FAIT Committee Report

CHAPTER 1: TOWARDS A STRATEGIC
NORTH AMERICAN DIMENSION OF
CANADIAN FOREIGN POLICY

The consequences of continental integration have not been as formidable as many people believed. While Canada has surrendered some policy instruments in exchange for access to larger markets and pressures for harmonization have probably increased, it still retains significant room to manoeuvre, even in areas of policy most affected by integration. We should not be deceived by the illusion of false necessity.

George Hoberg, in Capacity for Choice:
Canada in a New North America,
University of Toronto Press, Toronto, 2002 (p. 311).

Canada has a long history of dealing with a major problem. That problem is, how do you live with a giant neighbour? How do you benefit from the interdependence in security and economics that exists on the North American continent, while at the same time preserving independence as a distinct political culture? I would argue that by and large, Canada has walked this tightrope quite successfully.… The idea that Canada always loses or that Canada is the servant of the Americans just doesn’t stand up to the historical test.… I think we have to free ourselves from some of our traditional ways of thinking and ask how we can make sure Canada continues its successful walking of the tightrope, to deal with this interdependence, while preserving its distinctiveness as a political culture. I think this can be done, and what’s more, I predict it will be done.

Joseph Nye, Dean, Kennedy School of Government,
Harvard University, Evidence*, Meeting No. 74, May 2, 2002.

The interests of Canada, the United States and Mexico in drawing closer together deserve far greater discussion and analysis. With attention placed on future proposals and scenarios, few people have asked “what is the purpose of all this discussion?” or “what is in it for us?” The absolute gains from adopting a North American approach need to be clear for any future discussions to be fruitful.… It is not clear at this point how far the three countries are willing to take the North American relationship.…Building a more integrated North America needs to be a collective endeavour consisting of many layers of government, parliamentarians, the private sector and society at large.

Stacey Wilson-Forsberg, North American Integration:
Back to Basics, Policy Paper, Canadian Foundation for the Americas,
Ottawa, August 2002 (p. 5 and 10).

1.1  The North American Relationship and Canadian Foreign Policy in Question

The last parliamentary review of Canadian foreign policy observed in its opening paragraph, “the world around us has been transformed. With the end of the Cold War direct military threats to Canada and its allies have receded, but order and security are still elusive.… Globalization is erasing time and space, making borders more porous, and encouraging continental integration.” A later section on Canada-United States relations noted increasing economic linkages and recommended cooperation in managing the “inherent tensions” of this most important bilateral relationship. At the same time, it also affirmed the necessity of protecting “our vital interests [through] the preservation of Canadian sovereignty and independence, and the capacity to play the sort of active and independent role in the world that Canadians demand.”¹

That 1994 review recognized international terrorism as among the emerging unconventional threats to peace and security, but could not have anticipated the extent of Canadian vulnerability to U.S. actions following the terrorist attacks of September 2001.

It asserted that Canada’s NAFTA membership made it “now part of the evolving North American region,” but did not consider relations with Mexico or possible trilateral North American initiatives.² Still, the above citations point to an essential dilemma that more than ever challenges the makers of Canadian foreign policy. Canada’s high and increasing international exposure, in particular to American power and continental forces, are realities that are impossible to ignore in the present, even if they could conceivably be mitigated over the longer term. Given that state of affairs, how can Canada continue to derive benefits from these associations while retaining a sovereign, independent course in both domestic and international policies?

Clearly Canada does not have complete freedom of action in the continental context. Political negotiations involve other sovereign partners; hence some compromises and trade-offs may be inevitable within the North American relationship, however it evolves and however the processes of regional “integration” are understood. This may also be true whether or not governments in any of the three countries actually have any conscious design for dealing with their continental relationships in response to integrating forces or pressures. The question for Canadian policy then becomes: are there opportunities to be seized and net gains to be realized that will substantially outweigh any potential downsides from more integrated arrangements? And can governments act strategically in order to maximize benefits from these arrangements while minimizing any costs associated with them? Indications are that Canadians have become increasingly confident about Canada’s ability to manage closer economic ties with its North American neighbours to overall Canadian advantage.³

This is a matter that continues to be vigorously debated, however, both from the standpoint of looking ahead to possible future scenarios for North American relations and from the vantage point of looking back over the last several decades of Canada’s economic integration experience in North America. For example, Professor Stephen Clarkson, who testified before the Committee in Toronto, observes in a new book⁴ that the Macdonald Commission of the early 1980s had argued for a more activist foreign policy and bilateral free trade with the United States, without seeing these goals as contradictory. Proponents of entering into such binding agreements, even one-on-one with a superpower, have generally contended that their mutually agreed rules can afford a smaller power like Canada more protection than the status quo. Yet some of the Committee’s witnesses, Clarkson included, would clearly contest claims that the record of the Canada-U.S. Free Trade Agreement and NAFTA has in fact enhanced Canada’s position in the way it was intended. Indeed, Clarkson contended that, on the contrary, Canada has made itself weaker as a result.

Similar arguments go back even further concerning the advantages or disadvantages of entering into continental defence partnerships, since as witnesses noted, Canada has been deeply integrated within a U.S. military security umbrella since at least the 1940s. Clearly, debates over the economic and security parameters of continental cooperation, and over their potentially positive or negative effects for Canada’s freedom of action, are not new. However, these debates have been exacerbated by the events of September 11, 2001 and their continuing implications for international affairs, notably in regard to the robust assertion of U.S. power abroad based on U.S. national security preoccupations. In light of these challenging circumstances, an overriding question that is more relevant to ask than ever is this: how should Canada’s foreign, defence, and trade policies take into account North American integration forces in ways that advance, rather than compromise, Canada’s core national interests and values?

