Prepared remarks

Canadian Consul General Roy Norton to WisPolitics
Madison Club, Madison, WI
Wednesday, June 25, 2014, 12:00-1:30

Thanks to WisPolitics & especially President Jeff Mayers, to WisBusiness, the Wisconsin Economic Development Corporation, WI Manufacturers and Commerce, API-Wisconsin, Enbridge, & the Madison Club.
If you follow our Consulate on Twitter (@CanadaCGChicago) or me (@RoyNorton1), you’ve come here today to hear about the economic relationship that Wisconsin and Canada enjoy, with particular reference to agriculture and energy. I thank you for doing so. While Canada may not be top-of-mind in Wisconsin, actually there’s a lot to talk about.

This is my fourth visit to Wisconsin – and my second to Madison – since becoming Consul General of Canada – on St. Patrick’s Day! Your state is important to my country; I intend to come back with regularity.

This morning, I called on the Lieutenant Governor. It was the first time we had met. I then called on the Governor – whom I’ve met on several occasions – but only in the context of bigger meetings, like the Council of Great Lakes Governors this April in Chicago, or the National Governors’ Association summer meeting, last August in Milwaukee. This afternoon, I’ll see Dr. Cross, President of the University of Wisconsin system, Jim Holte, President of the Wisconsin Farm Bureau Federation, and Secretary Brancel.

During my visit in May to Madison, I called on Secretary Hall, spoke here in this building to a luncheon organized by Wisconsin Manufacturers and Commerce, Dr. Podesta, Provost (International) at the University of Wisconsin – who was joined on the occasion by several Canadians who are professors at the university – and had other meetings as well.

I’ve called on Mayor Barrett in Milwaukee, Mayor Dickert in Racine, visited the Milwaukee Water Council – which just this week announced a new intake to their incubator – of the seven companies welcomed, only one comes from outside the USA – WaterHub of Toronto. I’ve met with the Mid-west Energy Research Consortium in Milwaukee, called on the Chancellor of the University of Wisconsin-Milwaukee, and visited with major firms like Joy Global and Rockwell Automation – that that have very substantial sales into the oilsands of northern Alberta – sales that support lots of good jobs in Wisconsin. And in Sturtevant, I toured Bombardier Recreation Products – the old Johnson Motors, rescued by an iconic Canadian company.

On two separate visits to Milwaukee, I’ve had meetings with your senior U.S. Senator, Ron Johnson, and with the Representative for the 4th District, Gwen Moore. Just last week in Washington, D.C., I had meetings with Senator Baldwin, Representative Duffy, and with senior staff to Representative Ribble (we made the mistake, in retrospect, of scheduling our meeting before Majority Leader Cantor had his primary – it coincided with the vote at which Mr. Ribble and his colleagues were selecting new leadership).

In sum, I’m trying, methodically, to gain a real understanding of this state and how we, Canada, can work with political, business, labor, academic, cultural, and environmental leaders here to build and grow our shared interests.

And lest you think it’s all work and no play, I’ve been this year to one Brewers’ Game (and hope to go to others). I’ll be in Lambeau Field on September 14 to see the Packers beat the Jets. And I’ll be in Madison on November 15, to see the Badgers beat the Cornhuskers.

I also pledge to get beyond Madison and Milwaukee. It’s my firm commitment, during my first year, to call on folks in Wausau, Eau Claire, La Crosse, Appleton, Oshkosh, and other communities where I believe there might be interest in hearing more from the representative of Wisconsin’s best customer, and the USA’s best friend, closest ally, and energy partner.

Let’s turn, briefly, to the two-way trade relationship. Last year, it reached $11.7 billion, with Wisconsin enjoying a significant surplus in its trade with Canada – $4.2 billion, in fact.

One-third of your state’s exports to the entire world are bought by Canadians –more than you sell to your next six most important country destinations put together.

Those six countries, by the way, are Mexico, China, Japan, Germany, the UK, and Australia. The combined population of those six countries is 1.8 billion. Canada’s population is 35 million.

This gets fun when you consider per capita purchases of Wisconsin exports. Every Canadian buys, on average, $214.20 worth of Wisconsin-made goods and services. The 1.8 billion people of your six next best customers each buy, on average, $4.02 worth of Wisconsin exports. We are really good customers for Wisconsin businesses and workers. Part of our job at the Canadian Consulate General is to ensure that we grow that trade – and that there are fewer barriers to it.

