The Border, Canada-US Trade and the Post-9/11 Security Regime with implications for Immigration and Diversity

Canada-US Border largest bilateral trade relationship in the world ($1.5B per day) Mostly through Great Lakes crossings Cross-border supply chains 150,000 cars per day Increasing global trade through Canada to US Many miles of unfenced, unposted wilderness

Canadian Exports to US 2007 Fuels(25%) Cars, trucks and parts (19%) Electricity generation equipment (7%) Plastics (3.4%) Electrical Machinery (3.4%) All other categories 3% or less

US Exports to Canada 2007 Cars, trucks and parts (22%) Electricity generating equipment (16%) Electrical machinery (7%) Plastics (5%) Fuels (3.5%) All other categories 3% or less

Ontario Economy Largest manufacturing work force in North America except California , manufacturing employment +33% Exports are 59% of GDP, mostly manufactured goods More than ½ of Canadian Exports Automotives account for 38% of exports 80-90% of cars manufactured in Ontario sold in US.

Merchandise Trade Crossing Oil, iron ore and other resource products cross by pipeline, water and rail –largest rail crossing by value at Sarnia (by weight at Fort Frances) Most manufactured goods cross by truck, –almost half on two bridges at Windsor/Detroit and Fort Erie/Buffalo Rapid movement of goods to support just-in- time production systems, especially in automotive industry

Mode Share of Canada – US Trade ModeExportsImports Road (truck)49%75% Rail20%12% Marine6%2% Air5%8% Other (pipeline)20%3%

Ontario Border Cro ssings

Ambassador Bridge: busiest freight border crossing More than 25% of all US-Canada trade, 35% or road trade 10,000 commercial vehicles on a typical day Privately owned, 80 years old, 4 lanes 6 lane replacement planned Additional crossing planned down river

Other SW Ontario Crossings Bluewater Bridge (Sarnia – Port Huron, 12.5% of road trade) Detroit – Windsor tunnel (#1 passenger crossing) CN rail tunnel Sarnia – Port Huron, CPR rail tunnel Windsor – Detroit Windsor – Detroit truck ferry for hazardous materials

Peace Bridge Number 2 bridge, handles most of the freight through the Port of Buffalo Also 80 years old, owned and managed by an international commission Ongoing expansion plans complicated by local and environmental concerns : truck traffic steady but cars down 11%

Other Niagara Frontier Crossings Queenston – Lewiston Bridge (#4 road crossing, freight in transit) Rainbow Bridge Whirlpool Bridge International Railway Bridge (used by CN and CPR)

Impacts of September 11, 2001 on US-Canada Border Near closure of Ambassador bridge, hundreds of factories shut down Heightened security leading to long delays at borders for both freight and passengers Western Hemisphere Travel Initiative: passport or comparable document required between Canada and US –Land border implementation June 2009 –fewer than 30% of Americans and 50% of Canadians had passports in 2007 Summer 2007, delays comparable to 2002

Cross-border supply chains Value added in both Canada and US Automotive industry –1965 Automotive Products Trade Agreement –Components may cross border more than once Agriculture (Livestock) –Pork: piglets raised in Canada, shipped to US for fattening and slaughter Other cross-border supply chains: machinery, mineral energy, forest products, seafood

Frequency of supply and distance (2002 CAR study)

Impacts of border on auto industry 1 hour shutdown of assembly plant costs about $60,000 – this could be the cost of a delay in components delivery US assembled car contains about $1000 Canadian content, Canada assembled car contains $7500 US content (2002 CAR study) Canadian automotive plants more vulnerable to cross-border delivery risk

Current Threats to Ontario’s Automotive Industry Credit crisis, low demand Slow border crossings High dollar Changes in relative labour costs End of Auto Pact protections Shift of US production away from border Potential massive subsidization for retooling US plants

Economic Impacts of Border Delays Labor and capital cost of idling trucks Risk of factory shutdowns due to failure to deliver components on time Inventory stockpiling to insure against delays Reduced tourism 7.1M jobs in US and 3M jobs in Canada depend on cross-border trade (US and Canada C of C) Estimated annual delay cost at over $10B (Ontario C of C).

Addressing the border problem Expand and improve border operations –New and expanded crossing infrastructure –More booths, more personnel –Improved technologies –Better Canada-US coordination Move functions away from the border –Risk-based assessment –E-manifest –“reverse inspection”

Addressing the border problem (cont.) Alternative modes –Road/rail intermodal –Short-sea shipping The perimeter approach