Some witnesses saw the factors pushing forward integration as facts of North American life. They suggested that Canada seize opportunities to profit from closer cooperation with the United States, and to a lesser extent Mexico, seeking to manage continental economic and security relationships to Canadian advantage. As was pointed out to the Committee, whatever governments decide to do or not to do, a “silent” integration is happening anyway as a result of the daily decisions of millions of individuals, businesses, and associations. Several witnesses, such as Danielle Goldfarb of the C.D. Howe Institute, argued that the time is ripe for Canada to press forward with a “big vision,” to be aggressively proactive on the integration agenda.⁵ Other witnesses, however, saw further integrationist pressures as something to be resisted, or at least contained, and opposed any closer alignment of Canadian policies with those of North American partners. A few, such as David Orchard in Saskatoon, sought to reverse the extent of integration and policy convergence that has already taken place.⁶

Can Canada be a good neighbour, friend, ally and partner of the United States and Mexico, realize net gains from a liberalized North American economy, and still avoid the kind of “Americanization” that some fear will lead to a foreclosing of democratic public policy options within Canada? In foreign policy terms, would a Canada that became too closely drawn inside a North American “perimeter” thereby marginalize its capacity to exert its own distinctive influence in world affairs and reduce its status to that of a peripheral power? Or is it the case, as a former Canadian ambassador to the United States, Allan Gotlieb, argued in a September 11, 2002 article, that it is time to accept that Canada’s international position has changed. In his words: “Canada’s greatest asset on the international stage is our relationship with the United States.… Are there not elements of a grand bargain to be struck, combining North American economic, defence and security arrangements within a common perimeter?”⁷ At the same time, however, in a companion column, a former American ambassador to Canada, Gordon Giffin, suggested: “The relationship doesn’t need a ‘new idea’, rather a renewed mutual commitment. A confident Canada with a comprehensive vision can define the direction and substance of a new momentum for our partnership.… In crafting that Canadian vision, which must first be based on Canada’s interests before it can be viewed through the friendship prism, it is well to realize that on most matters there is no monolithic American view.”⁸

What are we to make of these contrasting assessments of Canada’s current position in North America? The Committee believes there can be a middle ground that will allow Canada to enter into carefully considered cooperative arrangements and negotiated agreements with North American partners in such areas as common security and predictable market access, where there are demonstrable benefits to be obtained for Canadians. But we also recognize that this will require an intensive effort to take stock of our own situation, to build public consensus around any agenda for North American partnership serving Canadian interests and values. Canada then needs to be able to bargain effectively on a reciprocal basis of mutual interests with its North American partners, the United States in particular. As the Committee’s own meetings in Washington confirmed, getting the attention and interest of the United States is usually one of the biggest challenges in itself.

Canada’s Situation in North American Perspective

Canada’s position and policy options in the North American context have undoubtedly been conditioned by what Professor Daniel Cohn of Simon Fraser University described to the Committee as processes of market-oriented “regionalization”, to which Canadian public policy frameworks have generally adapted during the past several decades. No shared North American identity or “constituency”, at least in any political sense⁹, may have emerged out of these predominantly economic North American integration trends, which we profile in detail in Chapter 2. Nevertheless, they have potentially significant implications for how Canadian policy and regulatory decisions are framed. As Cohn described it: “Regionalization is being driven by the choices we made to liberalize. … We can indeed be different, but we have to choose to pay the price of our differences.”¹⁰ Cohn suggested that, compared with other countries of the Americas, Canada may be in an enviable bargaining situation when it comes to pursuing its particular interests within a regional integration context that is dominated by its giant neighbour.¹¹ The onus is clearly on Canada, however, to do its own cost-benefit analysis of where more integrated policies might make sense,¹² as well as where Canadian policies — on foreign, defence and security, and trade issues, and in affected domestic fields — ought to be different from, or perhaps even at odds with, those of its North American partners. And this analysis must take into account cross-border effects, given how costly disruptions to established continental connections could be, potentially raising the “price of difference” to unacceptable levels.

A number of observers have noted the growing impact of North American factors on Canadian foreign policy in recent years, despite instances where Canadian policies may have notably diverged from those of the United States (e.g., on the Ottawa Convention to ban landmines and the creation of an International Criminal Court). Some have raised the prospect of a “North American trajectory”, “vanishing borders”, and a “return to continentalism”. Even former foreign minister Lloyd Axworthy called for new forms of trilateral North American cooperation beyond trade.¹³ The Canadian state, it has been argued, still has choices to make along the path of North American integration, even if it cannot simply reject the facts of that increasing integration and go backwards.¹⁴

Some of our witnesses viewed the range of Canada’s choices as being quite circumscribed. For example, Professor Gordon Mace, Director of Inter-American Studies at the Institut québécois des hautes études internationales, told the Committee that the FTA and NAFTA trade deals have fundamentally and inescapably altered the foreign policy landscape. Canada’s increased economic vulnerability within the “new economic management framework”, as he put it, has “greatly decreased” Canada’s leeway in bilateral relations with the United States, and he urged the development of a broader partnership with Mexico and other countries of the Americas as a “natural counterweight.”¹⁵

The shock of September 11 has sharpened considerations of Canada’s situation as perceived in continental and global terms. Maureen Molot and Norman Hillmer observe that it has given “a new urgency to questions of sovereignty and decline.”¹⁶ Their controversial thesis that Canada may be a “fading power”, especially viewed through a North American lens, is certainly open to dispute, however. Many witnesses urged that Canada not sell short its ability to exert independent influence on the United States. Two prominent Americans — former senior Congressman Lee Hamilton, whom the Committee met in Washington, and Joseph Nye of Harvard University, who testified in Ottawa — both made a forceful case that Canada, with its strengths in multilateralist non-military diplomacy, can be helpful in cautioning the U.S. against a temptation to “go it alone”.

While Hamilton acknowledged that “America is filled with its own importance”, he suggested Canada could take a firmer stance. “You folks capitulate too easily”, he said. Christopher Sands, head of the Canada Project at Washington’s Center for Strategic and International Studies, who testified in November 2001, has also argued provocatively that Canada can choose to pursue a “strong state strategy” in approaching the United States and responding to its concerns. Indeed, he sees opportunity where others might see limitations, stating: “Thanks to deepening interdependence through economic integration, Canada is not a fading power in the United States. It is instead a rising power, more important to Americans and their prosperity than ever before in U.S. history.”¹⁷

Nevertheless, the Committee has no illusions about the challenges facing Canada in being heard in U.S. decision-making circles, given current national security preoccupations and the ever-present domestic political calculations that prevail within America’s complex federal system. Witnesses emphasized how important it is for Canada to tackle that system as it really operates, and at many points and levels, not just at the centre of federal power in Washington. Canadian policy must take into account how September 11 has “changed the United States far more than it did the rest of the world”, in the words of Jessica Mathews, President of the Carnegie Endowment for International Peace.¹⁸ Her view of U.S. foreign policy, which many of the Committee’s witnesses would share, is that the record so far “is assertively unilateral and anything but humble”.¹⁹ At the start of George W. Bush’s presidency, concerns were expressed that the United States might focus more attention on Mexico than on Canada. But in Mathews’ assessment, that intended Mexican focus has been “‘disappeared’ by 9/11” on the U.S. foreign policy radar screen. There is no mention of Canada at all in this global review by one of Washington’s most multilateral-minded think tanks.²⁰

