February 28, 2017
Canada and the U.S.: Partners in Prosperity
Remarks by the Honourable Bill Morneau, PC, MP
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It's a real pleasure to be here in New York with you today.
As you may know, only two weeks ago in Washington, I joined Prime Minister Justin Trudeau as he met with President Trump for the first time.
That really set the tone by reminding us all that ours is an historic friendship and partnership that serves as a model for the rest of the world.
We share far more than just the longest international border in the world—clocking in at 5,525 miles (that's just shy of 9,000 kilometres for my fellow Canadians).
Many of us share a similar culture and language.
We've fought together in Europe, in Korea, and most recently in Afghanistan.
We're standing shoulder to shoulder right now in the fight against ISIS.
We've successfully exported the best winter sport on the planet.
We make the music you dance to. We create television shows you binge-watch. We film and star in the movies that make you laugh and cry.
We also take part in many of the cultural traditions of Americans.
Two nights ago we did the same as millions of Americans—we watched the Oscars.
When we tune in, however, it's for two reasons. We want to see who won, just like everyone else.
But we also watch for talented people like Denis Villeneuve and Ryan Gosling—because on that night, they play for Team Canada.
And we may be humble and we may be polite, but we never miss an opportunity to cheer for Team Canada.
As I said, our two countries share a special relationship that is truly unique in the world.
And that's particularly true when it comes to how we do business with one another.
Because we do a lot of business together. Almost CAN$2.3 billion (US$2 billion) per day, every day, in terms of goods and services trade—even more if you include cross-border investment.
And I can tell you that my business truly was made stronger through this partnership.
Historically, we have helped one another succeed by building on what we share in common.
We want a better life for the middle class on both sides of the border.
We think people who work hard should expect to be able to build a dignified life for themselves and for their families and a brighter future for their children.
That's why a little over a year ago, Canada decided to put the middle class, and people, first.
We have cut taxes for the middle class, and raised them on the wealthiest one per cent.
We made it easier for our young people to get an education by increasing student grants by up to 50 per cent, and told recent graduates that they wouldn't have to pay back their student loans until they are earning at least $25,000 per year.
And with the introduction of a much better-targeted Canada Child Benefit, this year we will see a reduction of about 40 per cent in Canada's overall child poverty rate compared with 2014.
We did all this because we know that when you give people the tools to succeed, that is exactly what they will do.
We live in a time when many people are worried that the current system only benefits society's luckiest few, and their concern is valid.
We worry that our children will not have the same opportunities we had.
I firmly believe that, for both of our countries, the surest way to address this anxiety and keep our middle class strong and prosperous is to further strengthen the close economic and social ties that we've built over the last century and a half.
Canada and the United States enjoy a productive and mutually beneficial trade relationship—which totalled almost CAN$850 billion (US$700 billion) in 2015 alone.
Over the last 10 years, the non-energy trade balance—meaning goods and services excluding oil —has been very favourable to the United States.
That includes surpluses in categories like computers and electronic products, machinery and equipment, and travel services.
Capital flows are balanced too.
To put it simply, we are your biggest and best customer.
We buy more from you than all the members of the European Union combined.
Canada is the most important foreign market for most U.S. states. And it isn't just the states closest to the U.S. border, like Michigan or Vermont, but Alabama, Georgia and Colorado too.
Millions of families in both countries count on the strength of the relationship between Ottawa and Washington, and on a climate of trust and stability in the boardrooms and C-suites of Detroit, Windsor, Calgary, Houston, Montréal and right here in New York.
And Canada, I must say, is doing pretty well.
We've had the best growth in the G7 since the global financial crisis; our gross domestic product (GDP) is 12 per cent higher than it was pre-recession.
We still have the lowest total government net debt-to-GDP ratio of all the countries in the G7.
Canada is expected to have the second fastest growing economy in the G7 this year and next, according to the International Monetary Fund.
We have a highly skilled, diverse and cohesive population; nearly two-thirds of working Canadians have a post-secondary education, and we have the best availability of skilled labour in the G20.
We are one of 10 countries with triple-A ratings from the three major ratings agencies.
As The Economist put it a little while back:
"Canada is in a better position than almost any other rich country to take advantage of low rates: it didn't suffer a big downturn after the financial crisis, and it has a history of fiscal restraint."
To sum up: Canada is a good neighbour to have.
Before I take your questions I want to leave you with something to think about.
I often say that our economies and supply chains are deeply connected, but I want you to consider what this means in practice.
So here is the story about your car's transmission, and how it got to you.
It begins at Metaldyne, St. Cloud, Minnesota, where scrap iron chips are cast—scrap iron chips from Canada.
These materials are then sent back to Linamar, a Canadian auto parts manufacturer based in Guelph, Ontario (560 employees), to be machined and assembled.
Then that part crosses the border for a third time back to the Ford transmission plant in Sterling Heights, Michigan, where it becomes part of a fully assembled transmission.
Then the completed transmission is shipped back to an assembly plant in Oakville, Ontario, Canada where it is put into the vehicle.
Then the assembled vehicle crosses the border for a fifth and final time on its way to a dealership in your neighbourhood.
It's an incredible journey that touches the lives of hundreds of people on both sides of our border.
I feel this example helps to underscore what we try to achieve through trade.
Trade needs to work for people.
Trade needs to bring real benefits to people who may be struggling.
It needs to bring assurance to people who are worried about their children's futures.
Because those same people will support trade if it creates better jobs and makes their lives more affordable.
That's what they expect of us, and I for one fully intend to make sure that we work hard to deliver.
That's why it's so important that we are here in New York.
It's why I will be returning to Washington tomorrow to meet my American counterpart, Treasury Secretary Steven Mnuchin.
And it is why I will continue to promote the importance of Canada to the U.S. economy.
Because we may be polite and we may be humble. But we never miss an opportunity to cheer for Team Canada.