Ted Mackay, Transport Canada Ottawa Update TBWG, Winnipeg Ted Mackay, Transport Canada October 28, 2009

Outline Economy Stimulus program WHTI and cross-border trade & traffic Canada’s gateways New players on Canada-US files North American Leaders’ Summit

Real GDP Annual Growth: 2007-2010 (Percentage Change) Global recession Outlook improved since April Deepest part of recession was first half of 2009

Canadian International Trade: 2007-2009: (Volumes: billions of 2002 dollars) Exports down 30% since January 2007 Imports down 26% from July 2008 to late spring 2009 Export and import volumes up in recent months

Canadian Manufacturing Sales: 2007-2009 (billions of dollars) Manufacturing sales up in July in motor vehicle sector and other sectors Inventories down sharply over past five months

Stimulus Program Infrastructure Stimulus Fund - $3.2 billion of $4-billion committed for 2900 projects Acceleration of Existing Infrastructure Programs Reduction of “Red Tape” - Streamlined environmental reviews, fast-track federal review and approvals, expedited negotiation of projects Building Canada Fund: $2.5 billion in federal funding committed for 78 priority projects worth $8.5 billion VIA Rail - constructing segments of third main line track between Toronto and Montréal Small Craft Harbours -  250 projects in 200 harbours Twinning Trans-Canada Highway in Banff National Park Infrastructure Stimulus Fund - $3.2 billion of $4-billion committed for 2900 projects Acceleration of Existing Infrastructure Programs (e.g. Building Canada Fund) Reduction of “Red Tape” - Streamlined environmental reviews, fast-track federal review and approvals, expedited negotiation of projects Building Canada Fund: $2.5 billion in federal funding committed for 78 priority projects worth $8.5 billion Significant spending on transportation VIA Rail - constructing segments of third main line track between Toronto and Montréal. This will improve reliability, reduce trip times and increase train frequency. Small Craft Harbours -  250 projects in 200 harbours Twinning Trans-Canada Highway in Banff National Park 4

WHTI and Border Trade & Traffic WHTI has not resulted in increased border wait times 97% of travellers arriving at border with WHTI compliant documents U.S. flexibility in implementation However, cross-border trade and traffic dramatically lower

Cross-border Trade Looking at these figures on the top 10 states trading with Canada, you can see the dramatic drop in the value of cross border trade in the first half of 2009 compared to the first half of 2008 indicated in red. I would draw your attention also to the fact that for many of these states, trade with Canada began declining in 2008, with the peak year being 2007.

Cross-border Traffic This table shows the significant drop in the numbers of Canadians crossing into the United States by mode from the first half of last year to the first half of this year. Same day bus travel dropped the most (-34%), followed by same day car travel (-20%).

Cross-border Traffic This is the second half of the preceding table – this time showing the drop in the number of Americans crossing the border from 2008 to 2009. As you can see, the drop in the number of Canadians crossing the border has been far more pronounced than the drop in the number of Americans crossing the border. It is also interesting to note that the number of Canadians crossing the border is twice that of Americans, despite the huge difference in population.

Border Crossing Investments The border continues to be a focus in infrastructure programs/investments. Transport Canada recently created this Land Border Crossings Investment map in collaboration with the Canada Border Services Agency. The map shows all border-related infrastructure commitments made by the Government of Canada, together with its provincial and territorial partners, since 9/11. Since the terrorist attacks of September 2001, the Government of Canada and its provincial and territorial partners have invested over $4.4 billion in border-related infrastructure and technology projects at land ports of entry, approach roads, and key connecting highways. 6