Canada cannot assume that its voice will carry weight in the United States based on the facts of North American economic integration or expectations of a historic “special relationship”, which according to scholars Randall and Thompson has always been more exaggerated than real. In their blunt estimation: “To the United States, Canada is just like any other country.… Canada’s lack of understanding of this basic truth has been the source of confusion, uncertainty, and wounded sensibilities on the part of Canadians when Canadian policy has either failed to meet a desired American standard or has seemingly or actually challenged a U.S. position.”²¹

Andrew Cohen, who testified before the Committee in November 2001, has argued that Canada should just accept the obvious asymmetry in the importance of the bilateral relationship to each side and move on to build up our own foreign policy assets: “a strong credible military; an efficient, exemplary aid program; an effective diplomatic service and a first-class intelligence service. With these tools, Canada could speak more confidently on the world stage.” In Cohen’s view, while Canada will have little choice but to meet increased American security concerns in the North American “neighbourhood”, Canada need not care about being noticed in Washington if it concentrates on being a more effective multilateral actor.²²

That approach might seem to make the best of a troubling situation. It would be cold comfort to softwood lumber and agricultural producers, however, or to other Canadians directly impacted by U.S. policies and pressures. The Committee takes the position that Canada’s ability to have its issues dealt with seriously within the American political system matters a lot, even if we should not get hung up on symbolic appearances. It is influence at the practical policy level that counts. Hence in Chapter 5 we will devote detailed consideration to the modalities for enhancing Canada’s bilateral diplomacy with its most important partner.

Is Canada’s Sovereignty at Risk in North America?

Turning to the other major set of concerns noted by Hillmer and Molot, namely those related to Canada’s sovereignty at home and abroad, the Committee heard distinctly divided viewpoints. Some advice boiled down, in effect to: worry less; do more. According to historian Reginald Stuart, “the historical evidence shows Canada’s sovereignty has been relatively secure”, and recent polls “suggest Canadians have far more confidence in their sense of independence, difference and identity from Americans than many of the so-called spokespersons for Canadian sovereignty.”²³ James Fergusson of the University of Manitoba’s Centre for Defence and Security Studies suggested: “Our cooperation with the United States, our closest ally and friend, has always been premised on its important role in maintaining Canadian sovereignty at a reasonable cost both fiscally and politically.”²⁴

Nor is Canadian difference necessarily a problem for the United States, contended Professor Louis Balthazar, referring to his experience of “the American desire to recognize Canadian sovereignty.”²⁵ Leading international relations scholar Joseph Nye, a former U.S. Assistant Secretary of Defense for International Security Affairs, did not see why U.S. initiatives such as a new military “Northern Command” should “have a negative effect on Canadian sovereignty” any more than NORAD did, adding: “I believe concerns about loss of sovereignty often get in the way of clear thinking.… Interdependence in security affairs has been there for some time, and I don’t see any reason Canada cannot retain the right to withdraw from activities or dimensions that it does not approve of.”²⁶

Also addressing the security and defence field, Professor Frank Harvey found concerns about loss of sovereignty to be overstated. In his view, there has been for some time very little substantive divergence between Canadian and American foreign policy preferences. He added that if Canada wants to “have the luxury” of going its own way separately from the United States, it will have to make investments in international policy capabilities, not just “talk a very good game”.²⁷ More provocatively still, Gordon Gibson, Senior Fellow at the Fraser Institute, took the view that much of the sovereignty anxiety is misplaced, since in the end, “sovereignty lies in the individual. … Nation-states are mere public utilities for the collective exercise of individual sovereignty. If our individual choices bring us closer to the Americans or them to us, who is to say that’s wrong?”²⁸

In contrast, some witnesses were adamant that Canadian sovereignty is at risk of being compromised, and that the Government ought to strive to retain as much foreign policy autonomy as possible, enabling the pursuit of Canadian interests and values internationally that may be quite different from those of our southern neighbour. For example, Professor Nelson Michaud warned that: “When we talk about sovereignty, we may find ourselves on ground that is at times slippery.… A North American security perimeter, a border that meets the same norms on both sides, north and south, is tantamount to saying that Canada no longer controls its border. At the very least, it is joint control. … We have a problem if we want to protect Canadian sovereignty.”²⁹ Rod Hill, a former research adviser to the Macdonald Commission, sharply rejected the line that says “if we give it up voluntarily that’s an exercise in sovereignty, so we’ve retained our sovereignty by giving it all away, you see, because it was a free choice.”³⁰

The Committee recognizes the need to take into account the concerns about sovereignty that surfaced repeatedly in the testimony, as well as those suggesting that Canada may be in a weakened position to defend and promote its interests at and beyond its borders. However, as we affirmed earlier, we believe the choices are not so stark as between passive surrender and compliance with U.S. demands on the one hand, or an aggressively nationalist version of Canadian unilateralism on the other. Surely, in the context of having good North American relations, the reasonable approach is to discern where cooperation among Canada, the United States, and Mexico — whether through bilateral, trilateral, or multilateral channels — can serve the best interests of each partner.

Every international relation that is not hostile, subservient, or purely unilateralist implies some sharing or pooling of sovereignty for a mutually agreed purpose. The more Canadian foreign policy instruments are able to contribute to such purposes, the more confident we can be of developing a North American dimension of these instruments that asserts Canadian interests and values in a mature, respected and credible fashion.

1.2  Defining What Canada Wants: First Reflections on Bilateral, Trilateral, and Multilateral Aims in a North American Context

That said, an important policy development task will be to define what goals can be accomplished by the North American dimension of Canada’s foreign policy. This is a primary responsibility of the Government of Canada, in consultation with Canadians, unless we are content to let North American relations drift or have our agenda driven by others. The Committee’s hearings during the past year provide a sense of policy priorities and options, but also indicate that a national consensus remains to be forged around clearly stated aims and strategies for achieving them. The following sections of this chapter look at some of the different perspectives that have emerged from the testimony, and at the impact of September 11 on the shape of a North American agenda. They also lead into a consideration of the sort of coherent, strategic approach the Committee thinks is required.

