SINT Committee Meeting

SUB-COMMITTEE ON INTERNATIONAL TRADE, TRADE DISPUTES AND INVESTMENT OF THE STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

SOUS-COMITÉ DU COMMERCE, DES DIFFÉRENDS COMMERCIAUX ET DES INVESTISSEMENTS INTERNATIONAUX DU COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, October 18, 2001

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[English]

The Chair (Mr. Mac Harb (Ottawa Centre, Lib.)): Maybe we can get the ball rolling. We have a fairly full day ahead of us.

This is the Subcommittee on International Trade, Trade Disputes and Investment of the Standing Committee on Foreign Affairs and International Trade, and we are meeting today in order to have an update from our government officials on the state of the nation when it comes to the flow of trade.

The way I thought we would proceed, with your concurrence, of course, is that we allow our witnesses to do their presentations and then we open the floor to questions and answers. Is that agreeable?

We have with us, from the Department of Foreign Affairs and International Trade, Mr. Marc Lortie and Jon Allen. From the Canada Customs and Revenue Agency, we have Mr. Brimble, Mr. Jones, Mrs. Lefebvre. Later on we will have Mr. Perrin Beatty from the Canadian Manufacturers and Exporters. We have witnesses from the Canadian Vehicle Manufacturers' Association, as well as the Canadian Trucking Alliance.

With this, I welcome our witnesses and our guests and ask them to give us a presentation.

Mr. Marc Lortie (Assistant Deputy Minister (Americas), Department of Foreign Affairs and International Trade): Thank you very much, Mr. Chairman, members of the subcommittee. My name is Marc Lortie. I'm assistant deputy minister responsible for the Americas in the Department of Foreign Affairs, and I'm very pleased to be with you this afternoon.

[Translation]

Mr. Chairman, a great part of our energy is directed towards the issues at our common border with the United States, since we need to ensure that this border is effectively managed. We are facing very difficult challenges at the present time.

As you know, the trade relationship between Canada and the United States is the largest in the world. Our two-way trade exceeds 1.3 billion dollars per day, which amounts to 85% of our total trade and 25% of U.S. trade. We are two large trading nations and any problem at the border has very direct consequences on the economies of both countries.

[English]

Following the September 11 attacks, border agencies on both sides of the frontier moved to the highest level of alert. Both countries responded with new measures intended to alleviate the worst of the delays. Additional emergency resources were deployed and, through a variety of cooperative means, the backlog was cleared within days.

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However, up to today we still encounter delays and we still encounter a lower traffic flow on the commercial and passenger sides. It is due no doubt to the political situation, but especially to the economic issue, which has some immediate relevancy. My colleagues from CCRA are going to give you more details on that.

Immediately after September 11, and given the fact that there was a high level of alert, we engaged with the American administration immediately.

[Translation]

In this regard, I would like to mention that contacts took place immediately at the political level between minister Manley and his counterpart, Secretary of State Powell. They indeed met face to face in Washington on September 21. They discussed border issues in order to ensure that these aspects receive the required attention at the political level.

The Prime Minister met President Bush on September 24 to discuss bilateral relations, including border issues. They both agreed that proper management of the border by our two governments is essential in order to ensure that our respective economies will not suffer from a higher level of alert at the border.

There has also been a series of visits to Washington. Solicitor General MacAulay went to Washington to meet with U.S. Attorney General John Ashcroft. Yesterday, the Deputy Prime Minister of Canada, the Honourable Herb Gray, was in Washington. Tomorrow, Minister Collenette will also go to Washington.

So, there has been a series of meetings at the ministerial level. At the level of senior officials, such as our colleagues at Revenue Canada, at Immigration and Transport there have also been numerous meetings, which are ongoing, to deal with border issues.

[English]

A new actor on the management of the border arrived on the scene in the United States. On September 20, in a speech to Congress, President Bush announced a newly created position. This newly created position is the homeland security director and he appointed Governor Tom Ridge of Pennsylvania to assume these new responsibilities.

Governor Ridge will also have a responsibility for border management. He has an overall responsibility to combat terrorism and to develop anti-terrorism measures in the United States, and he will have an overall coordinating role in the United States.

It is a new position with a new actor on the U.S. side.

Minister Manley has been touch on a regular basis, by telephone, with Governor Ridge. He took his function officially ten days ago, and Mr. Manley is planning to go to Washington soon to have his first working meeting with Governor Ridge. We expect it will be done as early as next week.

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Canada and the United States have long recognized the importance of the border for our mutual economic well-being. We have a variety of mechanisms that have been in place for years to allow agencies and various departments of the government to cooperate and find creative and effective ways of making the border secure and seamless. If you will bear with me a few seconds, I will name certain forums. We have the Shared Border Accord, involving immigration and customs officials; we have the border vision group, involving immigration officers; we have the Canada-U.S. Cross-Border Crime Forum, which basically involves law enforcement and intelligence agencies; and we have CUSP, the Canada-U.S. Partnership, where most of us meet in a collective way with the various U.S. agencies. This is done under the chairmanship of the State Department in the United States and the Department of Foreign Affairs and International Trade on our side. These groups meet on a regular basis to discuss ways and means of making the border both safer and more efficient.

The challenges ahead of us with regard to border management are very important. We are facing competing demands between security and ease of travel. As you well know, it will mean direct economic consequences for all our communities if the border does not function smoothly. Therefore, at this moment, at the level of officials and at my level, our concentration on border issues is of the highest importance. Last week we hosted the senior representative from the State Department here in Ottawa to launch a series of discussions with them at the level of officials to ensure the good functioning of our border.

All our 23 consulates in the United States, especially three of them closer to the border, are intimately following the situation on the border on a daily basis, as is our very efficient embassy in Washington as well. Therefore, I will stop here just before you open this to questions and give the floor to my colleague from CCRA, who will give you a portrait of the border situation at this moment.

The Chair: Thank you very much, Mr. Lortie.

You have my apologies. When I made the introduction, I introduced Jon Allen, but I meant to introduce Mr. John Morrow, who's the replacement for Mr. Allen.

[Translation]

Mr. Denis Lefebvre (Assistant Commissioner, Customs Branch, Canada Customs and Revenue Agency): Thank you, Mr. Chairman.

My name is Denis Lefebvre and I am Assistant Commissioner of the Customs Branch of the Canada Customs and Revenue Agency. My colleague, Mr. Brian Brimble, who is Director General, as well as Mr. Brian Jones, Director of the Customs Branch are here to assist with the technology.

Mr. Lortie gave a very good introduction on the issues and challenges at our border.

[English]

and I'm suggesting that I would like to go immediately to offer a presentation my colleagues have prepared. It deals with the very specific issue of traffic flow and waiting times at the border, in particular since September 11.

Brian.

Mr. Brian Brimble (Director General, Operational Policy and Coordination Directorate, Customs Branch, Canada Customs and Revenue Agency): Thank you, Denis.

Good afternoon, everyone.

What I'll do is run through a series of slides. The objective of the presentation this afternoon is basically to provide a context as to what has happened since the incidents—

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[Translation]

Ms. Francine Lalonde (Mercier, BQ): Could we have the text that goes with the slides?

Mr. Denis Lefebvre: Is it O.K. if we hand it out afterwards?

Ms. Francine Lalonde: It would be nice to follow the presentation with the text in hand.

An hon. member: Right away?

Ms. Francine Lalonde: If we could.

The Chair: Do you have enough copies, first of all?

Mr. Denis Lefebvre: Yes.

The Chair: It would be a good idea. You may proceed.

Mr. Denis Lefebvre: We will have it distributed.

Mr. Brian Brimble: Thank you.

[English]

As I was mentioning, we're trying to provide a basic context as to what has happened since September 11 and the incidents at the border. We wish to inform the members of the committee about traffic volumes and about the current wait time situation for both Canada-bound and U.S.-bound traffic and for commercial traffic as well as passenger traffic. We'd also like to discuss very briefly with you certain options and certain efforts that are being made to minimize any further delays.

I'd first like to talk very briefly about the action that has been taken thus far. As Mr. Lortie mentioned, the response was immediate at the time of the September 11 tragedy. We immediately implemented a number of measures to deal with terrorists and unwanted goods that could be crossing our border. The specific action taken involved the immediate implementation of a state of high alert. We instructed our customs inspectors to increase questioning and do more intensive ID checks. This resulted of course in increased examinations and increased referrals to the immigration and other government departments. At the same time we activated a command centre in headquarters to monitor ongoing activities on a 7-24 basis. Similarly, we had emergency command centres in all our regions across the country. We increased resources at all ports of entry through the use of overtime and callback to ensure that security was maintained and that we were facilitating the flow of trade and travellers to the best of our ability.

During the immediate crisis, we processed approximately 240 flights that had been diverted from the United States, involving the clearance of over 35,000 travellers. We provided various types of assistance to U.S. Customs at the national, regional, and local levels. We do have very good working relationships with our colleagues on the American side of the border. Mr. Lefebvre was in contact with his counterpart, as were many other people in our organization, right down to the local level at ports along the border. We also established a web page with published north- and southbound wait times for major points of entry to assist shippers and the travelling public.

Now, if I may, I'll just turn to the volume data. Before I move into specific information on that, this is a chart that shows traveller patterns. The focus here is on the travelling public, not on commercial traffic. It basically shows the magnitude of importance of Ontario, Quebec, and British Columbia on the national scene. For the purposes of the rest of this presentation and in the interest of time, we're going to focus on key cross-border points and three major airports in these regions of the country.

Turning to specific information on traffic volumes, these charts—I have a series of them I will run through with you—show traveller volumes for a 12-day period.

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On the left you'll see the number of cars, and we have three periods reflected. The blue line shows the period from August 29 up to the tragedy on September 11. Then we have the green line, the immediate aftermath for a period of 12 days, which shows a very significant drop. The orange line shows the period September 24 to October 8, where the volumes recover somewhat.

As to the steep spikes in the period August 29 to September 10, the first spike reflects the long weekend, Labour Day, and the second spike is the weekend just prior to the incident. It shows that there was a huge drop following September 11. Weekend traffic since that time has been considerably less pronounced, but the level has bounced back somewhat without the weekend spikes.

If I could turn to the next slide, it shows the Ambassador Bridge in Windsor. Again, you'll see the same sort of pattern. This same type of pattern emerges in most of these slides, showing an initial, huge drop following September 11 and then a rebounding and settling at a level somewhat lower than the previous norm. In the case of the Ambassador Bridge, I think the volume is 18% to 20% less than it was, but it is showing an upward rebound.

As for the Pacific Highway, there's a trend similar to the ones we've seen before.

If I can move on to air travellers, this is a slide that contrasts the volume of travellers this year in September and that of September 2000. The orange colour on the screen shows the experience in September of this year, and the blue or black shows the experience in the previous year. You can see that there was an immediate crash of the volumes in terms of flights and air travellers on September 11. It has recovered somewhat, but, as you can see, it's still well below the level that was being experienced a year ago.

In the case of Dorval, there are roughly two thousand per day fewer than the volume a year ago. If we look at the situation at Pearson, it's again a very comparable sort of situation. The volume is probably somewhere in the order of five thousand fewer travellers per day than the experience one year ago. Similarly, if we move on to Vancouver, you'll again see a recovery in air traffic. It's the same sort of pattern, but it's at a level of roughly one thousand travellers or so a day fewer than was the case a year ago.