By our calculation, 144,900 jobs in the State of Wisconsin depend on trade with Canada. That’s 5% of your workforce. Another 14,100 Wisconsinites work at firms, in the state, that are owned by Canadians. It’s a strong, heavily integrated trade and investment relationship – one from which we all benefit.

Agriculture trade is an important subset of our total trade – representing about 15% of all the business we do with one another. And Wisconsin enjoys a significant agricultural trade surplus with Canada as well; last year, it was more than $600 million dollars.

In 2013, we bought more than 45% – almost half – of all Wisconsin’s agricultural exports to the world. Your next best customer, Mexico, bought 9% of your total agricultural exports.

Given the disproportionate size and importance of the Canadian market to your state, we look to Wisconsin to support ending or amending Country of Origin Labelling to bring the United States into compliance with your legal obligations to Canada. I’ve raised this issue in meetings with federal legislators; I’ll do so this afternoon with the Farm Bureau and with Secretary Brancel.

The bottom line: since COOL came into effect in 2009, Canada has lost more than $1 billion each year of sales of cattle and hogs to the U.S. The World Trade Organization has twice found the USA to be acting illegally. The renewed Farm Bill, earlier this year, afforded the perfect opportunity for your country to fix this egregious trade barrier. But it didn’t happen.

We’ve brought another case to the WTO; it likely will be adjudicated later this year. If the US is again found to be breaching your trade obligations to Canada, and if you continue to fail to address the issue, our government has made clear we’ll have no choice but to implement tariffs on an equivalent value of principally U.S. agricultural exports to my country. We’ve identified a preliminary list; it includes 30 commodities bought from Wisconsin, to a maximum dollar value of $436 million – or 35% of your agricultural exports to Canada.

Now, we won’t do all of that; the retaliation list is much larger than the tariffs we ultimately would impose. And we don’t want to do this at all. But countries like mine don’t have many alternatives when, year after year, the USA simply ignores its legal obligations. We profoundly hope that responsible leaders will step up and address this problem soon. I’ll be happy to discuss the matter more during questions if any of you are interested.

Let’s turn to the energy relationship – where some things are going very well, and other things could stand to improve.

I travelled in mid-June to northern Manitoba, to visit existing and proposed new Manitoba Hydro dams. Manitoba Hydro already produces approximately 10 times the total hydro-electric output of the state of Wisconsin. Kettle – one dam we visited, by itself produces more than twice Wisconsin’s total output.

The Chairperson of your Public Service Commission, Phil Montgomery, was on that mission. So was Chairman Kuglitsch, of the House Energy Committee. I think they and the other officials on the fact-finding trip were impressed by the potential to import clean, reliable and affordable hydro-electric power from Manitoba. Indeed, your state has contracted to buy 108MW of power annually starting in 2016, and 308MW starting in 2027. Importing renewable electric power from Canada can help Wisconsin meet its requirements – both for more electricity and for more non-polluting electricity. Changes to Wisconsin’s laws make that transaction with Manitoba more viable. It’s truly a win for everyone.

Likewise, there was good news when Enbridge announced major upgrades to its pipeline system – and was given authorization by the State Department to proceed. We’re talking here about almost $600 million in spending by Enbridge in the State of Wisconsin. Good, well-paying energy sector jobs will be created – overwhelmingly for union labor. And the project for generate more than $20 million annually in property tax revenues.

In an increasingly uncertain time, the mid-west will enjoy increased supplies of petroleum from Canada.

Since between 85 and 90 cents of every dollar of oil your country buys from Canada reverts to the US in terms of Canadian purchases of goods, services, and technology from this country, that’s a good thing.

The proposed Keystone XL Pipeline, by contrast, continues to encounter difficulties. It’s now been reviewed for longer than it took the United States of America to win World Wars I and II put together. We respect your processes, of course. But we do hope that a decision might come soon. And we dare to hope that the decision will align with the highly rational case that has been made for KXL.

The oil sands of northern Alberta are the world’s third largest reserves of petroleum, and the only significant reserves remaining in the world that aren’t controlled by governments often unfriendly to the U.S. and Canada. The entire Alberta oil sands production emits only two-thirds the Green House Gases that are emitted by coal-fired electricity generation just in the state of Wisconsin.

This is not to attack coal. It’s to put the Keystone debate in perspective. Can you imagine if the tens – maybe hundreds of millions of dollars – that have been spent by extremists and zealots to vilify the Alberta oil sands and KXL were directed against coal-fired electricity generation just in the state of Wisconsin?