A few preliminary notes are in order, the first of which is that realism requires acknowledging the primacy of the Canada-United States relationship for Canadian purposes. How that relationship is managed affects virtually every aspect of foreign policy and certainly determines the effectiveness of any North American dimension. However, if it is the case that the United States has a very different perspective on the world, as Foreign Minister Bill Graham has suggested, then distinguishing Canada’s approach will always be a necessary, and often an uneasy, task. As Mr. Graham has put it: “I’m not saying I want the foreign policy to be designed in contradistinction to the United States, but we have to hold our own values.”³¹

Related to the above, we need to reflect further on what key values should be projected in our international relations, including those with the United States. When such normative questions are asked, goals such as support for peacekeeping, human rights, cultural diversity, assistance to poor nations, the United Nations, and multilateralism in general are often mentioned. Neither the strength nor the relative weight of these goals can be taken for granted, however. For example, a recent poll commissioned for Maclean’s and l’Actualité indicated that, when it comes to the importance of retaining sovereign control, most Canadians ranked cultural concerns considerably lower than natural resources, health, the economy, immigration, defence, and the currency.³² Yet this is hardly an adequate guide. A letter to the Committee from the Coalition for Cultural Diversity urged defending the principle that “cultural policies must not be subjected to the constraints of international trade accords.”³³ Professor Ivan Bernier of Laval University also appealed for a Canadian vision of the role of culture in the face of current circumstances:

I think that in any review of our policy on the U.S. following the events of September 11 … Canada must absolutely continue to defend specifically the importance of the cultural dimension of these phenomena [dealing with increasing economic integration and responding to new security threats]. This is a contribution it must make, I believe, because Canada understands this problem and must seek to have its partners understand it, particularly the United States.³⁴

Witnesses raised other challenging subjects that could, if skilfully managed, become areas of potential Canadian comparative advantage. For instance, Robert Huebert of the University of Calgary’s Centre for Military and Strategic Studies highlighted the issue of Canada’s control of its Arctic borders and sovereignty over the waters of the Northwest passage — the latter still contested by the United States — which, if climate change scenarios prove correct could soon become a navigable strait open to international shipping.³⁵ The North American dimension of Canada’s foreign policy will need to take into account this new northern dimension.

In terms of a comprehensive perspective of Canada’s socio-economic future, Danielle Goldfarb of the C.D. Howe Institute defined “Canada’s key interests in the Canada-US sphere as obtaining secure access to U.S. markets (reducing obstacles to the flow of goods, services, capital, technology and people) while maintaining control over policies that are important to meeting our economic and social goals as a country, such as determining the profiles and numbers of permanent immigrants.”³⁶

Other valid Canadian objectives could no doubt be identified. The point is that the Government would be well advised to engage Canadians more directly and regularly on what priorities to pursue in terms of relations with the United States. Ultimately, government must lead in this area. But it should do so on the basis of an evaluation of our national interests and values and a firm grasp of the issues on which the Canadian public would be willing to “pay the price of difference.” That is why we make a recommendation at the end of this chapter that calls for a sustained process of public engagement and consensus-building in determining Canada’s objectives.

Second, the only thing worse than not having a clear direction for dealing with the United States would be a too single-minded focus on the one bilateral relationship to the exclusion of others. The era of a 1970s-style “third option” may be over. But even within North America we must not neglect the counterbalancing potential of our still limited partnership with Mexico. That is why the Committee devotes considerable attention in Chapter 5 to suggestions for enhancing bilateral relations with Mexico, as well as working with Mexico towards more trilateral processes and objectives. Canadian diplomacy in the rest of the Americas provides a further avenue for this counterbalancing effect. As Professor George Maclean, who has written on Canada-Mexico relations, told the Committee: “Canada’s foreign interests are best served through the pursuance of multilateralism, particularly as a means of preventing a singular hemispheric integration policy designed and implemented by the United States. In short, Canada needs to maintain a balance of principal attention to the bilateral relations it has with the United States, coupled with an enhanced role in the hemisphere … in spite of the typical interpretation of a continental vision for Canada that assumes a retreat from the multilateral legacy.…”³⁷

Third, Canada’s ability to play a constructive foreign policy role, including vis-à-vis the United States and within North America, depends on having a diplomacy that remains truly internationalist in scope. According to Don Barry of the University of Calgary, “We should realize that the more we integrate with the United States, the less visible we become elsewhere. But Canada has important global interests. Hence we must maintain and enhance our other relationships, including those in Europe…”, provided that “these relationships grow out of our national interests and that they not be used simply to demonstrate our independence from the United States.”³⁸ Louis Balthazar, while sceptical of Canada invoking a traditional multilateralism as a “refuge” to offset the preponderance of the bilateral relationship with the United States, suggested that an independent Canadian foreign policy could in fact be perceived as an advantage to the United States in the multilateral arena. As he stated:

… I believe it is in the American interest that our policy sometimes be different from theirs. That allows them to use us to test the wind, given our situation in terms of international policy and the differences in our responsibilities with respect to theirs. … this can allow us to play a certain role at times, in that we can allow ourselves to make breakthroughs in international diplomacy that the Americans cannot allow themselves to do. It gives a certain margin to do things that the Americans don’t do and sometimes, to make our interests and our principles known to the leaders in Washington.³⁹

The Committee believes there are many reasons to see Canada as being able to make independent choices within and beyond North America, notwithstanding the paramountcy of the Canada-U.S. bilateral relationship, the parameters of NAFTA, and other conditions of varying duration affecting our freedom of action (the focus on border security post-September 11 being only the latest and probably not the last). The hard part will be to follow through effectively with these choices after more clearly defining our national objectives, by being prepared to pay for what we say we want, and by skilfully exercising the actual diplomatic leverage that Canada is perhaps uniquely fortunate to possess while sharing a continent with the world’s sole superpower.

1.3  Debating North American Options

In light of recent opinion polls indicating considerable Canadian ambivalence over, and frustration with, closer trade relations with the United States,⁴⁰ it is not surprising that the Committee heard very mixed views on Canada’s interests in deepening North American partnerships. Beyond the specific concerns expressed about the impacts, or deficiencies, of the continental free trade agreements (FTA/NAFTA) — notably over softwood lumber, farm subsidies, water, culture, and investor-state disputes under NAFTA’s Chapter 11 (see Chapter 4) — these divergent views tended to colour overall stances on whether more integration of Canada within North America was a good or a bad idea.

