Recently, the Maritimes Energy Association hosted an evening of conversation with Laura Dawson, Director of the Canada Institute at the Wilson Center in Washington, DC. The event was an opportunity to take a peek behind the headlines to get an insiders perspective on the ongoing trilateral NAFTA discussions. With her delightful sense of humour, intelligence, and candor, Laura offered a unique perspective on what really happens behind closed doors and what the business community should be thinking about during the current period of uncertainty. Here’s what we learned.
Are we there yet?
Despite what we’re reading in the media, insiders aren’t convinced NAFTA negotiations will wrap any time soon. While there is an agreement in principle, it’s believed to be in Canada’s best interest to move slowly. A number of distractions are emerging south of the border including the upcoming American congressional midterms in November and the Mexican general election taking place on July 1, which means there will be other political priorities. While there are a number of issues up for discussion during negotiations, energy hasn’t been high on the list of priorities, as it has been regarded as an area that is successfully benefiting everyone at the table. What is clear, however, is that there are directional differences between Canada and the US when it comes to tax reforms, carbon pricing, and building social license.
President Trump has put the brakes on progressive issues like tax policy reform and has opted for harsh “Buy American and Hire American” policies to give the US a competitive advantage. In Canada, the government has been focused on shifting towards a green economy, with the provinces working diligently on plans to implement carbon pricing.
The political and policy differences may prove to be especially challenging for Canada, with energy companies and other large businesses wondering if it will become too costly to sustain their operations in the country.
Canada’s energy super power is diminishing
One point that had audience members leaning in is the notion that Canada’s status as an energy superpower may be diminishing. As a resource-based economy, it’s imperative that we maximize the potential of our resources, like figuring out the most efficient way to move landlocked oil in Alberta and Saskatchewan to the coast so it can transported internationally.
Against a backdrop of regulatory uncertainty, carbon pricing, and a perceived lack of social license, it’s becoming increasingly difficult to attract investment and do business in Canada, making our country a less competitive option than our neighbours to the south.
But it’s not all bad news. Laura believes we have more resiliency in Atlantic Canada than other parts of the country. We are fortunate in our energy diversity with offshore oil and gas, onshore gas potential, tidal, hydro, and wind energy. We are also strategically located, with access to deep, ice free harbors, close proximity to Europe, and have an emerging ocean technology industry focused on maximizing the potential of our waters and shoreline.
Laura did however call on Canadians to be more vocal, and support the ease of movement of goods, services, and people between our borders.
“We need to hear these voices in the real economy, not the pretend economy,” said Laura.
Overall, the decisions being made today will have a significant impact on our ability to move goods and services across borders—a critical component of maintaining a healthy and competitive business climate for Canadian businesses who import and export goods.
Stay tuned for further updates as the NATIONAL public affairs team monitors the progress of the NAFTA negotiations.