International Bridges and Tunnels Act Adopted in February 2007 Transport Canada engaged in risk-based policy development related to security portion of Act Consultations with industry, site visits to gather information, and risk assessment Future work - further consultations with stakeholders, development of policy options to enhance security at facilities As many of you know, the International Bridges and Tunnels Act (IBTA) was passed by the Canadian Parliament in February 2007. The Act streamlines the process for approving the construction of a new, or modifications to an existing, international bridge or tunnel. The Act also requires government approval for any transaction involving the transfer of ownership or control of an international bridge or tunnel. The corresponding regulations came into force in February of 2009. As for the security portion of the Act, Transport Canada is currently actively engaged in a risk-based policy development approach in order to enhance the security of international bridges and tunnels along the Canada/U.S. border, which are subject to the International Bridges and Tunnels Act, 2007. Progress to date has included site visits to most major IBT facilities in Ontario and New Brunswick, consultation with IBT owners, operators and other stakeholders, and the organization of a risk assessment for this sector Future work on this file includes further consultations with stakeholders, and the development of policy options for a comprehensive International Bridges and Tunnels security program.

North America's closest major ports to Asia Canada’s Gateways Asia-Pacific Gateway and Corridor Initiative Ontario-Québec Continental Gateway and Trade Corridor Atlantic Gateway North America's closest major ports to Asia North America's closest ports to Europe and ships transiting the Suez Canal Essentially, the gateway concept is a way to leverage Canada’s advantages in geography and transportation Our major ports and intermodal rail networks form a system that reaches the economic heartlands of North America. Currently, Canada is implementing the Asia-Pacific Gateway and Trade Corridor Initiative, our flagship gateway strategy, and developing two others – the Ontario-Québec Continental Gateway and Trade Corridor and the Atlantic Gateway. Vancouver and Prince Rupert, two entry and exit points to the Asia-Pacific Gateway and Corridor are North America’s closest major ports to Asia (two to three sailing days closer to Asia than competing ports on the U.S. west coast). The Ontario-Québec Continental Gateway offers direct access to 135 million North American consumers within a 1,000 km radius, less than a one-day trip. On the East Coast, Canada’s Atlantic Gateway provides North America with the closest deep water ports to Europe & the Suez Canal. We are now preparing for the launch of the Ontario-Québec Continental Gateway and the Canada’s Atlantic Gateway.

Manitoba – Centreport Canada Initiative $3.5 million announced October 8, for startup and operation of CentrePort Canada Two new pilot projects also launched: establish a task force to provide simplified one-stop shopping for businesses interacting with CentrePort Canada. explain Canada's tax and duty relief advantages to businesses in Western Canada raise awareness of policies supporting international trade, including foreign trade zone-type programs Centreport is a 20,000-acre inland port and trade area focused on leveraging Manitoba's role as a hub for international transportation, manufacturing, distribution and warehousing Congratulations to Andy Horosko, former Deputy Minister of Manitoba Infrastructure and Transportation, Winner of Canadian Transportation Award, “Transportation Person of the Year” (Oct 22/09)

New Players on Canada - U.S. File Canadian Ambassador-designate Gary Doer US Ambassador David Jacobson Deputy Minister of Transport Canada Yaprak Baltacıoğlu

North American Leaders’ Summit (Guadalajara, August 10, 2009) "We are investing in border infrastructure, including advanced technology, to create truly modern borders to facilitate trade and the smooth operation of supply chains, while protecting our security.” “We will work together to strengthen the resilience of our critical infrastructure, which transcends borders and sustains the well-being of our communities and economies.” Pledge to avoid protectionism and abide by international agreements. Commitment to transparency and consulting civil society. References to NAFTA processes on labour and environment. Next Summit in Canada in 2010 This past August, Mexico hosted the North America Leaders’ Summit in Guadalajara. As the quotes on the slide show, investments in border infrastructure technology were recognized. So too was critical infrastructure protection, perhaps reflecting the work underway between Public Safety Canada, Transport Canada and the Transportation Security Administration on international bridges and tunnels. There was a pledge to avoid protectionism and abide by international agreements. There was a commitment to transparency and consulting civil society, in contrast to the SPP in which a consultative mechanism was established only with the business sector. And there were references to NAFTA processes on labour and the environment. Whether these results point to the kind of agreement or mechanism that might replace the SPP remains to be seen, but we can expect this question to figure prominently as we get closer to the next NALS in 2010.

Highway and Border Policy Thank you! Ted Mackay Highway and Border Policy Transport Canada ted.mackay@tc.gc.ca