Some argued that increasing economic integration has substantially benefited Canada and that opportunities exist to negotiate further integration on terms favourable to Canada. Others criticized the record of continental free trade. Often tying that record to critiques of corporate power, privatization, and perceived loss of democratic public control, they objected to even the current level of integration as being a threat to Canadian sovereignty, interests and values. So while some witnesses looked forward to a more integrated North America, many others clearly did not. Business spokespersons generally aligned with the first view; labour spokespersons with the second.

The first of the Committee’s cross-country hearings, in St. John’s, Newfoundland on February 25, 2002, sharply revealed these faultlines. Chris Vatcher of the Memorial University Students’ Union stated: “As a concerned youth of this country, I definitely have concerns about moving anywhere nearer the United States.… I feel our country often plays back-up batter or something to the United States.… I urge the Committee to stress that we are a sovereign nation with our own individual concerns. Moving towards the United States model, which is definitely not sustainable and definitely in need of major adjustments, is not the answer.”⁴¹ According to Elaine Price of the Newfoundland and Labrador Federation of Labour, in the 1990s decade of free trade, “Canada became a noticeably more unequal society. Real incomes declined for the large majority of Canadians and increased only for the top fifth. Employment became more insecure and the social safety net frayed.… Contrary to conventional wisdom that the FTA and its successor, NAFTA, helped create jobs, free trade did in fact result in a major net destruction of jobs.”⁴² However, Sean McCarthy, representing the Newfoundland and Labrador Branch of the Canadian Manufacturers and Exporters, saw the issue as being Canada managing necessary North American relations to better advantage: “I think there have to be shared policy objectives between us and the United States.… Our economies are already linked. Further economic linkages are inevitable and beneficial. What’s happened over the last ten years has proved the benefits associated with that.… In order to have a strong public policy front internationally we have to have a strong fiscal and economic front to support those goals.”⁴³

Among opponents of further integration along North American lines, Professor Rod Hill of the University of New Brunswick put the case as follows:⁴⁴

The majority of Canadians, I think, have just no interest in this integrationist agenda, no interest from either the political or economic angle. And they must now, I think, recognize what’s going on and say no to further integration with the U.S. I firmly believe we have that choice. The integrationists will pretend to you that we will pay a heavy price for this. But the facts do not support their case. They will also try to narrow the focus of the debate, to focus it on the costs of not integrating further while ignoring the benefits of retaining our policy autonomy — benefits that are not easily quantified but of course are no less important for that.

Hill cited research by British Columbia economist John Helliwell on the importance of domestic factors (which would include interprovincial trade) to citizens’ welfare and the “diminishing returns of additional openness” through more external integration. Hill also warned that continental integration might jeopardize Canada’s international position, citing Helliwell to the effect that: “If Canada is faced with a foreign policy choice between a globally oriented policy and one primarily focussed on continuing efforts to harmonize policies with the United States, I think the decision is obvious.… The latter policy is likely to represent bad economics and bad politics.”⁴⁵ In Saskatoon, David Orchard suggested that Canada could pursue a strategy similar to that of Norway, which has twice voted to remain outside the European Economic Community.

By contrast, the Committee also heard appeals at both ends of the country (e.g., from the Atlantic Institute for Market Studies in Halifax and from the Pacific Corridor Enterprise Council in Vancouver) to strengthen natural economic ties with adjacent regions across the border and improve links to the wider continental economy, highlighting border and transportation infrastructures as key areas to work on. For some, the risk of being marginalized or cut off from the centres of North American economic dynamism was seen as the biggest risk to future jobs and incomes growth.

In terms of national strategy, supporters of integration contended that policy must face up to the realities of Canada’s situation. Professor Michael Hart of Carleton University’s School of International Affairs pointed to factors arising from “deepening silent integration … [and] the fact that the institutions, the procedures, and the rules the two governments [of Canada and the United States] have in place at this particular time are more in tune with the reality of a free trade agreement, but not with the depth of integration between the two countries, a depth that now goes far beyond the free trade agreement and is more like a customs union or even a common market. I think the most important challenge the two governments face is to find the appropriate institutions and appropriate procedures and rules that catch up to this reality.” In Hart’s view, “we need to acknowledge that a broad convergence in policy methods and ideas already exists between the two countries.… Deepening integration between the two countries is likely to continue, and will deepen even more as the two societies become ever more connected. The question for governments, therefore, is how to manage, help, or hinder that integration.”⁴⁶

Dr. Jayson Myers of the Canadian Manufacturers and Exporters put Canada’s North American challenge this way:

Canada’s economic integration with the United States is being driven by the successes and restructuring that continue to shape Canadian industry under the NAFTA. The nature of that integration, however, poses a number of key challenges for Canada and for Canadian business. It creates constraints for public policy, but the abrogation of Canadian sovereignty is not at issue, in my view. This is a debate about how best to manage our economic policy relationships with the United States and Mexico in a way that ensures continuous economic growth and the creation of high-value jobs in this country, while at the same time guaranteeing Canadians the ability to shape our own economic, social, and cultural futures.⁴⁷

Overall then, the spectrum of views ranged from a strong rejection of a more integrated North America as a threat to Canada pursuing its own path to an equally strong embrace of a mainly market-driven integration as offering a path of opportunity for Canada in terms of Canadians’ security and prosperity on the continent. Occupying a more middle ground were witnesses who accepted the need for policies to adapt to the realities of integration, but who insisted that it must be Canadian government decisions that lead and shape that response.

The Committee believes most Canadians want to see a pragmatic, not ideological, approach taken to relations with North American partners. However, our testimony revealed important divisions over whether a high-stakes “strategic bargain”, of the kind advanced by Wendy Dobson among others, could or should be pursued with the United States in particular. Witnesses also differed over the best tactics more generally for advancing Canadian interests in continental dealings with its partners.

