It may be the world’s longest, undefended border, but the dividing line between Canada and the United States is costing Stephen Peel’s company big money.
Border delays are tangling up shipments of goods and are slowing down service technicians who travel to the U.S. to maintain the machinery produced by Ironside Design Manufacturing.
Located just 30 minutes from the border in Chilliwack, B.C., the company’s customer base is 80 per cent American. It hasn’t been a problem until recently, said Peel.
“Right now it is probably easier to get our service techs into Russia or China or Poland than it is to get through the Sumas border 20 minutes down the road,” he said.
Meanwhile, product delays are adding 10 to 15 per cent to the cost of the product, according to Peel.
It is those costs the Beyond the Border deal unveiled on Wednesday by Prime Minister Stephen Harper and U.S. President Barack Obama are supposed to eliminate by facilitating faster border crossing for people and goods, and tightening it against security threats.
Despite the stated purposes of the deal, it is unclear just how much faster trade will flow and whether it will be worth the extra security measures.
“We are talking about marginal improvements at the border for what could be major changes or expansions on the amount or type of information shared,” said Stuart Trew of the Council of Canadians.
Beyond the Border is the biggest cross-border deal since the North American Free Trade Agreement and comes after nearly a year of negotiations on how to balance the $500 billion in two-way trade with security in a post 9/11 world.
Saving time and money
The deal strikes the right balance for business, said Jayson Myers, president and CEO of Canadian Manufacturers and Exporters.
“Our vision is there shouldn’t be any delay at the border for those (trusted) trucks or those people at all,” he said. “If anything there should just be a rolling stop through the screening technologies that are going to be put there.”
The new deal promises to move border crossing in that direction by introducing a series of pilot projects, harmonizing regulations and adopting a screen once, accept twice policy. The policy means goods would only be inspected at the point of entry, not at the borders.
Other efficiencies include harmonizing the data companies need to submit on both sides of the border, testing pre-inspection programs, expanding trusted traveller programs and creating a one-stop website to submit paperwork to multiple government departments.
Myers said the deal will help companies like Ironside expedite border crossing by ensuring the right information gets to the right person at the same time, saving the Canadian economy at least part of the $16-billion annual pricetag of border delays.
Regulatory harmonization will also see improvements in trade, according to Myers.
Rules requiring things like different packaging now cost the Canadian economy up to $50 billion a year.
Streamlining may seem like a no-brainer, but Trew said there may a big hidden cost - a race to the bottom on regulations on everything from food to drugs to vehicles.
Benefits don't justify costs: advocates
The price of thinning trade included surrendering more information about travellers to both governments, a trade some aren't convinced is fair.
“It is an imbalanced deal that really isn’t worth it to Canadians,” said Trew.
Canada and the U.S. have agreed to share more information about who is in their respective countries by adopting an entry-exit system, pre-screening for foreign nationals and establishing joint law enforcement teams to police the border.
The Canadian government has promised a joint privacy policy by May, but it still doesn’t know exactly what information will be shared. Once information crosses the border it’s up to the Americans to decide what to do with it. The agreement assures shared information will be in line with national laws and privacy standards, but those laws differ in each country.
Proponents of the deal say focusing border resources on threats allows trusted travellers and trade to move faster.
Trew said he disagrees, “We really kind of reject this idea that civil liberties or privacy can be compromised in any way.”
Micheal Vonn of the B.C. Civil Liberties Association, went a step further saying the deal will make Canadians less secure with no trade benefit.
"We have no notion that it will increase our security. It is alleged. What we have is evidence it will decrease the security of some people,” she said, citing the example of Maher Arar, a Canadian citizen that was tortured in Syrian prison after miscommunication between American and Canadian authorities.
Refocusing efforts to enhance infrastructure, expanding pre-clearance programs, and focusing on evidence-based policing would do more to relieve border congestion and enhance security than broad information-sharing, according to Trew.
Success depends on politics
Canadians won’t know whether the deal will mean more riches or greater security for years. All of it depends on political will, the success of pilot projects, and a looming presidential election.
The deal isn’t legally-binding like a treaty, so success will depend on Harper and Obama’s efforts to meet the specific timelines outlined in the plan.
“There is a lot of work to be done,” Myers said. “We are going to have to make sure governments don’t lose sight of the importance of this and follow through on their commitments.”
The deal does nothing to improve the increasing American protectionism, evidenced by Buy American policies and a $5 entry fee for Canadians, according to Liberal interim leader Bob Rae.
"We still have this overall atmosphere of protectionism in the U.S. I don’t see very much in here that provides a breakthrough with respect to that.”
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