Canada’s American Problem: It’s Really No Problem At All

Ag-Policy-Wars1      In the 28 years that I have written this column I’ve had many opportunities to criticize our American friends.  In my younger days, it was fairly blunt and I suppose somewhat naïve.  There is a segment of Canadian society that likes to take shots at Americans and you can always get applause from that segment before any audience across this country.  However, as I’ve grown older, my view has matured as I always refer to our neighbors to the south as our American friends.  Simply put as a country, Canada has really benefited from our perch north of the richest economy in the world.

It is certainly benefited Canadian agriculture.  For instance at the present time the US economy is starting to grow significantly, with many economic indicators turning very positive.  This is especially true versus the rest of the world and it is certainly showing up in the US dollar index rising significantly.  At the same time our Canadian dollar is now below $.90 US, which is like added testosterone to the Canadian agricultural economy.

The Canadian American relationship is between friends.  In the United States it is mainly ignored.  Its very rare to see any American commentary about Canada and especially rare to see any American commentary about anything in Canadian agriculture.  On the other hand in Canada we are always looking south and with our population strung out along the American border it is almost a continual navel gaze with our American friends.  Just this morning I was discussing buying parts for drainage equipment in the United States.  We take it for granted.  It is just the way it is.

On the other hand it is not unusual to drive a couple hours from the US Canadian border and run into Americans who’ve never been to Canada and have no intention of going.  That is not a particularly bad thing, it is just that Canadians find it so unusual.  What is even more unusual is when our American friends actually think they might need us.  A great example of that happened last week with the story coming out of North Dakota.

Last week a North Dakota Congressman, Kevin Cramer  called on the Canadian government to let the grain shipment performance mandates that we are imposing on rail companies permanently expire.  He had written letters to the Canadian ambassador as well as US Sec. of Agriculture.  His concern was that the fines threatened against Canadian railways not delivering Canadian grain would impact American producers in North Dakota.

This is a direct quote from Congressman Cramer.

“I respect the fact that you want to protect your (Canadian) domestic and international patrons. Your customers are also our customers. But, the nexus between your performance mandates, and their implicit encouragement for CP and CN to provide less service to the United States, in my opinion provides a solid foundation for a successful trade violation claim.”   Unquote

My first inclination when I read that was complete surprise.  It is rare to see an American politician care about Canada and its certainly even more rare to accuse us of deliberately hurting American well-being.  However, it was also very telling because as all Canadians know we don’t win trade wars with our American friends.  Our choices are always limited to WTO and worse.  Even if we win, we still lose because successive American governments do what they want anyway.  So what do we do in this situation?  It’s pretty obvious that the Canadian policy putting shipping mandates for Canadian grain on Canadian railroads is fickle at best.  With the Americans applying pressure, is probably doomed to fail.

Of course it is a Western Canadian issue as I cannot think of a similar type example in Eastern Canada.  For instance in southwestern Ontario where I am from we grow 10000 acres of sugar beets, but do not process one beet in Canada.   They all go to Michigan for only one reason and that is that the Americans have a sugar policy and we don’t.  So we piggyback onto their policy, foreigners directly benefiting from a US trade policy.  This latest example of US politicians complaining about us is a Canadian policy hurting them directly.  It’s a rarity, and you can bet, it will disappear to the surprise of nobody in Canadian government circles.

Is it fair?  No way, but when you are Canada in North America, the drill is to defer to our American friends because there isn’t a lot of other good choices.  We don’t win trade disagreements, even when we win them at WTO.  American power is just too great.

There is also much to lose too, which is ultimately the litmus test.  Most times, American apathy toward Canada is beneficial to us.  This time when Canadian railways aren’t servicing American customers, with record low basis levels, its turned into something else.  From a Canadian perspective, it needs to disappear.  Our own government might make that happen, throwing out mandates, not going through with fines for not moving Canadian grain.  It is our natural path when trouble arises with our American friends.  I don’t ever see it changing.