On one side, arguments were made that slow and steady is an insufficient strategy. As Andrew Wynn-Williams of the B.C. Chamber of Commerce expressed this view:

… the reality is that integration is not going away, so whatever decisions we make, we must make them quickly or the opportunity to actually make a choice will pass us by. Canada has the ability to control the evolution of our relationship [with the U.S.], primarily because it’s one that matters more to us than to them. … The question we are faced with is whether we are going to make incremental changes to take what comes and to adjust to the changing global circumstance as they are forced upon us, or whether we are going to approach this with bold vision and strong leadership. The Chamber believes we can’t let the future happen by default.… Canada must be in the driver’s seat, not the passenger seat.⁴⁸

However, even among Chamber of Commerce representatives there were also cautionary reservations expressed about jumping into bold new initiatives such as moving towards a customs union or other formal integration agreements. While stating that Canadian business people tend to look at North America as a “single, integrated marketplace, with only minor differentiation,” and that the Canadian government lacks a “strategic approach” to the Canada-U.S. relationship, Chamber Vice-President Robert Keyes observed that “reopening NAFTA could also be fraught with difficulties.… You’re going to take your chances with the outcome. It’s not always a win.”⁴⁹ Chamber policy analyst Alexander Lofthouse added that the European Union’s long experience with negotiating international trade as a bloc remains extremely difficult and conflicted along national lines, drawing the lesson that proposals for further economic integration arrangements should be investigated “with our eyes open.”⁵⁰

Some have argued that only a more comprehensive deal (Michael Hart) or a “big idea” (C.D. Howe Institute) is likely to attract serious interest in the United States. The Committee’s meetings in the U.S. capital indicated to us that going beyond the existing NAFTA does not appear to be on the present political or policy agenda in Washington. Canadian sceptics of moving ahead rapidly with a major new approach to the United States at this time worry that more might be lost than gained. Louis Bélanger, Director of the Institut québécois des hautes études internationales, while advocating a more systematic rather than ad hoc approach to continental cooperation in order for Canada “to better control its asymmetrical relationship with the United States”, warned that: “There’s often a great temptation to reach quick compromises with the Americans, because there are some urgent short-term economic gains for us.… If we do this we are agreeing to an approach that is a losing one for Canada.”⁵¹ University of Calgary Professor Don Barry argued that “the strategic bargain concept should be approached with great caution. Apart from the formidable problem of managing trade-offs, integrative arrangements, once arrived at, are rarely reversible, create pressures for more integration, and have long-term consequences, many of which cannot be foreseen.”⁵²

Professor Reginald Whitaker of the University of Victoria rejected the case put forward that “the current security crisis offers an opportunity to negotiate a grand new framework to solve some of Canada’s outstanding economic problems in the Canadian-American relationship, even if we are to assume that such arrangements would be a good thing, for the purposes of argument. Rather, the current context makes such negotiations particularly dangerous for Canada. More than ever, I suggest, incrementalism is the safest route.” Whitaker went on to emphasize “that entering into strategic negotiations towards closer integration with a bargaining partner that is fully committed to unilateralism and maximum maintenance of its own sovereignty, and has the clout to enforce that, seems unwise and ill-advised.”⁵³

The Committee agrees that witnesses’ precautions about a hot pursuit of more integrated arrangements with North American partners, especially bilaterally with the United States, are a useful reminder that any integration proposals ought to be subject to a rigorous national public-interest evaluation before being proceeded with, and then only if the results of such public examinations show significant net benefits to Canada outweighing any costs. That does not mean Canadians should be content with the status quo; far from it. Ideas, whether for more or for less integration, that promise advantages for Canada should be investigated thoroughly, especially “big” ones that could affect many policy areas. We do not expect that outcomes can be predicted with certainty, even among the most pragmatic of the contending approaches to North American integration. However, the Government must be in a position to make the best assessment possible, and — as important — to share its strategic objectives with Canadians through a transparent public process. These questions are too important to be left to quiet negotiations behind the scenes.

1.4  The Impact of September 11 on the North American Agenda

What of the unanticipated circumstances that arose as a result of the September 11, 2001 terrorist attacks on the United States? How has the longer-term aftermath of those terrible events altered or reoriented the North American policy options confronting Canada?

Most of the Committee’s witnesses agreed there has been a significant impact, though many would also agree with Denis Stairs’ observation to us in November 2001 that “making long-term policy in circumstances of short-term high drama will produce mistakes.”⁵⁴ September 11 emerged as a frequent touchstone in testimony for galvanizing a more proactive Canadian approach to relations with North American partners. For example, Dr. David Zussman, President of the Public Policy Forum, one among a number of Canadian public and private organizations investigating continental integration scenarios, concluded that “September 11 has dramatically changed the nature of Canadian-U.S. relations, and the border has become a symbol of Canada’s very close economic ties with the U.S., but also of Canada’s vulnerability to American influence and will.” Noting that “Canada’s economic security is inextricably linked to the physical security of North America,” he contended that “September 11 has provided an opportunity to fix” longstanding problems related to the border and immigration policies.⁵⁵

Integration sceptics as well as proponents were quick to acknowledge the policy pressures that have been generated. As Reg Whitaker put it: “The effect of September 11 has been to intensify the twin problems of North American security and trade and to tie the two together in an unprecedented manner.” Whitaker warned that “the call now is to seize the border security issue as a window of opportunity for Canada to convince the U.S. that North American integration should be accelerated and formalized.”⁵⁶ Stephen Clarkson expressed concerns that, “In the context of both Mexico and Canada depending on the U.S. market to purchase nearly 90% of their exports, and in the shadow of September 11th, when Washington caused pandemonium in the board rooms of the continent by (temporarily) shutting down U.S. borders, the policy elites in all three countries are talking up the need for making another huge leap into full integration.”⁵⁷

Indeed, the Committee heard some testimony linking far-reaching integration agreements to a post-September 11 point of departure. In the words of Professor Barry Scholnick of the University of Alberta School of Business: “What you saw after September 11 is the concern about the functioning of the border increasing rapidly in political circles as well as, I would argue, in the views of many Canadians. My proposal to move from the current free trade agreement to a deeper economic integration and customs union I would argue has significant political benefits in light of September 11.… I would suggest that, politically, the time right now is appropriate to introduce the idea of a customs union in both Canada and the United States.”⁵⁸ Michael Hart did not go that far but stated: “I think timing is crucial. It is very difficult to get the Americans’ attention, but we have that attention. We have a dialogue that is in progress, and now is the time to move ahead on it.”⁵⁹ Although the Committee did not detect much interest in “NAFTA-plus” ideas from State Department and U.S. Trade Representative officials with whom we met in Washington, there have been suggestions that the fallout from September 11 could allow Canada to take over the lead from Mexico in setting such an agenda.⁶⁰ On the defence and security front, Frank Harvey agreed that “the Americans have become much more aggressive about becoming unilateral after September 11,”⁶¹ but was among those arguing for Canada to move forward with closer military and security cooperation in areas where the growing mutual vulnerability of North Americans has underlined convergent interests with those of the United States.

