide they are allowed to pump out, but they could buy the right to emit more—and thus burn more fossil fuels—from firms willing to sell their own emissions credits.

Obama firmed up his commitment to the concept this week, telling a bipartisan summit of state governors in a video message that his leadership on combating climate change “will start with a federal cap and trade system.” He also repeated his campaign pledge to invest $15 billion a year in solar, wind and other clean energy sources. Some insiders expect his earliest emphasis to be on those investments in technology and “green collar jobs,” rather than pushing ahead fast with emissions caps that would have the effect of boosting the cost of burning fossil fuels as the economy slumps.

Cutting a deal with Obama would win Harper, in one stroke, all the environmental credibility he has so far failed to establish. That potential payoff is big enough for him to risk a bruising battle with the Tory government in his home province. The day after Harper’s surprise floating of the proposal for a Canada-U.S. emissions pact, Alberta Premier Ed Stelmach promised to fight the plan “tooth and nail.” He demanded a seat for Alberta at the negotiating table in any bilateral negotiations. Prentice committed to little beyond “consulting” with the provinces. Alberta Environment Minister Rob Renner doesn’t reject cap and trade outright—as long as it isn’t imposed on his province. “In some jurisdictions,” Renner told Maclean’s, “cap and trade may well be an opportunity for them to tackle their problem.”

The Alberta government’s policy is to try to achieve any emissions cuts solely through implementing new technology. Stelmach rejects Harper’s federal targets, which would cut emissions by 20 per cent from 2006 levels by 2020. Alberta’s own plan delays any reductions until 2020, then trims them just 14 per cent from 2005 levels by 2050. That gap between Alberta’s premier and the Albertan Prime Minister might lead to a nasty constitutional clash over environmental regulation of natural resources, even without the complicating factor of a possible Canada-U.S. climate change accord.

In any case, there are urgent issues that must be settled long before any bilateral greenhouse gas arrangement is hammered out. Arguably most pressing: the fate of the struggling North American auto industry, the top file on Clement’s desk. He plans to travel to Washington and Detroit in the coming days to “gather information” from politicians and auto industry executives. But he has been cautious—just as Harper and Finance Minister Jim Flaherty have been—not to commit Canada to a multi-billion-dollar bailout package to parallel the widely expected U.S. government lifeline to General Motors, Chrysler and Ford.

But the Conservatives can’t go on sitting on the fence about the auto industry’s future much longer. Obama has said he favours a support package, and U.S. Senate Democrats are proposing $25 billion in loans to the beleaguered Big Three. The Bush administration, however, opposes the scheme, since it would tap the $700-billion fund the White House says was meant to strengthen financial markets, not salvage money-losing manufacturers. As that high-stakes struggle unfolds in Washington, the wait-and-see approach in Ottawa looks oddly detached. A U.S. deal would seek guarantees for American employment. Where would that leave the roughly 125,000 Canadians who work at assembly plants and parts manufacturers, the majority relying on the Detroit automakers for their jobs?

Clement’s success or failure in finding a way to fit Canada into a U.S. auto bailout picture is shaping up as the first crucial test of the Harper government’s ability to work in the new Washington. Perhaps surprisingly, given the ideological common ground shared by Canadian Conservatives and U.S. Republicans, Clement predicts Bush’s exit will make Canada’s work easier. He calls Obama “an internationalist,” more worried about good relations with other countries than his predecessor. “He has set himself apart from the Bush administration in that regard,” Clement said, “and that bodes well for Canada.”

If Obama looks promising for Canada, the Democratic-dominated Congress has potential to be more problematic. Canada-U.S. friction is just as likely to start on Capitol Hill as in the White House. Past irritants like the law requiring passports to cross the border, as well as various trade squabbles, have begun with lawmakers rather than presidents. When the 111th Congress meets for the first time on Jan. 6, at least eight new senators and more than 50 rookie members of the House of Representatives will take their seats for the first time. Canadian diplomats aim to meet with all the newcomers within a week of their arrival in Washington.

