Thank you, Mr. Chair. I appreciate the opportunity to speak with you today.
First, let me thank the committee for the opportunity to appear before you today to help situate the tourism sector within your investigation of trade relations between Canada and the United States.
As with many other sectors, the U.S. is Canadian tourism's biggest trading partner. With more than 80% of non-resident travel to Canada coming from the United States, the ongoing vitality of our tourism sector depends on overnight and same-day visits from our American neighbours. However, we are continuing to see some very concerning numbers with regard to the softening of this key market. To begin with, the overall number of Americans visiting Canada has slid precipitously in recent years, falling by 41% since 2000. Visitors from the United States made 5.2 million overnight trips to Canada during the third quarter of 2008. This is the lowest third-quarter level since records were first kept in 1972. In that same quarter, travel was down from all of the top U.S. states of origin, while spending by U.S. visitors stood at $2.8 billion, down 8.4% over the same quarter in the previous year.
Those are a lot of numbers, but what do they mean? I can tell you, from my discussions with our members across the country, those numbers mean a great deal to their bottom line and to their future.
For the tourism businesses in your cities, towns, and communities, those numbers mean fewer bookings, fewer patrons, and less stability. They mean that those from the traditional pool of travellers who used to make trips across the border are either not coming to Canada or are staying for shorter periods. They mean that small and medium-sized enterprises--the lifeblood of the Canadian tourism sector, if not the entire economy--are forced to do more with less to remain competitive. They mean they are unable to enhance their services or invest capital to improve their businesses. And sometimes they mean holding off on hiring, or in some circumstances cutting back on staff.
There are a number of factors that contribute to these declines, and while some of them may be beyond our control, this only underscores the need for us to take action where we can to help facilitate the process of crossing our border for our valued American customers.
With this in mind, I will speak today to two key issues for the tourism sector: the state of Canada's border infrastructure and technology, and the looming impact of the western hemisphere travel initiative, WHTI, at land crossings and seaports. As I speak to those two issues, let me take a moment to recognize some of the recent investments in these two areas.
The budget of 2009 promised $12 billion over two years for roads, bridges, and border crossings. Earlier in 2008 the government announced the allocation of $14 million over two years to expand the NEXUS program for high-frequency low-risk border-crossers, and $6 million over two years to support provinces and territories planning to introduce enhanced drivers licences. These are important steps towards addressing the issues of our borders, but there remain a number of key issues that still need immediate attention.
Overall, increased hassle at the border has resulted in the perception of a border that is becoming progressively more difficult and expensive for travellers to cross. Peak period wait times frustrate and sometimes deter potential visitors, and trusted traveller programs, such as NEXUS, often lack the necessary dedicated lane or inspection infrastructure.
Canada's tourism sector understands that in this day and age it is an absolute necessity to have a robust system of security at our land crossings. However, the thickening of the border over the past eight years must be reversed without compromising security interests if we are to encourage the free flow of residents between our two countries.
So what can we do to address these issues? First and foremost, the Government of Canada needs to make the necessary investments in physical and technological infrastructure at our borders. This includes improvements in new construction at border inspection plazas, dedicated lane infrastructure for individuals holding trusted traveller documents that are WHTI-compliant, remote document scanning technology, RFID readers, electronic traveller and congestion information to steer travellers to the least busy land-border ports of entry or rest stops to avoid lineups.
Beyond these improvements to the infrastructure, we need to see a greater commitment on the part of the agencies that oversee the borders to make them efficient, effective, and welcoming to travellers. This includes increases in peak period staffing and 24/7 border services at all major crossings and a new welcome-to-Canada policy for border guards. These officers are the first people that U.S. travellers see on a trip to Canada, and their demeanour leaves a lasting impression on our valued customers.
Of course, all of these issues at our borders will become a stark reality when the western hemisphere travel initiative comes into force at land crossings and seaports of entry on June 2. Announced in 2005, WHTI requires all travellers to present a valid passport or other approved security document when entering the U.S. WHTI has been in effect for air travel since January 2007. The effects on air travellers were always viewed as minimal, given that most air passengers were far more likely to hold passports.