If I could move on to commercial traffic, I would just at the outset point out that trucks move around 70% of our trade between Canada and the United States. Two-thirds of all international trucks cross into Canada via the Ontario border, so for the purposes of our discussion here we are putting the focus on the Ontario experience.

The commercial context does show that Ontario, Quebec, and British Columbia combined represent 90% of import trade, and Ontario alone accounts for roughly 63%. These provinces also account for 88% of exports, and on the export side Ontario has around 61% of that volume.

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The most important portal for trade is the Ambassador Bridge, and the Pacific Highway and Lacolle also figure importantly in our Canadian experience.

In 1999, 90% of imports and 88% of exports were processed in the provinces of Ontario, Quebec, and B.C., with 63.5% of total trade in Ontario.

If we look at volumes at key sites and focus on commercial shipments and releases—that is, the number of individual shipments that has been experienced—from September 12 to 21 there was actually an increase over the pre-September 11 period. This probably represents some stockpiling, as people responded to the crisis situation.

The experience from October 1 to October 10 shows volumes at just about the same level. Compared to the same period in 2000 there was less volume, and this was consistent right across the country at all major ports of entry.

On wait times from September 26 to October 10, in the case of Lacolle there have been spikes of up to two-hour and one-hour waits in northbound traffic. I should indicate that our readings are in four-hour periods, beginning at 6 a.m. and continuing until 10 p.m. As we've noted, wait time delays of 30 minutes or less are what we would consider normal, given the nature of our function at the border.

On wait times for commercial northbound traffic, again there were brief periods of significant wait times, but these were relatively isolated, with waits of up to one and a half and two hours in isolated incidents.

On wait times for southbound travellers, there were very limited delays, but in some instances there were delays of up to one hour.

On wait times at Lacolle for commercial southbound traffic, there were limited delays of up to 90 minutes in some instances.

The Windsor Bridge, as I mentioned earlier, is the largest entry point for traffic into Canada. There were manageable wait times there, up to October 10.

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On commercial northbound traffic on the Windsor Bridge, there were wait times of up to 90 minutes at certain periods of time. On September 19 there was a significant period when there was a 90-minute wait. More recent experience has shown periodic spikes in wait time, but for the most part it has been manageable.

Wait times for travellers on the Windsor Bridge southbound into the United States were significant, at one and a half to two hours in many instances. The dates here were up to October 10, so this is continuing pretty much as we speak.

Wait times on the Windsor bridge for commercial southbound traffic were again up to one and a half hours, depending upon the time of day. This is data that was being reported by U.S. inspection agencies.

Data on the Pacific Highway for travellers northbound showed limited delays in the period up to October 10.

Commercial northbound traffic on the Pacific Highway experienced delays of 30 to 60 minutes, depending upon the time of the day and the day of the week.

Pacific Highway southbound wait times showed very significant delays, in many instances, moving into the United States. That continues as we speak.

Wait times for commercial southbound traffic on the Pacific Highway were half an hour and even up to an hour, depending upon the day.

We will make available to the committee a complete set of these charts, which will provide details for the full time period I have been dealing with here.

I will turn now to talk very briefly about actions we have planned.

We are continuing in a heightened state of alert, and it is our intention to do that for as long as necessary. We are focusing on risk. Our efforts are to facilitate low-risk trade and travellers and to concentrate on high risk. So we adjust our operational activity based upon that evolving risk assessment.

We are pursuing the legislative change in Bill S-23, which is required to support the customs action plan. We are enhancing our protection initiatives at airports and seaports.

We are also facilitating, as I mentioned earlier, the majority of low-risk traffic that enters Canada by the land border. We are continuing to consult with private sector partners on the best ways to balance increased security and ensure seamless trade flows.

We are also assessing the feasibility of accelerating certain parts of the customs action plan to ensure that initiatives that enhance the protection of Canadians are moved on as quickly as possible.

We are strengthening our contraband detection technology to identify high-risk people and goods, and we are adding 130 additional customs officers, who will be located at airports and seaports.

As I mentioned earlier, risk management is the focus of our efforts. We're using every effort to expedite advanced passenger information and passenger name record technology to provide us with key information on travellers in advance of their arrival in Canada so that their crossing of the border can be facilitated.

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We are enhancing our access to Customs and Immigration databases by replacing old technology. We're introducing the customs intelligent management system, a national repository for intelligence data.

We're also introducing customs-controlled areas at ports to provide greater security for Canadians and to provide more flexibility in supporting the transportation industry.

I'll close on the last slide by pointing out what traders can do during these trying times to facilitate trade and to facilitate crossing the border.

The first point I would make is that we are encouraging traders to take advantage of all the pre-arrival processing options on both sides of the Canada-U.S. border. PARS, on our side, and PAPS in particular are technology aspects that should be pursued.

We're advising people to consult the CCRA website and indeed other website information that is available to plan the most expedient border crossing, and to take advantage of traffic reports and one thing or another to ensure they can manage that situation.

Thirdly, we're encouraging commercial drivers to have ready photo identification and proof of citizenship. Finally, we are reinforcing the need for documentation to be as complete and accurate as possible so that we can carry out our work expeditiously at the border.

Those slides, I hope, have given some reflection of where we're at and of the sort of thinking that goes behind our administration at the present time.

The Chair: Thank you very much for your excellent presentation. I think it would be a good idea for us now to open the floor for some questions from my colleagues before we call our next witnesses.

We'll start with Mr. Duncan and Ms. Whelan. Then we'll move back and forth.

Mr. John Duncan (Vancouver Island North, Canadian Alliance): Thank you very much, presenters and chair. It's obviously a lot of information to look at all in one go, but it's very informative.

I do have some questions that might not relate directly to the presentation, but they are customs related and border related. One is, do you have any count on how much of the traffic, truck or commercial traffic, that enters north to south is actually only doing that in order to transit the U.S. and re-enter Canada because they're finding their highway system more convenient? Do you have any way of knowing that?

Mr. Brian Brimble: I don't have specific data on that particular aspect of the trade. I would think that in the whole scheme of the trading relationship that sort of trade represents a relatively small portion of our business.

Brian, did you have any further insight on that?

Mr. Brian Jones (Director, Import Process Division, Operational Policy and Coordination Directorate, Canada Customs and Revenue Agency): The estimate I would give you is that in the order of 10% of truck traffic is moving in transit through Canada. That's a somewhat visceral estimate. But certainly the corridors, Buffalo, Windsor, and Sarnia, are obviously convenient transit points for trucks. So perhaps 10% of the total would be moving in transit.

Mr. John Duncan: The reason I ask is that on September 11 I happened to be driving across Canada. It's the fifth time I've done this in the last four years, and I had never seen that amount of truck traffic on the Trans-Canada previously. So I could only conclude that they were trucks that normally would have done what I have done previously by car, which is go to the United States, go across, and go back up, going to British Columbia from here.

If that's true, then there are obviously some ramifications. If we upgrade our infrastructure, not at the border but internally, we can take some pressure off the border points.

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I don't think I need to pursue that any more. It's just of interest. I think it's apparent from your numbers that there's already significantly less south-north waiting times than north-south waiting times, and some of your action plan would do more to actually improve this or make it an even greater differential. The optics to me are, why would we keep doing that? Are we not sending the wrong signal? Are we not going somehow in a direction where our U.S. partners are not going on this? Are they not buying in? If so, why are we so anxious to pursue our current direction?

Mr. Denis Lefebvre: Maybe I can attempt an answer. In our agency it is our credo that our mandate, as we see it, is to ensure that our businesses have the best access they can have to the American market. We strongly believe that if you look at the border, where you have ten million shipments a year, trucks go both ways. If you want trucks that go down to deliver, they have to come back, and normally they're loaded both ways. It's just the nature of it.

So it's not really one-way traffic; it's both ways. We think that to the extent we can keep the border free flowing, keep the border as open as much as we can influence it, at least 50% is done in making that border not be a factor for investments and other things. Of course, it would be nice to shoot for 100%, and we are working very hard with U.S. agencies to accomplish just that through joint programming and other harmonization procedures.

Mr. John Duncan: I have a question here. U.S. Customs is now charging Canadians who are conducting business in the U.S. a $5 user fee per visit, or you can buy a $100 U.S. decal for a full calendar year, and as far as I know Canada does not have a similar fee for Americans doing business in Canada. My question is, why is that fee being charged, and why is it unilateral or one-sided?

Mr. Brian Brimble: In Canada we have no such fees. In the United States we're not informed in terms of the fees they are charging, so I don't have an answer on that. We're of the view that we're providing a service to traders. We want to facilitate trade, and, as Mr. Lefebvre has indicated, we make every effort to ensure that trade flows as freely as possible.

Mr. John Duncan: Are you telling me that if we imposed a fee such as that, we could do it without any complaint under NAFTA or any other mechanism?

Mr. Brian Brimble: I can't respond on that, I'm sorry.

Mr. Denis Lefebvre: The Americans I think at some point in time have used the fees to staff the border or to pay some of the staff who are there, some of the resources. I'm not sure the fee you're talking about applies to Canadians, but maybe it does.

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Mr. John Duncan: The one specific example I'm aware of is in Eastport, Idaho. I don't know how widespread it is, but it's certainly happening there.

Mr. Denis Lefebvre: As a matter of policy, we don't charge for people to cross the border, whether it's commercial or travellers.

The Chair: Ms. Whelan.

Ms. Susan Whelan (Essex, Lib.): Thank you very much, Mr. Chairman. For the record, I want to note that Detroit is not south of Windsor, just for your future presentations.

A headline in the Detroit News on Sunday, October 14, read, “Border: Safety vs. trade”. Mr. Lortie, I believe we need to change this so that it reads, “Security and border trade working together”, and they're not seen as adversaries, as they're being seen today.

I'm wondering who is, if there is someone, responsible for border trade and what I believe is the future of our Canadian economy under this new cabinet committee.

Mr. Marc Lortie: In the aftermath of September 11, security is paramount in the United States, as we can witness every day on the news and in our discussions with American officials, or as you can in your own contact with congressional leaders. Security is a major concern.

I believe we have at this moment achieved, and we are in the process of achieving, greater confidence among the American administrations at every level that we are not only ensuring our border is taking into account security preoccupations but also ensuring that the trade flows like it did before September 11.

In terms of responsibilities, before September 20 the overall responsibility for border management was shared in the United States among the State Department, Customs, the INS, and other agencies. As of now, it looks very much, and I say this with caution, as though Governor Ridge is being tasked with a special mandate. On our side, the overall management is a shared responsibility, but the Department of Foreign Affairs and International Trade, at this moment, is coordinating various actions of the agencies and the department under the chairmanship of Minister Manley, who is soon to have his first working meeting with Governor Ridge.

Ms. Susan Whelan: Could I make a suggestion? I believe we need to also focus on the whole issue of trade, because I have a number of businesses that are calling and writing, and they're explaining and putting all the facts down about who their customers are and where they're located. The fact is that their customers won't come over to Canada right now, which means they're not making future purchases, which means that locally they're going to be out of business. I'm not talking about a week or two, necessarily, but we all know that, for example, in the automotive sector you make long-term decisions.

When the Big Three, or the larger companies, make a long-term decision for 12 months or two years down the road, then all of the auto parts suppliers are also affected by it. We need to take clear control of what's happening and recognize that these decisions are being made for 12 months and two years down the road.