There will be events at the imposing Canadian Embassy on Pennsylvania Avenue, a stone’s throw from the Capitol Building’s famous dome, and joint functions put on with the Northern Border Caucus and the Friends of Canada Caucus. Canadian diplomats will be focused on getting to know not just the members, but also their staffers, who do much of the heavy lifting on policy.

Some observers fear that the new Congress will tilt toward protectionism, as more Democrats arrive during an economic downturn. As well, Canada is losing two key allies in the House: upstate New York Republicans Jim Walsh and Tom Reynolds, who are both retiring. They were leaders on Canada-U.S. border issues, working to smooth the flow of goods and people between the two countries. On the other hand, Duncan Hunter, a persistent “Buy American” advocate, who wielded considerable power as the ranking Republican on the House armed services committee, is also retiring. Canadian Embassy officials had been fighting his initiatives for years, arguing he failed to recognize the integration of the North American defence industry.

Trying to influence Congress represents the grunt work of Canada-U.S. relations. At the opposite extreme are summit meetings of presidents and prime ministers, sometimes as glitzy as Brian Mulroney and Ronald Reagan together in tuxes, sometimes as laid back as Jean Chrétien and Bill Clinton in golf attire. Failing to deliver that sort of symbolism can hurt a PM’s claim to cachet with a president. When George W. Bush was elected, he broke with the tradition, stretching back to Franklin Roosevelt, of making Canada his first visit abroad—sparking heated debate about Canada’s lost clout in Washington. Harper’s top officials are emphasizing that he is focused on substance, not on the symbolism of when or where he first meets Obama. That could well be a prudent exercise in lowering expectations.

Yet there can be no doubt that Canadians will be watching for any sign of a natural rapport—or failure to hit it off—between Harper and Obama. Worried Tories grasp at potential shared perspectives, frequently pointing out, for instance, that the two leaders are close in age. (Harper is 49, while Obama is 47.) But the more obvious questions swirl around their ideological differences. Harper’s roots are hard-core conservative; Obama was among the most liberal U.S. senators. Still, the president-elect has lately tacked to the centre, and Harper recently asked his party, at its policy convention in Winnipeg, to be pragmatic, “not unrealistic or ideological.”

Assuming they don’t let political convictions get in the way, Harper and Obama will have plenty to talk about. Beyond the pressing matter of the auto sector’s future, and Harper’s ambitions for partnership on climate change, the relationship could hinge on a handful of issues. Late last year, a frustrated Harper told Maclean’s the Bush administration wasn’t very open to Canada’s pleas for rethinking post-9/11 security regulations that have “thickened” the Canada-U.S. border, and he held out hope the next president would be more open to streamlining rules that hamper trade and travel.

As for what Obama might want from Canada, his promise to shift U.S. military efforts from Iraq to Afghanistan suggests one obvious possibility. He’ll want more support from U.S. allies. But what would happen if Obama asked Harper to rethink his election promise to pull Canadian troops out of Afghanistan in 2011? Cannon admitted it’s possible that request will come from the new administration, but he said the withdrawal date is not up for negotiation. “The new U.S. position will not change our position. We’ve made that clear,” he said. “But let’s also make it clear that we’re in there until 2011. There’s not going to be any slack. Our commitment is a whole, total, full-court press.”

The auto sector and Afghanistan, border irritants and cross-border emissions trading—the agenda is packed. The question is whether those early political contacts will mature into real working relationships, whether the diplomatic groundwork pays off in workaday access. Although they are downplaying expectations for Harper’s visible relationship with Obama, the Prime Minister’s aides are undoubtedly hoping for a convincing show of that valuable intangible: personal rapport. Failing that, Conservatives need to work hard to deliver the next best thing in Canada-U.S. relations: political results.

With Luiza Ch. Savage and Nicholas Köhler