But the larger question for those of us in the Canadian tourism sector, which depends greatly on the short-stay American traveller, is will there be a critical mass of WHTI-compliant documentation in circulation before June 1, 2009, for land and sea border crossings. The last figures that we have are not promising. Just 28% of Americans currently hold a passport, as compared to 53% of Canadians. There are 700,000 Americans who currently hold a passcard. The NEXUS card is currently held by 300,000 Canadians and Americans. Enhanced drivers licences have been put forth over the past few years as a viable option, and we have seen several American states and Canadian provinces move forward on offering these as an option for a secure document. However, adoption rates for these drivers licences, incorporating proof of citizenship, have been modest at best to this point.
Ultimately, this is where we stand, 90 days away from the introduction of these more stringent border policies and at the beginning of our summer peak travel season. Although the recession may dampen American demand for travel, the potential for border problems is a real concern for Canada's tourism sector as we approach this crucial travel period.
What we urgently need at this time is a more extensive and fully budgeted communications initiative designed to alert both Canadian and U.S. travellers to the new land and sea crossing requirements. If we cannot communicate these new requirements, we risk sabotaging some of the marquee festivals and events for this coming summer season. Take for instance the World Police & Fire Games being held in Burnaby, B.C., from July 31 to August 9. Organizers expect attendance for this event to be more than 10,000 athletes and families alone. Or take the upcoming Montreal International Jazz Festival this July, which attracts significant numbers of visitors from the northeastern states. Given the proximity of these venues to the border and the international nature of both events, a great number of participants and spectators will be traversing the Canada-U.S. frontier to attend.
In the case of the Burnaby event, it will be a critical pre-Olympic Games trial run for the staff, infrastructure, and technology of the Canada Border Services Agency. As we approach Vancouver and Whistler 2010, we must succeed in getting potential visitors across our border and into Canada in a seamless and welcoming manner if we are to truly prosper and thrive as a competitive tourism destination.
Thank you for your time. I'll stop there and welcome any questions you have.
Good morning, Mr. Chairman and members of the committee.
The Canadian Chamber of Commerce is pleased to provide input on the vital issue of Canada-U.S. trade relations focused on our joint border. I won't speak on the tourism industry, as Randy has already covered this off well.
As we find ourselves in a global economic downturn, we must make sure that the fundamentals of our economy are working. As a trading nation, access to foreign markets is a key pillar of our economy, and no partnership is more important than ours with the United States.
You all know the numbers well. The Canada-U.S. relationship is the largest trading relationship in the world, with $1.6 billion in two-way trade and 300,000 travellers crossing the border every day. Over one-third of this trade is intra-company trade, delivering of input materials, because we do, indeed, build things together. Major benefits flow from this relationship, with ten million jobs in the United States and three million jobs in Canada, something that our American friends often don't understand.
While the Canada-U.S. Free Trade Agreement helped tear down the barriers, creating an integrated North American economy, security concerns following 9/11 have led to a piecemeal application of new border procedures. We now have a thicker border, one that is more costly for business and travellers, putting at risk many of these ten million jobs.
The new U.S. administration gives us an opportunity to reinvigorate our longstanding partnership, while strengthening our physical and economic security. We need to build on the momentum following President Obama's visit to Canada, where our leaders committed to enhancing North American security and to review the management of the Canada-U.S. border.
In a meeting that I had last year with then Governor Napolitano, it was very clear to me that she understood the importance of a balance between security and border efficiency. She strongly believes that both can be attained, and I think this bodes well for all of us here in Canada.
To fix the border, we have five short-term recommendations and one long-term border vision to share with you today. While each of these recommendations may appear an isolated item, combined they create a more secure and competitive North America.
First, we strongly support the voluntary trusted shipper and traveller programs, which enhance supply chain security and travel security. Properly implemented—and I stress “properly”—these programs should lead to more border-crossing consistency for businesses and lower inspection rates for participants. Border agencies can then focus on the unknown traveller, the unknown trade, in essence, making the search for the proverbial needle in a haystack in a smaller haystack.
While the initial cost to participate in these trusted programs can cost $100,000, and up to two years to get certified, we believe that it is a necessary step for securing our supply chains, and participants should be rewarded with a traffic light that largely stays green when crossing the border. However, a number of companies have reported that their inspection rates did not decrease when they entered the programs, and few believe that the investment has produced enough benefits to justify the costs.