I've received a number of calls and concerns from smaller businesses that are already being told by their businesses in the United States and their customers in the United States, “We're not coming to Canada, and we're not buying anything in the future from you. When our contract runs out, because of the border and the insecurity of the border, and the fact that we don't have faith in how the border's operating, we're not going to be doing business with you.”

What do I say, for example, to the business in my riding that employs 50 people and 98% of his customers are from the United States? He pays corporate taxes of $2 million to the government, and between his employee taxes and corporate taxes it's over $3 million or $4 million. There are 200 of those businesses in my riding, and there are 13,000 automotive suppliers across Canada.

We have to really take charge of this agenda.

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I understand that originally everyone was focused on security. But with all due respect, the United States is recognizing that 25% of their trade comes into Canada, while 85% of our trade goes into the United States, of which 85% is automotive.

These decisions are being made now, so we need to find someone to turn to. When this cabinet committee meets next, maybe you could suggest to them that they identify a point person, or they identify this issue. Again, we need to turn the direction so it's security and border trade working together, not security versus border trade. We have to change those headlines, because the message out there is that the border isn't working, whether it is or it isn't. We need to change those headlines.

I don't know if you have a response to that.

Mr. Marc Lortie: I think on the border, your comments...indeed, that's the way we approach it. Security, trade, and economic consequences are not opposite. We have to work toward them. It is the intention of both sides—I want to reassure you on that. When the President and the Prime Minister discussed it on September 24, that's what the message was to both administrations, that we have to ensure that the functioning of the border does not become an impediment to the economic well-being on both sides of the border. I think it is very important to carry on with that.

Ms. Susan Whelan: I agree wholeheartedly with you, but I want you to understand it is becoming an impediment right now for people doing business.

When I read the article in the Windsor Star today, when I spoke to the president of the Chamber of Commerce, as I did earlier today in Windsor, when I recognize the businesses that I've spoken to, and hear their difficulties and the problems they're incurring...we have to act much more quickly when it comes to what's happening with regard to trade at the border.

I want to move on to the issue of the border and how it's operating. I didn't think the wait times prior to September 11 were acceptable. We all know there was an active lobbying campaign going on for more customs officers and border officials on the American side prior to September 11. That being said, I didn't think the Canadian side was as efficient as it could have been before September 11 either. So I don't think it's acceptable now to say those wait times prior to September 11, which we're still incurring, are acceptable, especially when you look at the decrease in traffic.

As an example, I have statistics from the Ambassador Bridge that show that from September 11 to September 30, 2000, 462,765 cars passed over the bridge. From September 11 to September 30, 2001, there were 245,543, which is actually a total decline of 217,222 cars. So in the 19 days after September 11, there was a 47% decline in vehicle traffic over the Ambassador Bridge. For those same 19 days, there was a total decline of 20%, or 43,977, for trucks. That 20% tells me there's a real issue with regard to what's happening with industry.

My concern is, with all this decline in traffic, why are we experiencing wait times coming into Canada? What are we going to do to ensure these wait times, which I don't think are acceptable now, don't increase as the traffic, hopefully, does increase, because it hasn't gotten back to normal levels? We want to see it return to normal levels. I'm very concerned that we're processing traffic at the same rate we were prior to September 11, and we're—as I just told you—47% down in passenger vehicles and 20% down in trucks. What are we going to do about it?

Mr. Denis Lefebvre: I disagree that the wait times at Windsor, at the Ambassador Bridge, are unacceptable. There have been and will always be exceptions. In our business, you cannot staff up to the level of the worst peak time—that's impossible. But as you've seen from the charts, we have taken extreme effort to ensure the wait times since September 11, except for the first couple of days, were kept to the minimum. We have done that through adding resources where required.

I'm not denying it has helped that the traffic has been lower than what it might otherwise have been, but as for the future, we are confident the traffic will go back up. There are some trends to show that it is slowly going back up. We will in the future, as we have in the past, take the steps to keep the wait times at an acceptable level.

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Ms. Susan Whelan: Mr. Lefebvre, you and I are going to have to disagree on this one. In fact, I disagree on an earlier conversation today when you compared the wait times on the bridge between Hull and Ottawa with the wait times on the Ambassador Bridge. I think Canadians would be appalled to think that we are comparing bridges when we know that one-third of all Canadian trade crosses at the Ambassador Bridge.

That being said, your website is still showing and proclaiming the virtues of CANPASS. I don't disagree that CANPASS was a wonderful program, but I do think we have to try to go back to that goal, which was to separate high-risk and low-risk traffic and commercial passengers and vehicles. If we have to bring in an enhanced security check to get CANPASS back up and running, then that's something we should be doing. If we could get CANPASS back up and running by bringing in an enhanced security check for Canadians who live in Canada for 18 or 16 out of 24 hours and work in the States the other eight hours—they live here, they live among us, they're Canadians; they just happen to cross over the bridge to work and come back. I don't know how they're a security threat to anyone, because they are Canadians, they are landed, and they do have status.

If we could do an enhanced security check, and start doing that right now, and bring that program back up and running, then we could focus our resources on the high-risk travellers, on the people we're not sure about, on the people we talked about under the CUSP agreement—what we needed to do. But as long as you continue to mix the low-risk and the high-risk travellers, you do have unacceptable wait times.

When I get calls to my office that people are waiting an hour and a half to get back into Canada, it's not right. When I get calls that trucks are lined up waiting to get into Canada for an hour and a half...I don't know what it costs you when you're an hour and a half late for work, but I'll tell you, it costs DaimlerChrysler and Ford $1.5 million every time they have to shut down their plants for an hour.

In case we're not aware, Ford Engine, as an example, has a four-hour time slot from the time it's finished building an engine. It has to be on a truck, over the bridge, in another plant, in a truck, and off an assembly line in four hours. So as soon as we have any kind of wait time factor built into that, all of a sudden production is off and our economy suffers. So I don't think any wait times are acceptable.

The Chair: Mr. Lefebvre, a final answer and then we'll move to Mrs. Lalonde.

Mr. Denis Lefebvre: I will just make two points.

First, the fact that there is a delay at a bridge doesn't mean it is necessarily caused by Customs. My example to you with the Ottawa bridge is that any bridge can be a bottleneck when the traffic is high, and the delay can be because there is only one bridge as opposed to two bridges.

There is another point I wanted to make, but....

The Chair: I'm sure we'll have another chance to go over it.

[Translation]

Madam Lalonde.

Ms. Francine Lalonde: I have several questions as well as some remarks. I will try to go quickly because this is an extremely interesting issue. I wish to inform the Chairman that yesterday, at the Foreign Affairs Committee meeting, I emphasized that this study, in my view, should be carried out by the committee, because it does not involve solely commercial dimensions, but also foreign affairs dimensions. Had such been the case, I believe that there would not have been these delays. We will get another chance.

I would like to deal with the objectives outlined in the presentation. I would have liked to have seen the difference between traffic volumes and the time required to cross the border before and after. The statistics we have been given only go back to September 11. What the change been? Susan told us that even before September 11, waiting times were much to long in Windsor, where there is the greatest amount of traffic. I would have liked to have been given information on the wait times at the border since September 11 for both commercial vehicles and passenger vehicles. I would have wanted to know that as well as to discuss the options and measures aimed at reducing as much as possible any further delays.

I do not have the feeling that you have given us those options and I would be interested in seeing them. It seems to me that to get to that stage, we would first have to know what brought about the delays. What were the American customs officers looking for? You said "low risk, high risk". Clearly, the events of September 11 are such that the Americans are checking drivers as well as their loads and, obviously, passengers and people travelling alone. I would like to know, in a few words, what they were looking for.

• 1630

There is also a fact that was brought to our attention. At Lacolle where, according to the statistics, things are supposed to be going smoothly, there were a few days when the line-up of trucks waiting was several kilometres long, and we heard several representations from merchants and various associations of business people.

Finally—and this will be the last question on my the first round—, what is surprising is that the American Customs agents, according to reports, were inspecting not only entry to the United States, but also departure, which says a lot about their level of trust.

I would like to hear a few explanations with regard to these issues and I will come back on the second round, Mr. Chairman.

Mr. Denis Lefebvre: Very quickly and in summary, you will see the wait times once you have seen all of the transparencies. As far as travellers go, overall, there has certainly been a 30% drop since September 11. For trucking, in the first days, there was nothing. But since September 15 or 16 the situation has varied from one port to another. It might reach 90 or 95%, and sometimes it is even up to 100%. On occasion, it is a little lower overall.

The Americans were in a situation of extreme alert. Yes, for a time, they were inspecting both for export and for import, because of the intelligence they were given. They were simply exercising their discretionary authority to ensure security, and we are not going to account for what they did.

Ms. Francine Lalonde: And what is the difference in wait times between before September 11 and after?

Mr. Denis Lefebvre: Obviously, there were major disruptions during the week of September 11. Since that time, there have been other disruptions, I must admit, but overall, the delays are now acceptable throughout the country, except in exceptional cases where there are uncontrollable circumstances at play.

Ms. Francine Lalonde: When we look at all of the tables, we see that, in the end, there are long waiting times. There was a peak right after September 11. That was followed by a drop, probably because the volume was not as great, but when the volume picked up, there were once more long wait times. I have looked at it more than once, and that is the situation.

Mr. Denis Lefebvre: One must make a distinction between wait times when you are moving towards the South and wait times when you are going North.

Ms. Francine Lalonde: I looked at that, but since we are studying the border-crossing issue, we are also interested in what is causing the southward waits. This is why I was saying that if we want to tackle these issues, we must know what reasons lie behind the directives that were given to the American Customs officers. Without that information, we will not be able to resolve anything. I would even go so far as to say that it is urgent that we know what they are capable of doing. I know that the people in the Department have worked on that. This is why I expected to see options and measures that would allow for a maximum decrease in the wait times going both ways.

Mr. Denis Lefebvre: If I may, very quickly, I will also refer to what Ms. Whelan stated earlier. In the medium and short term, we believe that the solution to reduce wait times, to facilitate border-crossing in both directions, would be for both administrations, both countries, to work together to develop joint programs. We already have the NEXUS program for passengers, a pilot project that we developed with the Americans, and we would like to extend it to the entire breadth of the country so that low-risk people might be pre-cleared and cross the border quickly. This would free up the border and give us time to deal with higher risk individuals.

• 1635

We would like to do the same thing for trade. We are doing our utmost, in cooperation with our American colleagues, to jointly move forward with these initiatives so as to improve protection, facilitation and border-crossing.

Ms. Francine Lalonde: You have statistics for travellers, truckers and their loads. Have there been more people than usual turned back from the border? Do you have statistics regarding those who were refused at border-crossings.

Mr. Denis Lefebvre: No, I do not believe that we have statistics on that. There have been more people sent to the Immigration Department, but we have no statistics pertaining to what happens to those people afterwards.

Ms. Francine Lalonde: That could be interesting. I think I have an idea of the answer, but I would like you to tell me what you have observed. Are citizens who were originally immigrants encountering more difficulties than other categories?

Mr. Denis Lefebvre: We carry out our work based upon the information that we give to our customs officials. The purpose of this information is to advise our officials on elements that might indicate that certain individuals present a higher risk than others, and that may change from day to day. That is how it works.