On the other side, a number of witnesses were not persuaded that September 11 should necessarily evoke a Canadian response towards further integration or policy alignments with the United States. Indeed, on the contrary, Rod Hill contended that “since September 11, what went on in the United States has been seized upon in a very crass and opportunistic way by the integrationist forces to just redouble their clamour. In fact, the way I feel personally — I’m speaking again now as a citizen, not an economist — is that it’s simply redoubled my view that it’s more important than ever to keep our distance from the United States.”⁶² In terms of the trading relationship, law professor Richard Ouellet of Laval University argued that Canadian and American trade policy interests do not coincide, and the September 11 events are not “the best of reasons” for going towards North American integration.⁶³ His colleague Gordon Mace took the view that “those events will not change the fundamental Canada-USA relationship.”⁶⁴

Confronting the possibility of using September 11 to argue for securing a common North American space or defence “perimeter,” Professor Stéphane Roussel expressed concerns that such security concepts might be too easily expanded and linked to multiple sectors of cross-border cooperation, noting that “very few sectors are excluded from the pretext of security, explaining why it is so important for Canada, in particular, to define the limits of cooperation between the two states very carefully.”⁶⁵ Professor Laura Macdonald, Director of Carleton University’s Centre for North American Politics and Society, told the Committee: “The events of September 11 require that we think much more carefully about where North America is going and what Canada’s role in it will be.… After September 11, we’ve seen the return of U.S. attention to its northern ally, but we seem to be getting attention for the wrong reasons, because of the perception in the United States of Canada as a haven for terrorists. These perceptions have profound implications for Canadians.” Macdonald worried that a “Fortress North America” approach could lead to a “Mexicanization” of the Canada-U.S. border, rather than more appealing “Europeanization” options, as debates over balancing free-flowing commerce and security imperatives play out in Washington.⁶⁶ These are issues the Committee takes up again in Chapters 3 and 4.

Most witnesses would probably agree with the assessment that, more than a year after the September 11 terrorist attacks, U.S. security concerns still predominate on the actual political agenda of North American cooperation. These are concerns also shared by many Canadians. Public opinion surveys show majorities of both Canadians and Americans supporting common border security policies and putting improved border security ahead of the easing of restrictions on cross-border trade, which was most directly affected by the measures taken in response to September 11.⁶⁷ Whereas the U.S.-Mexico relationship appears to have cooled, a closer Canada-U.S. partnership has emerged around measures oriented towards defending North America against possible future terrorist attacks. At the same time, and in a context of growing assertion of U.S. power, as Daniel Cohn put it succinctly: “The price of difference has gone up as of September 11 — no doubt about it.”⁶⁸

1.5  Towards a Strategic North American Policy Direction for Canada

So what is to be done? The first point to make is that Canada, and Canadians, have some choices to make, as a sovereign country and in the North American context post-September 11. The Committee takes the view that we do have policy options and substantial room to manoeuvre even in policy areas most affected by increased continental integration⁶⁹ and by new security imperatives. We note, moreover, that Canadian policies have continued to diverge from those of the United States on major matters of global import, such as the International Criminal Court, the Kyoto Protocol, and Iraq. Nor is Canada’s formal legal sovereignty in question or at issue. Rather, the point about choices is to ask: what are the aims of asserting Canadian sovereignty in international relations and in affected domestic policy areas? And in the continental context: what are the purposes of pursuing closer collaboration with North American partners, or alternatively, more autonomy and an accentuation of differences?

In the Committee’s view, there remains a need to define more clearly where Canada’s national public interests lie in regard to North American objectives, and having done that, to be prepared to pay for what we say we want. In our view also, it is important not to limit unduly our choices of North American policies by prejudging them either on grounds of ideology or misplaced symbolism. Options need to be examined on their merits. Reg Whitaker, although a noted sceptic of pursuing a big “strategic bargain” with the United States, made a telling point in this regard when he stated:

… national sovereignty should not be understood as an end or objective in itself. Sovereignty should be a means to an end, which is a better life for Canadians. Limitations on sovereignty that serve this end should not be rejected for nationalistic reasons. Ideas like a customs union, common market, or other structural frameworks for North American integration might indeed serve that end of a better life for Canadians. The benefits, of course, have to be carefully assessed and balanced against the loss of sovereignty that would be entailed. But such big ideas are legitimately on the table for debate.⁷⁰

The first choice to make, however, is how much priority to give to developing and managing our North American relationships. That choice concerns, above all, our relationship with our most important bilateral partner, the United States. But it also includes our relations with Mexico (and perhaps beyond that with the Americas, as a bridge linking our North American to our hemispheric policy interests). While Canada should maintain its own global perspective and seek diversified opportunities,⁷¹ we cannot afford the luxury of imagining ourselves to be isolated from a North American destiny, unless we are prepared to ignore geo-economic realities and pay almost any price. The Committee believes the Government should therefore explicitly affirm North American relations as a top priority.

At the same time, there is nothing manifest about this destiny that determines it must be on U.S. terms. To the contrary, the Committee is concerned about what will happen if Canada does not move vigorously to assert its own continental vision and agenda. The danger is that, despite the shock of September 11, we could fall back into drifting along until forced again into a defensive, reactive mode. The result of that would likely be a weaker international position for Canada, not a stronger or more autonomous one.

Given the overarching issues that have been raised, the Committee urges the Government in the following series of recommendations to take the initiative in promoting a Canadian national-interest agenda for our North American relations. Moreover, in approaching such a Canadian policy agenda, we agree with Daniel Schwanen of the Institute for Research on Public Policy, that for a functional level of integration and political cooperation serves Canadian interests to be achieved, there is no reason to assume common or harmonized policies are inevitable, necessary, or even desirable. Indeed, much can be accomplished through mutual agreements designed to facilitate shared objectives and build confidence — as in the “smart border” initiatives Canada is already pursuing with the United States. But beyond that, as he put it well:

… Canada requires a global strategy relating to the future of North American relations. We cannot simply limit ourselves to a day-to-day approach and an ad hoc response to whatever crisis may arise. I have every reason to believe that we will have to invent our own integration model, a model that is peculiar to Canada and the United States, and perhaps Mexico as well, as we have already done in the case of trade relations, rather than importing a European model or rallying around concepts such as a monetary or customs union, for want of a better solution.⁷²

The Committee believes it is clearly time to devote serious attention to elaborating such a North American strategy.