We need to treat trusted travellers and shippers differently from the unknown trade and travel. This includes ensuring a risk-based approach to border management, enhancing the membership in trusted shipper and traveller programs, and providing clear, measured, and reported benefits for participation. We also should expand these programs so that companies that are regulated by other government departments beyond CBSA can also participate, something that's not permitted today.
The second major concern for the Canada-U.S. business community is there are not enough lanes open during peak commercial and travel times. While unfortunately this not a major issue today, hopefully we will soon return to normal traffic patterns. These traffic patterns, especially for commercial traffic, are largely predictable and should drive border staffing levels, not the time of day. We recommend that Canada and the United States offer 24/7 border services at all major crossings, including the operation of border booths and secondary inspections—and I stress including “secondary inspections”—and border-related support services.
The third issue is the lack of a single system for reporting imports and exports at the Canada-U.S. border, which continues to frustrate businesses. Different shipments are regulated by different government departments and agencies. And while Canada and U.S. border agencies are moving towards electronic importing and exporting reporting mandates, other government departments are still using other systems, and in many cases these systems are still paper-based.
Electronic cargo data reporting helps our border agencies manage risk. A uniform system across all departments will boost information sharing within government and simplify the reporting process for business. We strongly support the single window initiative in Canada and the international trade data system in the United States.
We recommend that both governments mandate the implementation of uniform reporting systems and that this be a starting point for a long-term strategy to put in place a fully secure and interoperable customs system within North America. If there's one thing you could do that would really make a difference, and that I encourage you to do, it's bring in the other government departments that are not participating in the single window initiative and ask them why it is that small businesses and all businesses in Canada have to go to systems that require electronic reporting to cross the border, as this is for the good of our nation, for the security of our nation, but government departments don't have to meet the same standard.
A pandemic, natural disaster, or terrorist activity, any of these could lead to full or partial border closures. The border's importance to these ten million jobs calls for a contingency plan to deal with these potential events. We applaud the progress made in this area by the Canadian and U.S. border agencies and encourage them to complete the job. We strongly support that a border contingency plan and the needed communications plan be put in place to reopen the border following an incident, especially for our trusted travellers and shippers.
The fifth issue, as Randy mentioned, is the WHTI, the western hemisphere travel initiative. We are pleased to see that when WHTI will be implemented at land and sea people will be able to use their trusted traveller cards and enhanced drivers licences. However, we remain very concerned that there is not the critical mass of WHTI-compliant documentation in circulation, and this will discourage visitors and increase congestion at the border.
We believe that the enhanced drivers licences denoting identity and citizenship, and containing secure RFID technology, are a less expensive and more practical form of documentation than a passport for the many Americans and Canadians whose only travel interests are limited to land crossings. We applaud the foresight of the provincial and state governments that have put in place this option, and we strongly encourage them to expand participation and encourage others to do so quickly as well.
I'd like to now move on the long term. The recommendations I have just listed are short-term border fixes, but they lay the groundwork for a longer-term border vision. Moving forward, we need to strengthen our long history of border cooperation. Successful cooperative models between our two countries already exist, including such examples as NORAD, the St. Lawrence Seaway, and the International Joint Commission.
We recommend taking border cooperation to the next logical level of cooperation with a co-managed border made up of officials from Canadian and U.S. border and infrastructure agencies, with potentially a rotating chair in the same spirit as NORAD. This concept could be tested using a pilot project at an existing border crossing with low-risk, pre-screened trusted shippers and travellers. We have border crossings that are ready to sign up today. A co-managed border will provide uniform border planning, coordinating agency resources, linking cross-border infrastructure projects, and strengthening port and between-port security enhancement protocol and incident responses.
The strength of the Canada-U.S. relationship and our ability to ensure an efficient border is a top international priority for Canadian businesses. We applaud your recognition of the importance of this issue through these hearings.
Thank you for the opportunity to present today, and we'll be happy to answer any of your questions.
Wonderful. Thank you very much.
I appreciated very much also, sir, your comments when you said we need to facilitate and improve better services when crossing the border, and a new policy with respect to our border staff. I think you were being very kind and very polite, but certainly very firm.