Ms. Francine Lalonde: Are these indicators public knowledge? Could we have them?

Mr. Denis Lefebvre: Absolutely not.

Ms. Francine Lalonde: Absolutely not.

Mr. Denis Lefebvre: Absolutely not. We accept all sources of information that might indicate the existence of a risk. As I was saying, this information comes from all of the agencies charged with enforcing the law, be it in the United States, in other foreign countries or in Canada. One of our main aims is to give front-line Customs officers—who are on duty throughout the country at any hour of the day—the information they need to target those persons who present a higher risk. This obviously also facilitates passage for those people who do not present a high risk.

Ms. Francine Lalonde: When you talk about "strengthening contraband detection technology to identify high-risk people and goods" what are you talking about?

Mr. Denis Lefebvre: As I stated, we have systems that allow for the relaying to a front-line officer of the information he or she needs to carry out his or her risk management work. In the postal and air freight service centres, for example, we require more technology so as to be able to examine as discretely as possible the goods that arrive, in order to ensure that we are not bringing into the country materials that might be dangerous.

Ms. Francine Lalonde: I am reading what you have written here. You talk about "strengthening contraband detection technology to identify high-risk people and goods".

Mr. Denis Lefebvre: Indeed. For example, we are buying more X-ray machines for airports, for baggage inspection. We are buying more X-ray machines for the postal centres in order to be able to examine more packages. We are also buying Ion Scan machines. That is a spectrometer that allows us to detect explosives or drugs. Those are the types of things.

Ms. Francine Lalonde: You also talk about expediting "Advanced Passenger Information/Passenger Name Record technology to provide key information on travellers in advance of arrival". What is that?

Mr. Denis Lefebvre: Under Bill S-23, which we hope will pass soon, we will be requiring from airlines that they send us, as soon as an air plane leaves a country for Canada, the passenger list along with any information that might help us to manage risk, to determine who amongst the passengers may present a higher risk. When the plane lands, the teams in place have already analysed the information and this allows them to concentrate their efforts on those passengers we wish to see, at the same time allowing the other passengers through more easily.

• 1640

Ms. Francine Lalonde: I worked on the Privacy Act. There are indicators and there is all sorts of information circulating about me. You know that mistakes can be made. Two people can have the same name, the same birth date and live in the same town. How would a person go about verifying if his or her right to privacy has been infringed upon?

Mr. Denis Lefebvre: We had several consultations with the Privacy Commissioner when we were drafting this provision. We are working on the regulations. The information we are requesting is information that we are in any event entitled to ask travellers to give when they arrive in our country. However, if we have this information in advance, then we are able to both ensure the safety of the people and facilitate their arrival, because we have already done a lot of analysis.

We will have measures pertaining to the non-retention of this information so as to ensure that we are not unduly infringing upon people's privacy.

Ms. Francine Lalonde: But each and everyone will have a file.

Mr. Denis Lefebvre: This is not necessarily information that we will keep. If there is a plane carrying 300 passengers whose names have been forwarded to us and that we decide, before the plane lands, that there are three passengers we wish to intercept and measures are taken, we will not necessarily keep the information pertaining to the other 297 passengers.

Ms. Francine Lalonde: Will jealous husbands have access to this information?

[English]

The Chair: Mr. Comartin.

I just want to remind colleagues that we still have three more witnesses and we have to close here at 5:30 p.m. The more direct your questions are, the better it is. Unfortunately, in this business, we have to put on a time limit, and I'm sorry I did not put it at the beginning.

Mr. Comartin.

Mr. Joe Comartin (Windsor—St. Clair, NDP): Thank you, Mr. Chair.

Let me start off by reiterating the sensitivity of those of us coming from the southern part of the country. We are in fact south of the United States. Let me suggest that henceforth you change your chart so that it shows Canada-bound or U.S.-bound. We would appreciate that. That kind of error, Mr. Brimble, Mr. Lefebvre.... I look at these charts and they are just dead wrong. You're getting this information from the U.S.

I don't know how the U.S. is drawing on this information, but if this chart were right, what you would see is every single day, at least once a day, these points would go off the chart. There has not been one day after September 11 when the border has been open that we haven't had a three- and four-hour wait at the bridge. There hasn't been one.

So I suggest you go back and look at your figures again and get somebody to do this on the Canadian side. Ms. Whalen knows this. We had days when they were backed up into her riding—

Ms. Susan Whelan: To Belle River.

Mr. Joe Comartin: To Belle River, where I grew up. That's 20 miles, 30 kilometres, from this border point. You don't show that here. That would show up; every single day you would be filling this thing up. This figure is inaccurate.

So I guess what I would say to you, Mr. Lefebvre and Mr. Lortie, is if you're planning based on this information, and you're going to the Americans and saying “You have to clean up your act, you have to start putting people and resources at this border”, and they're looking at these figures, they're going to ignore you. I would if I were on their side. I'd say “That doesn't look too bad. That's okay.” But it's not okay.

The reality is that we have a major economic problem here. When I see this, I say you don't appreciate that we have one, because if you're relying on these statistics, they're wrong.

Let me make one final point on the validity of these. This doesn't show the other point that's been happening, which is that a great deal of the traveller traffic has been rerouted to the tunnel in Windsor. So you would be seeing spikes again. I was in Windsor on Monday and Tuesday of this week. We had two-hour waits for travellers to move across the tunnel. That is because part of the traffic that used to go across the bridge—the traveller traffic in particular, personal vehicles—has been rerouted. They're doing this on their own. The authorities aren't doing it; people are moving over there.

If you are going to do this, get those statistics as well. As recently as Tuesday of this week, before I left the city, from 8 o'clock until 10 o'clock we had two-hour waits at the tunnel and similar waits at the bridge. So this information is just incorrect. If you're doing your planning on this, if you're negotiating with the Americans based on this, you're not going to get any place with them.

• 1645

Having made that statement, my question is, can we get some better information, but can we do this work ourselves on the Canadian side of the border? The information you're getting from the U.S. is simply not accurate.

Mr. Denis Lefebvre: We cross-check our information. U.S. Customs has a website, as does the Ontario government. We cross-check all of those, and we are pretty well all in sync with the information.

Mr. Joe Comartin: I'm not sure I'm going to get much response, but let me suggest to you that you actually have some people stand at the border, because I don't know how else you're going to get this information accurately. If you're getting that information from Ontario as well, I'm telling you, it's wrong.

Let me go to the other point that I want to raise in terms of a question—and that will be all I'll ask at this point, Mr. Chair. That is with regard to the putting forth of resources from the American side.

In the figures I have right now—and I agree with Ms. Whelan that we aren't doing well enough, but at least we are doing a lot better than the Americans—we have something like 225 to 240 employees on the Canadian side to let traffic move through, inspect it, and all the rest, and the Americans have somewhere around a third of that, somewhere in the range of 60 to 70 employees. Is that figure accurate? If it is, or if it's even close, is there any indication that the Americans are going to increase, as they did for the first few days after September 11, the number of employees they have there to get the traffic moving from Canada into the U.S.?

Mr. Denis Lefebvre: From the discussions we had with our colleagues, they are hopeful that the bills that are now before Congress will yield some more resources that will enable them to process traffic faster.

Mr. Joe Comartin: As a quick follow-up on that, do we have any sense of how long it will take them to get their people trained and on the border if that money goes through?

Mr. Denis Lefebvre: No.

The Chair: Mr. McNally.

Mr. Grant McNally (Dewdney—Alouette, PC/DR): Thanks, Mr. Chair.

I have been less than consoled by the answers we've received today, and I share in many of the concerns that Ms. Whelan and Mr. Comartin have mentioned.

We need to get a handle on this very quickly, because it is having a huge impact on the economy of our country and of our communities. My riding is 20 kilometres from the border, and we've felt the impact too, and in the lower mainland close to Vancouver. We have to go for a balance between security and trade, as Ms. Whelan mentioned. As was announced by the INS commissioner yesterday, within four years they're going to an entry-exit plan that they want integrated for everybody who comes in and goes out. They're going to move forward with that, and we had better be getting that figured out today, because it's going to have a huge impact on every one of our ridings and our economy.

I'm concerned that there has not been a coordinated plan right off the bat here to accommodate that, both the infrastructure for roadways and facilities into the United States.

Please assure me that there's some kind of complete, integrated system coming by which information is going to be able to be shared between the United States and Canada when they're requiring this of us. They want a control of who is coming in and who is going out. Are we looking at that? Are we going to put those dollars into that, to have that system integrated? If we don't, I think Ms. Whelan is right, there's going to be a lot of companies that just say, see you later; we're going across the border and we're not coming back. If we don't address that quickly, we're in trouble.

Please assure me that rather than just some generalities, we're working on cooperative programs; there's going to be some kind of comprehensive announcement very soon about how this is going to be happening, with some very tight, quick timelines.

• 1650

Mr. Marc Lortie: I can assure you that the government shares your concern, and that's the spirit with which we are working at this very moment with the U.S. authorities. I refer to the forthcoming meeting of Minister Manley with Governor Ridge, and it is indeed intended that the management of the border issues will be raised, since on his side he has the overall responsibility, at least a coordination responsibility.

On our side, on immigration, on customs, on intelligence, it is the spirit with which we are working with the Americans at this moment, sharing information on both sides to ensure that the security of Canadians and Americans is enhanced and well protected, and at the same time ensure that it does not become an impediment to the free flow of goods and to prosperity on both sides of the border.

One thing I would like to say, and not very lightly, is that it's true that your communities, first and foremost, are on the forefront of the economic consequences, but the economic consequences of September 11 are not only at the borders; they are all across Canada, north or south, and also all across the world.

We have a responsibility at this moment to deal with the Caribbean islands. With the Caribbean islands, you may have friends in that region whose revenue mostly comes from tourism. Sixty-five percent of the tourist industry of the islands has collapsed. What will the consequences be for us in our relationship with the Caribbean?

The same thing could be said about South America or western Europe. The consequences of September 11, the impacts, are very serious, not only in the border communities, but all over. The impact is very severe. Therefore, we are working at this moment, I have to say, non-stop, with all the agencies in the department to ensure that border management does not add to the difficult circumstances of today. That's the spirit, and I believe we're going to achieve it.

In my presentation, I forgot two things. We have developed with the Canadian private sector—and I believe you will have witnesses from that sector—through a series of meetings with them, a strategy to engage the American side, to prevent section 110, and to rebuild that coalition with the private sector.

We need to do the same thing with the provinces. We have launched that process with the provinces, and we're going to carry on.

Premier Campbell was in town 48 hours ago. He met with the Prime Minister and Minister Manley and offered the full cooperation of the provinces. Indeed, the cooperation of the provinces is very key with border states, with governors, with state legislators, to engage a broad coalition on the U.S. side to ensure a proper, efficient management of the border and to give both sides a secure environment in which to move forward.

The Chair: Thank you very much. That's all the time we have. We have to move to our next witnesses.

On behalf of the committee, I want to thank you very much. As you have probably heard and seen, there's a lot of anxiety and concern about the well-being of our communities, both in the business sense as well as the security sense. We want to have a balance. What you have told us today is very assuring, and it is our hope that, if and when needed, you will come back in order to give us an update in terms of how far we have gone.

We are going to suspend for one minute and then hear our next witnesses. Thank you once again on behalf of everyone.