Recommendation 1

The Government of Canada should explicitly make Canada’s relations with its North American partners an overall policy priority. In that regard, and particularly in terms of defining the North American dimension of Canadian foreign policy, the Government should elaborate a coherent public strategy for advancing Canadian interests and values in the context of North America, including Mexico, beginning with its comprehensive response to the recommendations in this report.

A second point that emerges strongly from the Committee’s study is that capabilities — adequately resourced and coordinated policy instruments — are needed in order to follow through and effectively implement the choices arrived at through strategic policy development and public deliberation. Only on that basis can we expect Canadian approaches to be taken seriously by our American and Mexican partners. In our preliminary report of December 2001, we cited then-Foreign Minister John Manley’s acknowledgement that Canada has allowed its international policy capabilities to decline. Those were choices Canada made; we cannot blame others for them. Although the Government has increased security-related spending in response to September 11, that assessment remains apt a year later, and Mr. Manley is now in the key position of Finance Minister and Deputy Prime Minister.

As important as sufficient resources is leadership in coordinating the various actors, policy elements and mechanisms that must be involved in managing an increasingly complex North American relationship. Here, too, deficiencies abound; a case in point is the longstanding border problems, which received at best intermittent political attention prior to September 11. As David Zussman told the Committee: “One of the things we learned at our borders conference is that the large number of federal departments and agencies, as well as provincial organizations with an interest in border and Canada-U.S. relations issues, makes it difficult for the federal government to develop a consistent response and consistent strategy. Our governmental machinery is outmoded and not working as well as it might.”⁷³ Veteran Canadian-American relations scholar Stephen Clarkson has argued that Canadian diplomacy in Washington “practises the ad hoc, reactive, crisis-management techniques it had worked out before free-trade times,” and that Canada’s federal government has not yet developed “a capacity to deal with Canada’s multifaceted American relationship in an institutionally coordinated manner.”⁷⁴

Matters may not be as problematic as such observations suggest. But the Committee believes they point to factors that could inhibit the assertion of the strong and credible Canadian policy framework towards North America that our first recommendation calls for. Budgetary constraints over the past decade have affected Canadian foreign policy capacities, and there is a need for reinvestment. Responsibilities for key North American issues are divided among ministers, departments, and agencies. In the case of current Canada-U.S. relations, the Deputy Prime Minister has retained certain responsibilities in the area of cross-border security that might normally be those of the Minister of Foreign Affairs. The Department of Foreign Affairs and International Trade (DFAIT) has established a North American Bureau, but it is Industry Canada’s deputy minister who chairs the North American Linkages project of the government-wide Policy Research Initiative. And so on. The point is not to question the different roles that are being performed as circumstances may warrant; rather, it is to underline the need for both adequate resources to do the job and adequate means of coordinating these policy efforts across the government.

In the Committee’s view, DFAIT must also be in a position to contribute leadership in developing a strategic vision for the North American dimension of Canada’s international relations. That role should also be pursued within a more coherent overall approach by the Government to the totality of our North American relations, given how crucial these are to Canada’s domestic security and prosperity, as well as to our place in the world. Coherence and coordination in this regard might be strengthened through inter-departmental and inter-agency mechanisms. But more than bureaucratic attention is needed. Ministerial leadership is required to be exercised, both through DFAIT and collectively at the Cabinet level.

Recommendation 2

The Government should address Canada’s diminished international policy capabilities in the next and future budgets, ensuring that sufficient resources are provided to allow the Department of Foreign Affairs and International Trade to provide leadership in developing and implementing a strong, credible, strategic framework for Canada’s relations with its North American partners.

Recommendation 3

The Government should also ensure that there is coherence and coordination among all federal activities in which significant North American relationships are involved. To that end, consideration could be given to creating a special Cabinet Committee on North American Relations. Such a high-level committee could be co-chaired by the Deputy Prime Minister and the Minister of Foreign Affairs and could include other ministers with important responsibilities that relate to North American issues.

A third and final point is that the federal government cannot do this alone. Of course some elements of building a better North American partnership require the willing engagement of Canada’s American and Mexican partners. That is probably more difficult to achieve with a United States preoccupied by issues of “homeland” security; moreover, as witnesses such as Stephen Blank emphasized to the Committee, such engagement needs to reach beyond the U.S. capital to all parts of the American political system if it is to be effective. It is not just a matter of having the right ideas, even assuming we can be confident about what those are (and we have suggested that, for example, a sweeping continental “strategic bargain” should be approached with prudent caution requiring further study and debate). Indeed, the point was made by Danielle Goldfarb of the C.D. Howe Institute that “a great vision, a great framework, no matter how interesting, proactive, or beneficial to Canada, will effectively go nowhere in terms of the Canada-U.S. relationship if we are not able to engage the Americans.”⁷⁵ We will have more to say on this in Chapter 5.

What is just as important to underline at this stage is that any framework for North American relations worth pursuing will also go nowhere, and deserve that fate, unless it engages Canadians first. Such a framework or strategic vision should seek to reflect a substantial national consensus on how best to both protect and promote Canadian interests and values through relations with our North American partners. Building that consensus may be difficult, but it is a necessary task that should be initiated and led by government rather than left to the private sector and non-governmental groups. One way to begin the process might be to convene a national roundtable (and perhaps also regional roundtables) on North American relations following the release of a public strategy paper. Such a process could be carried on and refined as warranted in response to evolving circumstances.

In addition, the design and implementation of a Canadian framework should take into account the interests of non-federal levels of government (provinces, territories, and municipalities), which are increasingly involved in and affected by important aspects of North American relations. While respecting both the particular role of the federal government in foreign policy and the constitutional responsibilities of other levels of government, consideration could be given to involving all levels of government in cooperative working arrangements aimed at strengthening policy development and implementation in regard to Canada’s relations with its North American partners.

The crucial task, in the Committee’s view, is to think about ongoing collective processes that will encourage a focus on Canada’s objectives in North America, and on the best means for governmental representatives to achieve them, in the long-term interest of all Canadians.

Recommendation 4

In order to encourage further public engagement focused on Canadian objectives in North America, the Government should consider convening national and/or regional roundtables on North American relations following the public release of an initial policy statement. Such a consensus-building process should be carried on as warranted by evolving circumstances.

Recommendation 5

Given the increasing involvement of non-federal actors in many aspects of North American relations, the Government should consider how best to take into account the interests of other levels of government — on a cooperative basis and through an established process of consultation with provinces, territories, and municipalities — within an evolving Canadian strategic policy framework for advancing these relations.