I'll speak from my own first-hand personal experience. As much as I will be constructively critical with respect to coming back into Canada and the way you are questioned, which I find very unacceptable, I will also say.... And this is just a reflection of the comments that you also made, Ms. George, on a co-managed border: it's a wonderful idea, but I'm sure you'll agree it's a two-way street.
We do have hassles. I remember a former colleague, a member of Parliament, with a delegation going down to visit U.S. representatives in Washington, and boy, was he given a hard time because he was born.... I'm not going to name the country; I'm not going to name his ethnicity. But it's a two-way street.
Do you think there's room where they're going to listen? Sometimes we have a mentality there, a block there, that is just so paranoid, for lack of a better word. Have we made progress, in your view, from their side? Because we get comments that things happen there, which we appreciate and understand, but sometimes we're blamed for things that we really are not to be blamed for. How can we overcome it? You referred to Minister Napolitano as well. Again, it's a different mentality from our predecessors. How is that going to blend in?
I have a couple of points.
Ms. George, you spoke optimistically of the prospects in terms of Canada-U.S. and the border issues. Secretary Napolitano's view of border issues is based on the Mexican border, which is very different from Secretary Ridge's view from Pennsylvania. His view on border issues was more shaped by the northern border. There is a growing trend in the U.S. towards trilateralism, where they view the two borders as being the same. This is of great concern to Canada, as we see the situation in Mexico in recent weeks decline precipitously in terms of security issues.
A couple of weeks ago, three of the Republican congressmen and senators I met with had the Fox News view of Canada, that our immigration policy was a root cause of great insecurity to them. I'm concerned about Secretary Napolitano's ominous northern border security study and some of the other initiatives. This is a point for both organizations, that your counterparts.... Congressmen and senators aren't elected or financed by Canadian legislators, but your counterparts in the U.S. have a lot to do with votes and money for American legislators. So I think that those counterparts play an important role in terms of communicating that message.
On the WHTI initiative coming in on June 1, we had an official from the government this week who wasn't certain what the Canadian government's position was on that issue. I, for one, don't believe it's absolutely inevitable. I think we still have an opportunity. If that goes through, what will be its impact? I'll give you an example. You mentioned one event, Mr. Williams, but what about the 2010 Olympics? What will be the effect on the border between Washington State and British Columbia if we don't get this right and get it right quickly?
I'd like to thank our guests for coming today.
I come from the city of London, Ontario, and we're within two hours of four border points, so to us this whole issue of border crossing and access is very important. Because London is a major transportation hub, this is a very crucial issue. So when we talk about border thickening—and we've all experienced that—it causes me some concern.
Most recently, we had some bureaucrats who spoke about the number of Canadians who have passports and the number of Americans. Mr. Williams, it was interesting to hear your stat, that some 53% of Canadians have passports. I think the number we heard the other day was higher than that.
I'm somewhat concerned that you featured the 2010 Olympics as a showcase for Canada for a lot of reasons. If anything, part of it is post-9/11, to say there's a great relationship with a great neighbour, and Americans come take a peak--and the rest of the world, of course. But what I'm not sure of is this. We know new border requirements come into effect as of June 2009. You've indicated the concern about delaying it would only be that the Americans then say that's just one more delay and they can always keep delaying. But is there any sense, from your perspective, that there may be some merit—noting that we've already had one delay—of getting us at least past the 2010 Olympics? Is there an advantage to Canada for that?
While I've heard we can have one-day passes, I don't know what good that is if you've got a two- or three-day event or a series of events you're trying to attend, and you can't see Vancouver in a day, so I'm mindful of the difference between that and an event package. Would you imagine there's some benefit in our trying to negotiate an extension past the 2010 Olympics for the sake of tourism and relationships?
And particularly with the 80-cent dollar right now, it's a more attractive time.
I'm not sure our bureaucrats are of the same view. I'm not 100% certain on that, but I got the feeling that June 2009 was the line-in-the-sand point. I'm sure you communicate the need to do that to them and to other interested parties.
The other thing I want to respond to, Mr. Williams, is a comment you made. I like the comment “Welcome to Canada”, but as I recall, because I do travel between Canada and the United States fairly often, I see a “Welcome to Canada” sign. And maybe because Londoners are nicer, I'm not sure, but when I cross I haven't sensed that hostility—and perhaps it's there—but I have certainly experienced delays. I'm one of those who has a NEXUS card, so that works exceptionally well.