• 1654

• 1656

The Chair: We are ready to start. Thank you very much.

I will ask my colleagues to please take their seats. Our next witnesses are from the Canadian Manufacturers and Exporters, Mr. Perrin Beatty; the Canadian Vehicle Manufacturers' Association, Mr. David Adams; and the Canadian Trucking Alliance, Mr. David Bradley and Mr. Massimo Bergamini.

Mr. Perrin Beatty is no stranger to this House. We want to welcome you. We appreciate your response to our call to you. It was very short notice, but we appreciate the fact that, because of the urgency of the situation, you have agreed to come and give us a briefing.

We will have the same setting as we had before. We'll have presentations from the different witnesses; then we will open it up for questions and answers. Hopefully we'll be done before 5:30 p.m.

Mr. Beatty, the floor is yours.

Mr. Perrin Beatty (President and Chief Executive Officer, Canadian Manufacturers and Exporters): Mr. Chairman, just in terms of time management here, I don't know how you would best like us to proceed. I certainly do have a statement. If it would be easier for you to have me submit the statement, have it appended, and be more informal, I'd be pleased to do that, because I'm worried about whether all of my colleagues would have a chance to....

The Chair: That's a good point. Do we have agreement to consider the statement as part of the minutes?

Some hon. members: Agreed.

The Chair: Great. That would be excellent, Mr. Beatty.

Mr. Perrin Beatty: I could make my statement much shorter that way.

The Chair: That would be excellent.

Thank you.

Statement by The Hon. Perrin Beatty (President and CEO, Canadian Manufacturers and Exporters (CME)):

Thank you, Mr. Chairman.

I am Perrin Beatty, president and CEO of the Canadian Manufacturers and Exporters. I am pleased to outline the concerns of our members as they relate to delays at the Canada-U.S. border. CME members produce 75% of Canada's industrial output and account for 90% of its exports, so their concerns are national economic concerns.

[Translation]

Exports accounted for nearly half of Canada's gross domestic product last year. Eighty-six percent of Canadian exports went to the United States, our largest market. We sell more of our manufactured goods to the United States than we consume here—65% of Canada's manufactured products are sold to the United States.

[English]

International trade is the lifeblood of the Canadian economy. The main arteries through which it flows are the bridges, highways, and railroad tracks that span our southern border.

Canadian prosperity depends on our trading relationship with the United States. In turn, that relationship depends on the efficient flow of goods and people across the Canada-U.S. border.

The border is more than just a line on a map. It is the point where the sovereign and economic interests of two leading, outward-looking economies meet and intersect. We must make sure it does not become instead an axis of collision.

In the world of just-in-time production, Canadian companies rely on the problem-free movement of planes, trains, and trucks, as well as the mobility of people to service the goods sold on both sides of the border. A million dollars of trade takes place between our two countries every minute, and 200 million people cross our common border every year. In fact, the U.S. does more two-way trade across the Ambassador Bridge between Windsor and Detroit than it does with any other country.

Border delays hurt productivity and increase the cost of doing business in Canada. They undermine our exports and could place thousands of Canadian jobs in jeopardy. If the border becomes a barrier to the movement of goods and people, it will not only choke off our exports but also stem the flow of foreign direct investment into Canada. Without easy access to the U.S. market, companies will be reluctant to establish operations here.

Problems at the Canada-U.S. border existed prior to September 11, with commercial shipments and business travellers routinely encountering lengthy and unnecessary delays. At one border crossing alone, in Fort Erie, Ontario, it was estimated that transportation delays were costing shippers $2.5 million a day.

Through our standing committee on customs and market access, CME led the development of the customs self-assessment program, CSA, and CANPASS. Our members also identified a number of strategic areas for improvement. These include:

- immediate implementation of CSA, NEXUS, CANPASS, and other pre-clearance programs to take as much processing as possible away from the border;

- the provision of dedicated lanes for shippers whose paperwork is in order or who have been pre-approved for customs clearance;

- increased integration of customs inspections and facilities between Canada and the U.S.;

- greater investments in resources and infrastructure at the border, including staffing and training;

- closer cooperation between customs agencies and exporters, importers, brokers, and shippers to simplify and clarify rules and information requirements; and

- a strengthened Canadian and American commitment to a shared border agreement.

Since September 11, the need to resolve problems at the Canada-U.S. border has become urgent. Heightened American security slowed border traffic to a crawl in the days following the terrorist attacks against the United States. Those delays were costly and forced some Canadian plants to temporarily reduce or halt production. More important, they gave us a glimpse of what we can expect in the future if we don't move effectively and in concert with our American neighbours to ensure that our countries are protected from terrorism.

I have heard it said recently that these terrorist attacks mean just-in-time delivery is a thing of the past. Nothing could be further from the truth. Our American customers will continue to expect just-in-time delivery, and they will choose suppliers who can provide it. Whether those suppliers will be Canadian or not will depend on whether we can resolve the issues surrounding the border. Tens of thousands of jobs hang in the balance.

In the wake of September 11, Canadian Manufacturers and Exporters has taken a three-pronged approach to address border issues and ensure the federal government understands the concerns of Canada's manufacturing community and the business community in general. We have formed a task force of CME members to guide our policy and strategy on border issues; established a joint working group on key border issues with our U.S. counterparts, the National Association of Manufacturers; and brought together senior representatives of business associations and businesses to form a broad coalition to address these issues.

I would like to devote the last few minutes of my presentation to the activities of the Coalition for Secure and Trade-Efficient Borders. Over 40 associations and key businesses participated in its organizational meeting on October 3. We believe increased security will lead to better trade facilitation if there is confidence and trust in the measures taken on both sides of the border. The goal should be to ease the movement of legitimate goods and travellers while focusing resources on illegal activity.

To achieve this goal, the coalition is exploring a perimeter approach to security issues that would remove the pressure currently on the 49th parallel. Its purpose is threefold: to recommend ways to strengthen Canadian security and intelligence, immigration and refugee determination. to promote Canadian cooperation with the U.S. and other allies to prevent the entry of terrorists, illegal immigrants, contraband, and illegal goods in our countries; and to recommend immediate measures to facilitate the passage of low-risk goods and people across Canada's borders.

We believe industry must provide leadership. The goal is not to return to border conditions as they were at 8:30 a.m. on September 11, but to resolve issues that were already threatening our trade then and have become urgent now.

The most important border points were choking on the volumes before September 11, and it would be foolish to return to a system that was already badly broken. Now is the time to fix it.

[Translation]

The coalition and the Canadian Manufacturers and Exporters will work jointly with the various governments to develop solutions recognizing that Canadian security and the efficiency of our border are linked together.

[English]

The coalition members feel strongly that, as a sovereign nation, Canada must take the initiative in resolving the border issue, instead of simply reacting to external developments. By acting boldly and with determination, Canada can demonstrate that we are part of the solution, and not part of the problem, in making our citizens both safer and more successful. I look forward to presenting the coalition's recommendations to the government in the near future.

With Canada-U.S. trade contributing more each year to the prosperity of our citizens, the need for simpler, faster, seamless, more sensible, and less costly customs procedures can only become more urgent. This was evident prior to September 11 and is even more so today.

The Chair: Please continue, Mr. Beatty.

Mr. Perrin Beatty: Mr. Chairman, let me first of all thank you very much for the invitation to be here. I'm delighted to have the opportunity on behalf of our members.

I listened with a great deal of interest to the testimony earlier this afternoon and to the questions that came from you and your colleagues. I guess if I had one message for you, for this committee and your deliberations, it would be this: that our goal shouldn't be to return things to where they were at 8:30 in the morning on September 11. The border wasn't working well then; it was broken. It was getting consistently worse as we were going on, seeing trade between Canada and the U.S. increasing at the rate of about 10% per annum. Literally, at a number of key points that members have mentioned in the course of the afternoon, we were choking on the volumes of trade that were developing.

Our goal should be to fix some of the problems of long standing that existed prior to September 11, not to go back to where we were before. We can do it, but to achieve it will require imagination and boldness on our part as a country. It will require collaboration between the private sector and the public sector, and it will require that we work very closely with our American colleagues in both the public and the private sectors.

I'm convinced we can achieve that. We heard some discussion this afternoon about the tradeoffs between security and freedom of movement. I don't think it's an either/or proposition. We will either satisfy ourselves and our American colleagues that the issue of security is well dealt with or we will not have the freedom of movement that is critical for us to protect jobs in this country.

When you consider the importance to our economy of being able to ensure that we're able to get our goods to market, it is absolutely critical that we act, and act with a sense of urgency and boldness, to make changes.

• 1700

That requires, Mr. Chairman, that you as members of Parliament and all of us be prepared to go back and take a fresh look at what the border means in the 21st century; how best we can ensure that we get the maximum benefits from our trading relationship, which has been so critical to jobs in Canada and to prosperity these last several years; and how we can take advantage of the relationship we've built with the United States. As Ms. Whelan was indicating earlier, some 87%, I think it was, of our exports last year went to the United States. That's simply a base on which to build.

There's tremendous potential for us to do much better than that if we have the imagination and the vision to move it ahead. We can't do it through incrementalism. I don't think you can tweak the border. I think what is required is to be much more imaginative in terms of how we address the whole issue of the movement of people and goods across the Canada-U.S. border. It requires that we take a fresh look to how we ensure the security of North America and of our citizens.

I want to address this question just very briefly, if I may, because I guess the fundamental issue for us as Canadians is whether we live in a fireproof house. If we have reason to believe that Canada will be neither a staging ground for terrorist acts nor the target of terrorist acts, perhaps we have nothing to worry about. If the attacks that took place in Washington and New York on September 11 had been targeted against Ottawa and Toronto and we're confident we would have done much better than the Americans did, then we have nothing to worry about.

But if we believe that by its very nature international terrorism threatens our citizens as well and that it requires that we take action to ensure our citizens are properly protected, then it's important for us as a sovereign nation to look at ways in which we can provide for the security of all of our citizens much more effectively in the future than we have in the past. So on the security front, it's critical that we move ahead.

On the trade front, in terms of maintaining an open border between Canada and the United States, it's critical that we move ahead. For this country, which is more dependent on international trade than any other country in the G-7 and is one in which 87% of our trade goes to the United States, it is critical that we look for ways to make improvements.

We can do that. We can do it by having far more effective screening before people arrive in North America in the first place. When we're dealing with international terrorism, to the extent we can, dealing with it offshore from Canada is infinitely more effective than trying to deal with people once they're here. It makes sense when we're dealing with international terrorism.

The issue of sovereignty gets raised from time to time. It is an act of sovereignty, Mr. Chairman, on behalf of our citizens, for our government to act to protect their security. That's the first responsibility a sovereign country has. By definition—and I say this to you as a former Solicitor General, a former Minister of National Revenue, and a former Minister of National Defence and Foreign Minister—we will never have the resources in Canada such that we can act alone to ensure the security of Canadians. We'll never have the resources that will enable us to infiltrate terrorist cells in another part of the world to ensure that someone isn't plotting against Canadian interests.

The only way in which any country, even a country with the resources of the United States, can effectively deal with the threat of international terrorism, is to act in concert with like-minded countries. That's what we need to do as we look at how to improve the security of North America. We cannot depend on a screen being put up along a several-thousand-kilometre border between Canada and the United States, which you can cross on foot, by aircraft, by boat, by truck, by bus, by snowmobile, or dog sled, or by swimming across. It will never work that way. Far more effective for us is to look at ways, first of all, of reducing the size of the haystack in which we're looking for the particular needle of the terrorist threatening the security of our citizens. But secondly, by working in concert with others we can be much more effective in identifying what the potential threats are.