Canada takes the environment seriously. We consider ourselves at least the equal of the USA in that regard. Both our countries follow practices much more respectful of the environment than do many of our trade competitors.

The President has declared that greenhouse gas emissions from U.S. coal-fired electricity generation must decline by 30% by 2030. That’s a plan. Of course, it’s subject to legal challenge. For that matter, attaining the goal will be subject to the policies of successor administrations.

In Canada, we’ve legislated a 46% reduction in GHGs from coal-fired plants by 2030. 46%, compared to the USA’s 30%. And in 2030, after the President’s mandate has been achieved, your country will still emit more than 20 times the GHGs from coal-fired electricity generation that Canada will. Yes, you heard me correctly – more than 20 times! The Canadian economy, by the way, is about one-tenth the size of the USA’s.

The boutique debate about KXL is puzzling to Canadians. Your officials told us during the NAFTA negotiations that you wanted guaranteed access to our oil. You were concerned then about the Middle East; about relying on petroleum from regimes hostile to U.S. interests.

Dare I ask what has changed? In good faith, we’ve developed our industry to, almost exclusively, sell the energy to you. Because you told us you wanted it. And we now supply fully a third of the USA’s petroleum imports.

No one in Canada is asking you to guarantee that you’ll buy our oil when you no longer need imported oil. What we can’t comprehend is why you would prefer to buy it from Venezuela. Or Iraq. Or Saudi Arabia.

Warren Buffet, the CEO of Berkshire-Hathaway (and owner of BNSF – which is profiting from the exponential increase in shipment of oil by rail) spoke two weeks ago to the Edison Electric Institute, the largest U.S. electricity association. He pointed out the twin challenges faced by the United States – that you will keep using fossil fuel for decades while, at the same time, you need to get carbon emissions under control. On KXL, he said the following:

“I’m very happy (that) Canada has tremendous reserves. I’d rather be in our hemisphere than in a hemisphere with an unfriendly government. I’m for the pipeline. I have no problem with that at all.” He added: “we’ve got problems with carbon, and we have to address them. (But) the idea that you would take a wonderful, friendly country that one way or another is going to sell the oil it develops and, in effect, snub them, I don’t think it makes any sense.”

Let’s move on from energy. I’m also happy to return to it during questions if you’d like.

One final issue. A bridge. I’ll deal with it very quickly.

I’m not talking about a bridge from Thunder Bay, Ontario, to Superior, WI – although, I confess, I tried that one on my Transportation Department. Understandably, they’re pretty much at their limit when it comes to giving free bridges to the USA.

In my conversations with Wisconsin’s federal legislators, I’ve pointed out that the majority of your state’s exports to my country cross an 85-year-old bridge at Detroit. A bridge that was built to last 50 years. And for which there’s currently no alternative in place.

This is a recipe for disaster. Perhaps 75,000 Wisconsin jobs depend on everything working, just right, every day, at the current bridge. Upwards of 2 million U.S. jobs would be in jeopardy if the existing bridge were to fail without a new one in place.

Ever since 9/11, Canada’s # 1 national infrastructure priority has been the construction of a new bridge between Detroit and Windsor. When it became evident that Michigan could not see its way clear to assume its share of the responsibility, my country agreed to pay the costs that would have been Michigan’s. That’s more than a billion dollars – including $550 million for infrastructure on the Michigan side of the Detroit River to connect the new bridge to I-94 and I-75.

The bridge, by the way, will be built only of U.S. & Canadian steel. Literally tens of thousands of jobs will be created, in the U.S. alone, during the period of its construction.

One piece of this $4 billion project remains: funding for the U.S. Customs Plaza. These don’t come cheap; the cost will be in the range of $250 million. But that’s only 5%, or so, of the total cost of the project – with Canada assuming the other 95%.

Wisconsin Manufacturers and Commerce has agreed to sign on to a letter, being generated by Chambers across the region, asking the Administration to proceed, with urgency, to fund the new plaza. We are grateful to WMC for their leadership. And we pray that the US Government will be responsive.

This is another subject on which I’d be happy to take questions. For that matter, I’m now yours. Whatever is on your mind – please feel free to fire away.

Thank you for your attentiveness. I’ve covered a lot of ground, describing what is a complex, but very rich, and mutually advantageous relationship between my country and your state. Any questions?