But you made a comment, and I made a note of it, “gun in the holster”, in terms of the concern about our border guards having guns. Most of the border guards I see are sitting in their booths. You wouldn't even know, unless for any reason they came out and decided to do an inspection. I sincerely hope that's not the mindset of your membership, that there's a paranoia about our border guards having guns. Obviously that's been implemented for very good and reasonable security reasons. I hope when you made that comment you weren't thinking that somehow that made us more hostile or somehow less engaging. We may well have other issues, but I don't think it's because we've got guns to protect the security of our border staff. I wonder if you might comment on that.
The comment on the guns is only concerning the perception it gives to travellers. Certainly it's not that we're implying we're a more hostile nation. It's that the perception has changed. We had unarmed customs officers in the past; now we have armed ones. The perception of the traveller is what I'm speaking about.
We've all visited countries in which we have seen armed people at airports and other parts of the destination, and it has an impact on us. I've talked to travellers before who have talked about the number of visible armed people around. It is a perception that this is an issue for travellers.
We have, rightfully I think, made the decision to arm our customs officers. That's fine. My concern is what perception it gives to travellers. All I'm asking is that we balance it with a welcome to Canada. A sign, in my view, is not a welcome to Canada. It may say it, but it doesn't give that impression.
Right now, when we go through lines—I have a NEXUS card, but sometimes I'll go through a line because I'm travelling with someone who doesn't have a NEXUS card—it's merely a glance or a wave forward that we see. I would rather see our people at the border saying welcome to Canada, as a way of introducing the discussion.
I think it's a simple measure, and it helps to offset the effect of the holster.
I have some brief questions. My colleague John Cannis also wants to ask some questions.
Obviously, some of the concerns we have raised and that people have generally are about the border and what's going to happen, whether we're doing everything possible to make the border as friendly as possible. I think it's very important. We also need to have people on staff who are friendly.
Sometimes when I go through the border, I find—on both sides, both going to the U.S. and even coming back home—that there isn't the friendliness there could be. This is a bit strange, given that in Europe—I also have European citizenship, for I was born in Portugal—there are no borders. Governments of all political stripes, beyond the left and the right, have done everything they can to integrate that market and make it very free-flowing for people.
We seem to be going in almost the opposite direction here with one of the closest trading partners we have in the world—historically, and in terms of raw numbers, and everything else. It is a little staggering that we seem to be going back rather than going forward. It's one of the reasons we have raised, even here in this committee, the question whether the government is doing everything possible to delay this proposal that's coming forward. The passport.... All of us are very much concerned.
One thing that also needs to be raised—it hasn't been, and I think it's an important issue that you may want to comment on—has to do with the flow of goods across the borders and whether we are providing enough access points. Windsor was very much concerned that the borders were taking too long to get their goods across. There has been talk for the longest time on the Canadian side about also getting a tunnel towards...passage of the goods and trucks, and so forth.
I'm not sure why there are such long debates, given the economic situation. We want to get things moving. This is vital to our national interest, our economic interest. Anything you can do to encourage government to move more quickly would be great. We'll also do what we can for our part. It's staggering, knowing how important the relationship is on every front, that we could be dragging our feet. I find it quite appalling. It affects not just people down in Windsor; it affects every one of us across this country.
I wonder whether you could comment on that.
Thank you, Mr. Chairman.
Responding to my good friend Mr. Holder, I'd like to think that we have great and wonderful people in Toronto and Scarborough as well, friendly faces. But the feedback I've heard is that it's not the presence or the visibility of a pistol, for example, but more the type of comments that come from that person, who's there to serve and verbally welcome to Canada.
If I may comment on this, it's the type of attitude—and I underline that, attitude—and the line of questioning, to the point that people I was travelling with told the border services individual: if you don't like your job, please go and find another job. That's how miserable.... It must be stressful, Mr. Chairman; I don't know. Certainly I encourage whatever we can do.
Let me ask whether the GST rebate for tourists that was in place had any impact. That's one of the questions, if you can comment on it.