The other issue is obviously the issue of the border itself. I was very impressed with a number of the comments made by your colleagues about concerns they have and ways in which improvements could be made. Now I want to preface my remarks by saying I think the Canada Customs and Revenue Agency is a very progressive agency. It is light years ahead of where it was when I was running it. They certainly have in many ways moved well ahead of their counterpart in the United States in terms of the methodologies they've brought in for processing people and goods moving between Canada and the United States. But it's important for us to take a fresh look at how to deal with this issue.

• 1705

We have to move back from the border to do much of the processing, so that we don't have these giant funnels going to the Ambassador Bridge and simply choking on the traffic going through there, as happens at a number of other border points as well.

We need to look for ways of ensuring that when we're targeting our resources to deal with security threats, we don't waste those resources by going after people who are absolutely legitimate, who are travelling on business two or three times a week across the border and pose no threat to anyone. If we can focus our resources on the areas of highest risk, we'll both provide for more security and speed up legitimate travellers and goods going across the border.

In my notes—which I'll leave with you, Mr. Chairman—I have a number of suggestions for ways in which we can do that. But I would make this plea very simply. My reading of the mood in Washington today is that, not surprisingly, there's enormous pressure on American politicians to be seen to act. Often in political life the political rewards are greater to be seen to act than to take the time to do things right.

It is far easier for us to assist the Americans in providing for their security by getting the system right in the first place than it is to try to undo a bad decision. If we find that they focus on the border with Canada as the means of reducing threats to the United States, the effect on business in Canada and on the mobility of people will be very damaging.

It's important for us to get in front of it, to make bold proposals to the United States for ways in which we can work together to make the border function much more effectively.

One final comment—because I don't want to take my colleagues' time—is that I was in a debate on CBC last week in which one of the people who disagreed with me said just-in-time delivery was dead after September 11. Nothing could be further from the truth. What we're seeing as the economy slows down is that businesses are looking for ways to reduce costs, and just-in-time represents an important way of doing that.

Our American customers will insist upon just-in-time delivery, but they will go to suppliers who can supply it. Those suppliers will either be in Canada or in the United States. It's in our hands to determine whether or not Canadian businesses will be able to continue to supply on that basis. To do it we are going to have to be bold and imaginative in moving ahead.

I close where I began. The goal is not to go back to September 11 at 8:30 in the morning. The goal is to fix many of the problems that were longstanding and serious and that need desperately to be fixed if we're to get the level of prosperity and opportunity for our citizens that we want to have.

The Chair: Thank you very much, Mr. Beatty, for your words of wisdom.

We will move to Mr. Adams. We will hear from all the witnesses. This way we will have a chance to go back and ask questions.

Mr. Adams, the floor is yours.

Statement by Mr. David C. Adams (Vice-President of Policy, Canadian Vehicle Manufacturers' Association (CVMA)): Thank you, Mr. Chairman, and thank you for the opportunity to appear here today.

Good afternoon, members of the committee. My name is David Adams. I am the vice-president of policy for the Canadian Vehicle Manufacturers' Association. The CVMA is the national industry association of Canada's largest automakers. Our membership includes DaimlerChrysler Canada, Ford of Canada, General Motors of Canada, International Truck and Engine Corp, and Volvo Cars of Canada.

CVMA member companies represent a significant amount of economic activity for Canada. The Big Three auto manufacturers have invested more than $22 billion into the Canadian economy over the past decade. Canada produces 3 million finished vehicles each year, accounting for nearly 20% of total NAFTA production. The vehicle assembly activities of CVMA members account for more than 43,000 jobs in Canada.

Our industry has been rationalized across North America under the Auto Pact since 1965 and today depends on fully integrated trade. In 1999, automotive products accounted for more than $150 billion in trade with the United States. This includes both automotive parts and finished vehicles.

The manufacturing processes of our members rely on just-in-time deliveries to bring parts to our manufacturing plants in Canada. Just-in-time deliveries allow the companies to maintain a reduced inventory, which ultimately reduces the cost of the finished product, saving money for the consumer. Our members import the vast majority of all parts and components that are assembled into finished vehicles. Two-way automotive trade between Canada and the U.S. represents $300 million, or 25% of the $1.2 billion daily trade between our two countries. Of the vehicles produced at Canadian plants, almost 90% are then exported to the United States to be sold to consumers in that market.

This integration means that our industry is directly impacted by the events of September 11. In the days following those sad events, production at automotive plants was disrupted as parts shipments were delayed at the Canada—U.S. border. This disruption was felt on both sides of the border—parts manufactured in Canada were unable to reach the U.S. and parts manufactured in the U.S. were unable to reach plants in Canada. These delays also impacted the delivery of finished vehicles to the American dealer network.

We believe it is in the national security interest of both Canada and the U.S. to maintain a strong economy, including facilitating cross-border commerce. While things have largely stabilized at the border, the experiences immediately following the tragedies on Sept. 11 have highlighted the need to develop a coordinated strategic approach to border management.

At the Canada—U.S. border, particularly for surface crossings, we need to take several important steps that will facilitate the flow of high-economic-impact, low-risk goods, and allow resources to be focused on higher-risk activities. More specifically, we believe the following steps should be taken.

Shortly after the September 11 tragedies, additional resources were allocated to the busiest surface crossings to ensure that the existing customs infrastructure was maximized. We support the U.S. allocating additional resources in the appropriations process to ensure that these border points continue to operate at full capacity.

Congestion at the border has long been a problem. We need to explore off-border inspection so that we move the congestion away from the border choke points. This is critical to the smooth flow of legitimate commerce and will also assist with border security.

We should explore how transponder technology can further facilitate the smooth flow of high-value-added, low-risk commercial traffic.

Initiatives such as the customs self-assessment program, which is designed to facilitate the flow of goods for those companies with significant cross-border traffic, make sense for both sides of the border. The CSA provides the opportunity to obtain pre-arrival clearance privileges and self-assess customs duties payable under specific conditions. Unfortunately, the CSA has been delayed in its implementation and a number of alterations have been made that make it an unnecessarily complex and potentially costly process. We are continuing to work with the CCRA to address these deficiencies, thereby ensuring the implementation of an effective process.

We appreciate the ongoing efforts of the federal government to assist with these border issues in support of both our national economy and security interests.

In closing, Mr. Chairman, I would like to reiterate what I have mentioned here today. We believe that now, more than ever, the federal government needs to facilitate an environment for economic growth. This requires a Canada-U.S. border policy that allows Canada to maintain its place in an integrated North American economy, and a trade policy framework that will keep our industry moving. We like to say “what Canada drives, drives Canada”, and we hope the Government of Canada shares our commitment to keeping the automotive industry strong.

Thank you again for the opportunity to appear before this committee today. I would be pleased to respond to any questions the committee may have.

Thank you.

The Chair: Thank you.

Mr. David Adams: I'd like to add a few comments. I penned a lot of this on the way up on the plane. It actually echoes much of what Perrin has already said.

I think from the perspective of the auto industry—and our association represents the Big Three automakers primarily—what the committee has to appreciate is that they've been operating in a free trade environment since 1965, under the Auto Pact, as if the border was not there. The entire industry was integrated and rationalized on a North American basis. What September 11 did was bring into focus that there is a border there. It caused substantial problems for all of our members as far as production and losses on both sides of the border or as far as parts being delivered both to Canada and to the United States are concerned.

The issue Ms. Whelan raised earlier on is the important issue of security versus trade facilitation. I don't think it's an either/or proposition, as you had indicated. I think we will have trade facilitated if there is confidence in security at the border. I think that's clearly where the Americans are focused at the moment.

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How do you get confidence instilled at the border? I think one of the ways this is currently being addressed is by 100% inspection at the border.

Is that type of inspection sustainable? Clearly, I don't think it is sustainable for any length of time. What do you do to address that situation? I think you need to look at the whole issue of risk assessment.

As Mr. Beatty alluded to in his comments, what are the high-risk individuals, the high-risk trucks, planes, whatever, that are coming across the border? What are the low-risk propositions? I think one of the things that a low-risk environment encompasses is we know who the people are. That's the basis on which NEXUS has developed the traveller system. We know clearly who those individuals are who are going back and forth across the border—both Canada and the U.S. know who they are. It's the same type of system that's contemplated under the customs self-assessment system that's going to be put into place. It has caused us a few problems getting there, but through it we know who the carrier is, we know who the importer is, we know who the driver is. That's a low-risk environment. And I think those are the things we can do; those are the automated mechanisms we can put in place to facilitate cross-border trade.

A less interventionist approach to cross-border trade, regardless of whatever automated systems we have in place, is not going to do us a lot of good, however, if can't get actual trucks to the border crossing. As Mr. Beatty noted earlier, the bottlenecks at the border didn't start at September 11; they were there well beforehand. If nothing else, September 11 has served to focus as a magnifying glass on the problems that have been longstanding. And I'm sure David will speak to those problems at the border, as far as truck crossings are concerned.

How do we deal with the congestion at the border, then? What we need to do is look at, as Perrin talked about earlier, moving a lot of that activity away from the border as much as we possibly can. If there's information needed, intensive processing that needs to be done, if there are truckers who don't have the paperwork completed, maybe there's a way of moving as much as possible away from the borders as we can to ensure that what's at the border is actually being cleared across the border. I think it also leads you into a longer-term discussion of whether we have the appropriate infrastructure in place. Do we have not only the human resources available at the border to be able to clear traffic across the border, but do we have the physical infrastructure, do we have enough bridges and whatnot, to accommodate the traffic?

I think both the human resources and the actual physical infrastructure are longer-term issues that need to be looked at, because simply even if we do get the new customs inspectors or whatnot, there is the whole issue of training. How long does it take to train a customs inspector before they're actually there to do the job? So I see those as somewhat medium to longer-term issues.

But I think clearly if we've had about a 160% increase in trade from 1989 to 1999, and we have annual trade projected to increase at 10% a year annually going forward, this problem is not going to be solved easily, and it does require the creative thinking that Mr. Beatty spoke to earlier on.

I know there are a number of prototypes, pilot projects, that are being investigated by the Canada Customs and Revenue Agency. Many of those have merit, and I think we need to look at those and see whether or not there is the capability to apply those on a broader scale across the country. Above and beyond that, as I think was referred to in comments made around the table today, there is a crying need for a coordinated, integrated, cooperative approach to solving these problems.

It's not going to be the private sector specifically, nor is it going to be the public sector. I think it needs to be some sort of system whereby both private and public sector can work together to solve these problems. I think we need to be very careful, but we do need to be engaged and actively looking at these issues, because if we aren't actively looking at these issues, as Canadians, then they may well be decided for us without our involvement, and I don't think that's a road we want to walk down.

I think I'll stop my comments there and turn it over to David.

The Chair: Thank you, Mr. Adams.

Mr. Bradley.

Mr. David Bradley (Chief Executive Officer, Canadian Trucking Alliance): Thank you very much. I will still try to find something useful to say after those two excellent presentations.

