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|Monday Sept. 24, 2001 | BACK | NEXT «fix
border delays» by
Angelo Persichilli Tighter
restrictions on the Canada-U.S. border following the Sept. 11 terrorists
attacks have the potential to cripple Canadian exports, warns Thomas d'Aquino,
President of the Business Council on National Issues.
The attacks on the U.S. have had a negative effect on the global
economy and will continue to get worse before it turns around, he said, in a
wide-ranging interview with The Hill Times
in which he analysed the state of the Canadian economy in the aftermath
of the terrorist attacks against the United States.
Mr. d'Aquino also said that Finance Minister Paul Martin (LaSalle-Émard,
Que.) should make "a major statement with a clarification as to what the
government policies are going to be. I think that Canadians, markets and
corporations need to have that assurance."
"The overall threat to the Canadian economy is if the U.S. economy
goes more severely into recession than what was possible prior to the
terrorist attack."
Last week David Dodge, Governor of the Bank of Canada, did report that
Canada will likely be in a recession by the end of the year, but also said
that the federal government should hang on.
Mr. d'Aquino said it's important not to jump to conclusions, but said
certain sectors of the economy that have already been hit hard, such as the
airlines, hotels and tourism, will suffer more.
Conversely, Mr. d'Aquino said other industries can expect to see new
spending and growth, as the United States pumps up for what U.S. President
George W. Bush calls "a war footing."
Industries that could benefit include base metals, various areas of
technology and manufacturing and energy, he said.
"So, while I'm not suggesting for a moment that there will not be
a fairly severe hit on the economy, we cannot assume that all sectors of the
economy will suffer the same damage."
But Mr. d'Aquino had another warning.
"We work on the assumption that there will not be another very
tragic event that will create another wave of problems. If that doesn't happen
in the short term, I think we can see both some loss and in some areas perhaps
some gains," he said.
But the weakest spot for the Canadian economy will be trade with the
United States.
"Yes, in a nutshell our vulnerability is on trade," said the
economist. "There are reports of [delays] at the border of four, six or
eight hours. That is very damaging to the Canadian economy and, if it were to
continue, it would mean the shutting down of some production in Canada, in
favour of shifting some of that production in the United States."
According to the president of the BCNI, "It's extremely critical
that as quickly as possible we resolve the border issue between Canada and
U.S. in a way that it works better for both countries."
However, he stressed that there is also interest from the Americans in
solving the problem.
"The assumption on the energy [issue] is that whatever happens, we
need to protect, preserve and enhance energy supply in North America. Canada,
as an energy supplier, can be looked upon as a positive factor rather than
negative.
As an example, Mr. d'Aquino said there could be a time when a
confrontation in the Middle East leads to disruptions in the flow of oil
supplies from the area. The possibility of such a scenario reinforces the
importance of Canada as a strategic supplier of both our country and the
United States, he said.
"We must be prepared for totally unthinkable things happening,
because we now know for sure that our assets in United States and in Canada
are extremely vulnerable."
So what should Canada be doing?
"Our political leadership has to, most urgently, secure our border
access to the United States," and then, "totally revisit the whole
fiscal picture of Canada.
"Certain expenditure must be totally ruled out in favour of new
expenditures that we anticipated were not going to be necessary."
Mr. d'Aquino put defence and security at the top of his spending list,
along with the possibility that "we may bail out of the airlines because
they are experiencing extreme difficulty. There has to be a shift in our
fiscal priorities," he said, adding that the government should also
prepare a contingency plan for the possibility of further terrorist attacks.
But what concerns Mr. d'Aquino the most are the border issues of
security and delays.
"An entire cross border economy has been built on the assumption
that you would have relatively easy access," but if delays continue to be
in the four to 10-hour range on a daily basis, "then you have to consider
what implications there might be on the road." Continued delays could
lead companies to switch their production from Canada to the United States.
In addition to border issues, Mr. d'Aquino said recent events in the
U.S. provide a very powerful incentive for Canadian authorities to address
concerns in other sectors.
"If we do not fix the immigration issue - and here Elinor Caplan
has to fundamentally change her thinking, or change our attitude towards
security and take much more care in measuring what the people are doing in
coming in the country - we are going to have the Americans imposing those kind
of limitations on us."
Mr. d'Aquino suggests a common external perimeter where the policies of
the two countries are harmonized, would benefit Canada.
Otherwise, "We are going to be shut out and the Americans are
going to make it much more difficult for us to access the U.S. That to me is
the most fundamental issue that we have to address as a country."
As for reductions to the bank rate, the BCNI president believes that
there will be more but he didn't want to express an opinion about the need for
a formal budget.
"It all depends on how much importance you give to a budget,"
he said. "The Minister of Finance last year, in his autumn initiative,
made significant announcements." But he immediately added that he
"would recommend a major statement with a clarification as to what the
government's policies are going to be. I think that Canadians, markets and
corporations need to have that assurance."
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