Second, you talked about new construction scanning technology. I know that after we did the review in the committee on industry, post-9/11, there was a great investment made in equipment—scanners, new technology, etc.—that was in the billions of dollars. Have we outgrown that now, or have those proposals not been fully implemented?
With respect to new construction, I want to close off with what my colleague Mr. Silva said, and Windsor's an example: for years there's a back-and-forth question of jurisdictional responsibility. What can we do, beyond being there as we have been collectively? And what is it that you have been doing and can be doing, and what is it that you could suggest to us we can do collectively? We know there's been talk, action, this new mayor, that new representative, etc., which is really one of the problems. Moneys have been invested, feasibility studies have been done, and the bar changes every so many years, etc.
Give us any kind of feedback on that, if you will, please.
And thanks again to our witnesses.
I just want to reassure Mr. Williams that my caucus colleague, , is a champion of tourism. Any opportunity she has, she doesn't miss. Within caucus and to anybody within earshot she'll talk about the importance of tourism for each province in our country.
Tourism is one of the biggest economic generators for our region, British Columbia and the Okanagan Valley, so we're very concerned about the border issues from a tourism and an economic perspective, and for the flow of goods and services.
As my honourable colleague Scott Brison alluded to earlier, working with the Canada-United States Inter-Parliamentary Group, we had a delegation that just recently went, and we're going to continue to address that full-court press, because as you know, President Obama just announced trade initiatives this week, and we're concerned with some of the language that's in there that's more and more protectionist.
Ms. George, I appreciate the work of the Canadian chamber and Mr. Beatty as well in continuing to address this issue. I just wonder what kind of dialogue you have with the U.S. chamber to emphasize the importance of removing that protectionist language within their trade policies.
George's point is an important one involving sub-national protectionism in the U.S. and the vulnerability we have as a country. I would urge the government members to make sure that in our discussions with the provinces this is addressed.
From your organization's perspective, it should be one of your recommendations that this become a fed-prov discussion issue, because it's one of our biggest vulnerabilities. Most of the stimulus money is going to be spent by state-level governments. That vulnerability, which is exclusive to us and not to most of the U.S. trading partners, is a real one.
As a quick point both on the WHTI, the western hemisphere travel initiative, and on country of origin labelling, they're both coming down the track at us. I thought the idea that Mr. Williams had of a “third way” approach with WHTI is an interesting one.
We're going to be in Washington in a few weeks, in April; we're looking at going to Washington to meet with the legislators. It would be very helpful that we have, from both your organizations, some specific and practical recommendations—you could even vet them with some of your U.S. counterparts, as an example, and particularly in border states, for instance, on the tourism side—that we could present to U.S. legislators as options that could make this situation more palatable to our mutual interests and still be realistic. I know this is a fairly significant demand, because it involves your counterparts talking to their legislators to try to find out what might work and doing some of the groundwork.
If we can go down there with a very focused message and a very specific ask, so that rather than simply saying “don't do this” we can say “if you do this, then give us a year in which there's flexibility, in order to adjust to it”, or something.... We need a very practical approach to what is a very critical issue with immediate effects upon us. I'm sure that for Mr. Julian from British Columbia, with the Olympics coming, and for all of us with our trade issues, particularly people with border towns in their ridings, this is a major issue that's coming at us. We need a practical approach that we can market and lobby for with our counterparts in the U.S.
I don't think we can give up on this. I don't think it's too far gone, if we take a practical “third way” type of approach. Can you please provide us, both your organizations, with some very practical recommendations?
I don't think there's any debate required. Does anybody have any comments?
(Motion agreed to) [See Minutes of Proceedings]
The Chair: That was unanimous.
Secondly, we have a request from a senator of the Republic of Colombia who is attending Canadian Labour Congress meetings here in Ottawa on March 24 and 26 and has asked to appear before the committee.
I think it's relevant and current. As a matter of fact, in the draft that we talked about, we have an open meeting. On March 26 we had scheduled one other meeting—one meeting on Canada-U.S. trade for that week and one on something else. So it does, coincidently, appear that we could have this witness appear and make this a Colombia meeting on March 26.
I think we're going to begin a general discussion of South American matters again pretty quickly, with Brazil and others.
If there's no objection, I'll accept that invitation.
Mr. Silva, and then Monsieur Cardin.