• 1715

I would agree that the only things that have changed post-September 11 are that the stakes are now much higher, the urgency is greater, and the necessity for a strong bilateral Canada-U.S. approach to the border is now more essential than it has ever been. I take very little comfort in this fact, and certainly see no silver lining in the events of September 11, but people now are at least aware and seized with the fact that we have a border and that a third of our gross domestic product crosses that border. A truck crosses the Canada-U.S. border once every two and a half seconds. That's expected to double. We will want it to double to maintain our standard of living and our economic prosperity in the years to come, and so we really have a job to do.

One of the approaches I want to spend a little bit of time with, which doesn't seem to have received a whole lot of discussion, is this issue of a perimeter strategy. It's been dismaying to us that in recent weeks we've heard people in government describe that strategy as at times simplistic and as a prescription for a Washington rewrite of our laws. We find that to be entirely untoward and inappropriate. We also find it ironic given that one of the first persons, if not the first person, in North America of any stature to propose that approach was Raymond Chrétien when he was the ambassador to the United States. He was probably the most tireless and biggest fighter we had on issues like section 110 of the illegal immigration act.

It seems that for whatever reason, because we continue to get wrapped up in discussions not only of economic efficiency and of security but also of sovereignty, it would seem this idea has been thrown into the political dustbin at the present time. What do we do? Quite frankly, as truckers and as the people who are caught there in the day-long border tie-ups, we think you're absolutely right, the time to clear the border is very much different from the time spent sitting in marshalling yards and other places 20 miles away from the border. We need now to get beyond the semantics and come up with something that works, and the only thing that's going to work, again, has to be a bilateral approach.

I was struck by some of the points made in the previous discussion with some of the officials. I agree with Perrin's point that Canada Customs, in terms of embracing automation, in terms of looking at ways to facilitate and automate the flow of low-risk people and goods across the border, has been light years ahead of the U.S. Customs Service. But it still seems to me that we're working in a vacuum here. We're going to continue to make it easier for U.S. imports to get into Canada, we hope, which is good because our trucks do need balance, but, again, so much of our economy is dependent upon the export side. Where are the discussions at the highest levels of the administration in Congress that we need to have underway?

I heard Mr. Lortie's comments and I've been involved in some of these meetings he's attended, and quite frankly I don't see the plan and I don't see the coordination at this point in time. Maybe it's just me, but I think we need to see some urgent action.

Yesterday's commencements and announcements by the commissioner of the INS are telling. My read of what was reported today in the Globe and Mail—and I think you made this comment, Ms. Whalen—is that we're looking at over the next two to four years a return to section 110. It was perhaps one of the biggest diplomatic struggles that this country has ever been engaged in, and within a year of our reaching some sort of an agreement on it, we're right back into it. So I think we have to address those things vociferously.

Here are some action that we would recommend be undertaken. First, we think we need to create the position of a minister responsible for security and efficiency. Responsibility at the border right now rests with about four or five different agencies, and try as they might and talk as they might about coordination, quite frankly, I think the approach is still too diffuse for the circumstances we face. We need someone to be in charge, to bring about that sort of interdepartmental, intergovernmental, trans-jurisdictional approach to these issues, someone who can be the lightening rod in terms of dealing not only with our constituents in Canada but with the administration in the U.S. Congress.

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We need to develop jointly with the U.S. authorities a detailed border crisis management plan. The crisis has not passed. Every day the FBI is coming out with new announcements of what might happen. The border is still on high alert, but are we any better prepared than we were on September 10 if something should happen again?

We still do not have a crisis management plan in terms of marshalling the trucks, setting priorities for certain types of traffic, having the inland border clearance that we would need, those kinds of things. They don't exist, or if they do, they haven't been discussed with us yet, and given that we're the vessel for 70% of Canada's trade with the United States, I would think that would be something that should happen. So we need a crisis management plan for now and going forward into the future.

We need to seek an unambiguous undertaking from the United States to commence the bilateral discussions I've talked about. It's true, and I've heard it said, that we still don't really know what the Americans want, that they haven't said as yet. That's true, and I'm sure their attentions have been focused elsewhere. We need to get them to the table; we need to have that kind of unambiguous undertaking so that we can see each other face to face at a high enough level to move on with some of these actions.

As part of that, part of creating that momentum that we feel is needed, we would also urge the Prime Minister to establish a Team Canada trade mission to Washington post-haste and that we focus our attention on Congress. I believe, and I've been told, that our government has a good relationship with the administration. I'm sure that's true, but I think the pressure, as much as from the administration, is going to come from Congress, and I'm very concerned that unless we start to deal with these issues, not only will customs irritants and discrepancies become a problem, but so will they in immigration and in terms of transportation—transportation safety and things like that. We've seen indications of that in the last couple of weeks with discussions about the licensing of hazardous materials, drivers, and the like.

I would close with that. These are certainly the most vital issues confronting our economy at the present time. I agree with the comment that just-in-time is not dead. Just-in-time is what brought about the recovery after 1980. It still serves the manufacturing sector well. It has taken on a new form in the retail sector. They call it “quick response”. There's also now not just time-sensitive or just-in-time service, but time-definite service. Those things are not going to go away.

Whether Canada is going to be able to continue to be one of the spokes in that hub of the continental logistics system will be dependent upon the border being efficient and free and open to low-risk people and goods.

Thank you very much.

The Chair: Thank you.

We have exactly five minutes. I'm going to split it to one minute each, with specific questions. Skip the preambles.

Mr. Duncan.

Mr. John Duncan: You know I'm brief at all times.

I think what you've had to say is very consistent with what others have said in this arena. It's consistent with what Paul Tellier said recently, very much so. I think the Canadian public is already there; they're ahead of the government in many ways.

The government has been sending out mixed messages on perimeter security, which is putting us behind the curve. You talked about getting in front of the issue. I think we're behind. We need to get in front of the issues and then we can get the U.S. Congress on side. It's the only way we'll get them on side. So I appreciate everything you've had to say, because you're on the right track. That's how we're going to benefit the North American economy, because both countries need the trade.

I don't have a question. That's just a comment.

The Chair: Great.

Ms. Whelan, you have one minute.

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Ms. Susan Whelan: I just want to say I don't think the government is that far off. We should get away from this word “perimeter” because it means so many different things to so many people. If we're talking about enhanced security at our entry points into Canada and separating low- and high-risk travel, then I think the federal government is on that track, from my conversations and from the meetings we've had with both the Canada-U.S. group that I'm a part of and Foreign Affairs.

If we can focus on the entry points into Canada, how to enhance our security there, and how to separate low-risk and high-risk travellers, we'll end up with that seamless border we want between Canada and the United States. We'll end up with that coordinated focus between Canada and the United States on those high-risk travellers.

I really don't think we're that far apart, Mr. Bradley, but there's a lot of work that needs to be done to get to the point where we achieve that. I agree with all the comments earlier about how we don't want to go back to 8:30 a.m. September 11. We actually want to go back to an improved state.

Section 110 in the United States was something I worked very hard not to have implemented, and I don't want to see that implemented. The government and the business sector have to try to come together, as was stated earlier, to figure this out.

I look forward to reading your suggestions, Mr. Beatty and Mr. Adams, and to reading everyone's presentation. I think there are solutions to be found, and I believe the government recognizes that, but if we want to get into this word exchange, we can't focus on that. We really have to focus on what we mean.

That word means different things to so many people. I've had several conversations with five businesses in my riding, and it means something different to each of them. What it means to me is enhanced security at our entry points into Canada—the major airports, the major seaports, and the border points—and separating low- and high-risk travellers. That is the goal, and that will achieve it.

Maybe you could just respond to that.

Mr. David Bradley: We agree, absolutely. That's why I say enough with the semantics. In fact, if you look at the Canada Customs plan, it is indeed focused on our external borders as well. So I agree with you there.

[Translation]

The Chair: Madam Lalonde.

Ms. Francine Lalonde: There are measures to be taken quite rapidly, measures that have already been outlined with regard to exports, but there obviously must be negotiations with the Americans so that things become more fluid. But I believe that the measures relating to the perimeter, to immigration... As an MP, I can tell you that in my riding I receive a lot of calls about various problems. There are people who are in the United States and who cannot get into Canada. These people are in the United States. They have a 60-day visa for the United States but they are not allowed into Canada. That is half of the problems we have.

This whole thing is not a one-way street. I think we should take the time to establish that each country could keep its immigration policies, but what we need is an exchange of information and perhaps the harmonization of certain measures.

We say that there must be trust and security. Freedom must it too be preserved. We could have jobs and money, but lose the country we enjoy living in.

[English]

The Chair: Thank you, Madam Lalonde.

Monsieur Comartin.

Mr. Joe Comartin: Thank you, Mr. Chair.

Let me thank you for coming, on behalf of all of us. I think you made a lot of good points, which I have to say I've heard before. I have to say to Mr. Bradley that I was one of those people, and I continue to be one, who is very concerned about some versions of a North American perimeter. I was very concerned, being near the border, next to what used to be the murder capital of the United States. The last thing I wanted was an open border, from that perspective.

The points you've made are ones we all recognize can be made. The point, Mr. Beatty, about our customs department being well advanced of the U.S. customs department is very well-known.

Ms. Whelan, four or five of the other federal legislators, and I met with the federal legislators on the American side about two or three weeks before September 11. Two topics just sprang up—there was no agenda when we went into the meeting. One was on the environment, because we were all from the Great Lakes area, and the other one was the border problems.

• 1730

The legislators were all from Michigan. It was clear—and I guess this is what I'll leave you with—that if we're going to get through to the Americans, if they're going to come to the table in any kind of meaningful way, we're going to need the business community on that side of the border to be with us. All of you can play a significant role in encouraging them to think along those lines.

I was very pleased with the work I saw the Chamber of Commerce in Detroit doing, in conjunction with the one in Windsor. They've made a number of very good suggestions. I'm going to assume they're mirrored in your written presentations. We really need the business community on the Canadian side to be talking to the business community on the American side, so when we get the attention of Washington they will hear it from that perspective. Right now it's clear, from what we got from the American legislators, that the problem is not being identified in Washington as anywhere nearly enough of a priority.

Mr. David Bradley: I agree with you wholeheartedly, but I think there needs to be some coordination in that regard as well. We all speak to our U.S. counterparts every day, but surely there are strategies and intelligence to be shared. It's all being done in a vacuum.

I can also tell you that from the perspective of many of the business people from the United States who I've spoken with over the last few weeks, you have to understand that the optics of this are all through the glasses of security. There is very little room for dissent. The business decision may be, in order to maintain their supply chain, to invest somewhere other than Canada if the border remains problematic.

I'm not sure that the business community at large in the United States at this point, as well as their politicians, are seized with this the way we should be in Canada. We'll continue to work. It's great to see the two chambers, in that particular case, working together, but we have an enormous job to make them aware.

I have also worked a lot with Michigan legislators in the last couple of years. I was shocked my first few times in Lansing, Michigan—and this was dealing with the Michigan single business tax—at the lack of understanding of the fact that 50% of Michigan's exports go to Ontario. That just wasn't known. So I'm glad they're coming along now.

The Chair: We're almost done. I want Mr. McNally to have a chance to ask one question, and then we'll need to wrap up.

Mr. Perrin Beatty: Mr. Chair, would you indulge me for one minute?

The Chair: Yes, that's exactly right, Mr. Beatty, we want to come back to you for the wrap-up.

Mr. Perrin Beatty: Just in response, there was a very important point raised. Let me make it clear, you'll find that the business community is there to work hand in glove with government to take the message to the United States that Canada is part of the solution, not part of the problem.

At CME we've struck a joint committee with our counterpart, the National Association of Manufacturers, in the United States, with the goal of working together with our respective governments to see a solution to the problem. I think you'll find right across the board, with all business associations, the approach they will take is to work very closely with government and our counterparts in the U.S.

At the end of this month I'll be going down to Washington, to NAM's executive meeting. They've invited a number of cabinet-level officers of the U.S. government to be there. Again, I'll take that message. But it would be very helpful for us to make sure we are properly armed.

I agree with Ms. Whelan that when you strip away the rhetoric, there is a good deal of consensus about how you should approach dealing with the issue. The difficulty is that when somebody attacks the perimeter concept and dismisses it as simplistic or unworkable, our friends south of the border think we're rejecting collaboration with them.

If somebody has better terminology than “perimeter concept” for security, I'm inclined to adopt that terminology. But for heaven's sake, let's agree on an integrated strategy and get moving on it. Put it in the window. Let's press the agenda forward in Canada. Instead of reacting to the U.S., we should be going to Washington to gather the public and private sectors and say, “We have proposals to make here that will fix this problem. We're part of the solution.”

The Chair: Mr. McNally.

Mr. Grant McNally: Thank you, Mr. Chair.

Thank you for your presentations. I agree with the direction you're going. Surely if we can have an integrated North American air defence system, we can have an integrated border system that takes into account trade and security at the same time. Perhaps that's a model we can use with our American counterparts and those who reject the notion of that system here in Canada, that as much protection as that provides us, an integrated system will provide us the same kind of protection in terms of our economy and access to the markets.

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Would you have some statistics on dollars per day that would be lost, or how much it costs to wait an extra hour at the border? I know some numbers were thrown out a little earlier. It might be in your material.

Mr. David Bradley: In transportation costs alone, so not including the impact on Perrin's or David's members' facilities, every delay across the system means $1 million an hour Canadian in increased transportation costs. That would be dwarfed by the economic impact of the plant closings, the shutdowns of certain shifts, and those kinds of things.

The Chair: On this high note, I want to thank you very much on behalf of the committee.

If you can leave with us your presentation in particular, I think that would be very useful.

I want to ask Mr. Beatty one question with regard to a working committee—yours, Mr. Adams', Mr. Bradley's. Do you have a functional working committee of some type?

Mr. Perrin Beatty: We do. A couple of weeks ago we convened a meeting of about 40 businesses and business associations. We came together in Ottawa and formed a coalition for secure and trade-efficient borders. The goal was to have a private sector group come together to work very closely with government to not only make coherent proposals to government as to what could be done to make improvements but also work with government in terms of taking the message to the United States that Canada is part of the solution.

So the answer is yes. We will be coming forward with specific proposals to government on how we would see the system functioning.

The Chair: When would that be? Judging by your past experience, I would think you probably already have a good chunk of what the recommendation would be coming out of this group. Or do you think there would be other recommendations coming out?

Mr. Perrin Beatty: I don't think there will be a great deal that's going to surprise you. You heard tremendous similarity among the presentations here this afternoon.

I think for all of us in the private sector who've been dealing with the issue, our starting point is that trade and security aren't polar opposites. You will not have trade without security, so we have to look to improve both. As well, to do this, we have to move back from the Canada-U.S. border, and we have to put more resources on the approaches to North America. We have to act in concert with one another.

We'll be more specific in terms of providing some details on how that can be done, but I don't think the direction in which we're going will be of any surprise to any of you.

The Chair: So it's pretty well what we've heard here.

Finally, we have with us Mr. Brimble, the director responsible for operations. I guess the question to be asked is whether there have been any formal meetings with revenue and excise in terms of your group as well as the officials.

Mr. Perrin Beatty: Yes. When we held our meeting in Ottawa, we worked very closely with Mr. Lortie, who chairs an ADM-level interdepartmental committee. He was very helpful in making available to us senior officials from customs and excise, from DFAIT, from Transport Canada, and from the Solicitor General's department. So there's been very good collaboration there. We're certainly very much open to working with them in terms of providing information to them and in terms of trying to take that message out.

One plea I think I would make to members of Parliament is that it's important, when we're speaking to particularly our American customers, that we make it very clear that there's a determination on the part of all of us to be good, reliable suppliers. They can count on Canada.

I think all of us have concerns that investment decisions are being taken now based on the question of whether or not, if I build a plant in any of your constituencies, I can supply my American customers. A very clear message I think all of us, public and private, should be sending out is that Canadians are there to do business, and we will deliver on time.

The Chair: Finally, are the recommendations some of you have put before us in the hands of people like Mr. Brimble as well as other government officials?

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Mr. Massimo Bergamini (Vice-President, Public Affairs, Canadian Trucking Alliance): Certainly the recommendations we've made are in the hands of both officials and the PMO.

The Chair: We are going to make a report to Parliament on these issues, obviously. If we were to ask for something that Parliament should do, and we said, for example, that we wanted to form a working group that becomes the group coordinating activities, involving all three of your organizations—revenue and excise, transport, and other agencies—would that help you? Is that something that would move the agenda forward?

Mr. Perrin Beatty: Sorry, I didn't quite catch that.

The Chair: Is the working group in terms of your group as well as government taking place now formally or just informally, where you had one meeting and that was it?

Mr. Perrin Beatty: We are constantly in contact with one another. Each of our individual organizations no doubt have been in contact with relevant government departments. So I don't think you have to.... I think you could certainly encourage us to continue that, but I can guarantee you, this issue is absolutely vital to our members, and our associations are in regular contact with government.

The Chair: So the problem is not really communicating or working with the government; the problem is moving to the next step, making it a priority at the national level and dealing with the Americans.

Mr. Massimo Bergamini: Mr. Chairman, I think that is absolutely correct. I think the trade component, the border efficiency component, must become a priority on an equal footing with the security component.

We heard the speakers earlier who were focusing on the security component, understandably so, but I think we have to elevate efficiency to the same level. It has to become a government priority. We have to deal with these issues on a bilateral, binational level.

I think the working group you're suggesting would make a lot of sense if there was an equivalent on the U.S. side that would come together in a binational approach.

The Chair: Is that your view as well, Mr. Beatty?

Mr. Perrin Beatty: I think anything that will encourage collaboration between Canada and the U.S. on this will be all to the good. I guess on our side, what needs to be done first of all is to have an integrated approach.

I found it heartening that Minister Manley was asked to chair a cabinet committee, but what we need is an integrated, coherent proposal from the Government of Canada—i.e., this is how we propose to deal with the Canada-U.S. border as it relates to security, as it relates to expediting trade in a range of different areas—that is driving the agenda at the very highest level of government.

The difficulty is that all of the ideas that have been there have been there of long-standing. The CUSP report last December was an excellent report to both governments. There are lots of ideas on the table. The difficulty has always been engaging people at the most senior political levels to make it happen. You get things like shared customs facilities, where the problem is that the washrooms are on the Canadian side and the Americans have guns. We have debates as to how to resolve that.

Canadians have no more patience for this. Their message is “Fix it”. Now, at the political level, the message you folks have to give to the officials at all levels is “Fix it”.

The Chair: Thank you very much.

With this, I guess we are going to suspend.

Mr. Duncan, you have a brief comment.

Mr. John Duncan: Yes. Probably the best part of the meeting has been just what you've been talking about here. It's been great.

Somewhere in one of your presentations you were talking about having equivalency in terms of communications with the U.S. I wasn't sure if we were talking about having someone as the equivalent of a Tom Ridge or if we were talking at some other level.

Maybe it was you, Perrin, in your presentation. Did I misconstrue that?

Mr. Perrin Beatty: I think it may have been—

Mr. Massimo Bergamini: We did. It was our recommendation that we create a position of minister responsible for border efficiency and security. This minister would have general oversight, would be accountable to Parliament, and would provide some leadership, some direction, and some focus.

There are competing interests—competing political interests, policy interests—at play here. We think in this context it would have the advantage of breaking through some of the administrative problems that persist and signalling to our American friends that we're serious about it, that it is a priority. And it would give one interlocuteur for the Government of Canada on this serious issue.

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Mr. John Duncan: Yes, Mr. Bradley.

Mr. David Bradley: I don't want to read too much into it, but it's our understanding that neither the Minister for International Trade nor the Minister of Industry sit on the committee that Minister Manley chairs. This concerns us.

The Chair: Okay.

I want to ask you a question. If we were to ask for one person to be in touch with, who would that be? Would that be Mr. Beatty, Mr. Adams, or Mr. Bradley? Can Mr. Beatty be the point person if we want to communicate, or should we continue to communicate with all three of you collectively?

Mr. Perrin Beatty: Well, it should be more than just the three of us. There are several dozen business associations, all of whom feel very strongly about the issue and all of whom are working together.

The Chair: Do you have a list, Mr. Beatty, you can share with the committee if we were to have one more hearing, probably, or two more hearings?

Mr. Perrin Beatty: I would be pleased to do that, but I'd also encourage you to deal individually with each of the associations too. The coalition is designed to provide a certain amount of one-stop shopping and to ensure coherence, but there's expertise in each of the associations. I can't hope to replicate what the trucking association or the automotive manufacturers can do, so by all means, do it at both levels.

The Chair: Great.

Mr. David Adams: I think it's also been part of the problem, Mr. Chair, that when everything first happened, a number of industry associations obviously had huge concerns about the border, and we were all running, I think, to meet with different aspects of government. I think there's a certain amount of being “meeting-ed” to death at this point.

How are we going to do this? How are we going to set it up? How are we going to actually take action as opposed to just meeting and hearing updates? It's contingent on everybody now.

Mr. Perrin Beatty: I think, Mr. Chairman, from another life, perhaps, you would know Mr. Mark Boudreau, who is acting really as secretary to the coalition and also to CME's efforts. If he can be helpful as a resource person, working with you to help funnel information or assist in any way, we'd certainly make him available.

The Chair: Maybe the researcher or our clerk will talk with you.

We are going to have another meeting next week, I would suppose, and would invite some more....

Mr. Duncan.

Mr. John Duncan: That was going to be my final question.

All of you had a very similar message. Can you recommend to this committee any other sector that you think would be useful for us to meet with, that could cast light in an area that we might have overlooked? One of the areas I'm thinking of specifically might be the people who are actually doing the job at the crossings. Would that be useful for this committee, in your opinion? Would we learn anything useful or not?

Mr. Perrin Beatty: The difficulty is in finding people who have useful comments to contribute. Another would be the tourism industry, which has been seriously damaged as a consequence, including the carriers themselves and so on.

The greatest challenge now is that with the wealth of information that's out there, how do you take it, put it into a coherent report, and run with it? The real urgency is in terms of time. There's no shortage of people who are anxious to make a contribution, but I think all of us would say that the key thing, at this point, is to act.

The Chair: Excellent point.

On that note, on behalf of the committee and the House of Commons, I want to thank you very much for your excellent presentation. We will be doing a report, and hopefully as quickly as possible. We will not be dragging our feet. We will do one or two more hearings next week, and the report should be in the hands of Parliament no later than two weeks.

Thank you.