WASHINGTON — It’s been less than three years since the U.S.-Mexico-Canada Agreement replaced NAFTA as the law of the land in continental trade, and there are already hints of the existential anxiety that preceded it.
That’s because of the so-called “sunset provision,” a clause that reflects the lingering working-class distrust of globalization in the U.S. that helped Donald Trump get elected president back in 2016.
Article 34.7 of the agreement, the “review and term extension” clause, establishes a 16-year life cycle that requires all three countries to sit down every six years to ensure everyone is still satisfied.
That clock began ticking in the summer of 2020. If it runs out in 2026, it triggers a self-destruct mechanism of sorts, ensuring the agreement — known in Canada as CUSMA — would expire 10 years later without a three-way consensus.
For Canada, the sunset provision “is a minefield,” said Lawrence Herman, an international trade lawyer and public policy expert based in Toronto.
“It is certainly not a rubber-stamping exercise — far from it.”
Of particular concern is the fact that the provision doesn’t spell out in detail what happens if one of the parties indicates that it won’t sign off on extending the deal without significant changes to the terms.
“The concern is that this could mean, in effect, that we’ll be into a major renegotiation of CUSMA in 2026,” by which time the political landscape in both the U.S. and Mexico could look very different, Herman said.
“What happens then? The government and business community need to be thinking about this and start preparing the groundwork and doing contingency planning now.”
The deal as it stands is hardly perfect, if the number of disputes is any indication.
In the 33 months since USMCA went into effect in July 2020, 17 disputes have been launched among the three countries, compared with a total of 77 initiated over the course of NAFTA’s 25-year lifespan.
The U.S. remains unhappy with how Canada has allocated the quotas that give American dairy producers access to markets north of the border. Canada and Mexico both took issue with how the U.S. defined foreign auto content. And Canada and the U.S. oppose Mexico favouring state-owned energy providers.
The Canada-U.S. disputes are likely to be on the agenda when Prime Minister Justin Trudeau sits down later this week in Ottawa with President Joe Biden, his first official visit to Canada since being sworn in two years ago.
“The president’s really excited about doing this, about going up there and really going to Ottawa for no other purpose than the bilateral relationship,” National Security Council spokesman John Kirby told the White House briefing Monday.
Prior meetings between the two have typically been on the margins of international summits or at trilateral gatherings with their Mexican counterpart, Andrés Manuel López Obrador.
Kirby cited climate change, trade, the economy, irregular migration and modernizing the continental defence system known as Norad as just some of “a bunch of things” the two leaders are expected to talk about.
“He has a terrific relationship with Prime Minister Trudeau — warm and friendly and productive.”
Trade disputes notwithstanding, the overwhelming consensus — in Canada, at least — is that USMCA is vastly better than nothing.
“I don’t want to be alarmist about this, but we cannot take renewal for granted,” said Goldy Hyder, president and CEO of the Business Council of Canada, after several days of meetings last week with Capitol Hill lawmakers.
Constantly talking up the vital role bilateral trade plays in the continent’s continued economic health is a cornerstone of Canada’s diplomatic strategy. The message Hyder brought home from D.C.? Don’t stop now.
“We met several senators, we met people from the administration, and their message was, ‘Be down here. Make your case. Continue to remind Americans of the role that Canada has in their economy,'” he said.
“We’ve got to … be a little less humble in the United States and start reminding Americans just how much skin in the game that they have in Canada.”
That can be a challenging domestic political truth in the U.S., where deep-seated resentment over free trade in general and NAFTA in particular metastasized in 2016 and persists to this day.
Biden likes to put a blue-collar, Buy American frame around policy decisions. His original plan to advance electric-vehicle sales saved the richest incentives for vehicles assembled in the U.S. with union labour.
Aggressive lobbying by Canada helped avert a serious crisis for Canada’s auto sector; the Inflation Reduction Act that Biden ultimately signed included EV tax credits for vehicles assembled in North America.
For many, it was a cautionary tale about the importance of arguing Canada’s interests in Washington.
A strong U.S. depends on a strong Canada, said Rob Wildeboer, executive chairman and co-founder of Ontario-based auto parts supplier Martinrea International Inc., who took part in last week’s D.C. meetings.
“The USMCA and the ability to move goods across borders is extremely important to us, it’s extremely important to our industry, it’s extremely important to this country, and it’s a template for the things we can do together with the United States,” Wildeboer said.
“In order for the U.S. to be strong, it needs strong neighbours, and Canada’s right at the top of the list.”
This report by The Canadian Press was first published March 21, 2023.
James McCarten, The Canadian Press
Edmonton triples venture capital investment in 2023
Alberta’s tech sector continues its strong momentum, with Edmonton seeing its strongest growth ever, proof Alberta remains a hot tech market.
As global and national investment have declined, Alberta has remained a strong tech market and is showing continued leadership, as shown by Pitchbook ranking Calgary as the 12th fastest-growing tech ecosystem in the world and LinkedIn ranking Calgary as one of the best places to hire and recruit tech workers.
At the end of 2023, Alberta’s five-year growth rate for venture capital dollars invested reached an impressive 48.5 per cent, more than triple Canada’s compounded average growth rate of 13 per cent, according to the 2023 Canadian Venture Capital Private Equity Association fourth-quarter report.
The province’s growth rate means Alberta finished 2023 with $707 million invested over 86 deals, in line with Alberta’s 2022 record-breaking year. In contrast, Canada ended the year with a 31 per cent decline in investments. Over the past five years, Alberta technology companies have secured more than $2.7 billion in venture capital funding across 350 deals, creating thousands of jobs for Albertans.
“While Canada as a whole saw massive declines, Alberta has held steady. We are a major venture capital player in Canada, as technology drives growth across all sectors.”
Alberta’s two largest cities continued to attract investment dollars in 2023, with Calgary and Edmonton coming in fourth and fifth respectively for number of deals, with $501 million invested in 64 deals in Calgary and $188 million invested in 21 deals in Edmonton. Edmonton saw a 324 per cent increase from $58 million in 2022 to $188 million in 2023. In total, Alberta captured 10.3 per cent of dollars invested in 2023 and 13 per cent of venture capital deals in Canada.
“Edmonton’s tripling of venture capital investment in 2023 underscores our city’s position as a dynamic tech capital within Alberta’s thriving innovation ecosystem, reaffirming our role as a powerhouse driving technological advancement and economic prosperity across diverse sectors. It is the local innovators’ relentless pursuit of solutions to real-world problems, with the continuing support of the Government of Alberta, which not only attracts significant investment but also propels our city to the forefront of Alberta’s tech revolution and fosters job creation for our community.”
“At Platform Calgary we are working with our partners to continue this momentum by linking up high potential tech startups with the investors that can help them take their businesses to the next level. The evidence is clear, Alberta is emerging as one of the most exciting and resilient tech ecosystems in the world. Together with our growing tech community, we can secure Alberta’s position as the best place in the world for anyone to launch and grow a tech business.”
Alberta remains a growing market for the technology and innovation sector, and Alberta’s government celebrates its steady contribution to the Alberta economy, including in the fourth quarter of 2023. The end of last year saw venture capital investments in the province increase by 35 per cent for dollars invested and 19 per cent for deals closed compared with the third quarter. There were 25 deals closed valued at a combined $173 million in the fourth quarter of 2023.
Shining a spotlight on Alberta athletes, sport leaders
Alberta’s government is continuing to support the Alberta Sports Hall of Fame, so it can showcase the province’s sport legacy for years to come.
The Alberta Sports Hall of Fame celebrates the accomplishments of more than 1,600 Albertans, from Olympic gold medallists to community sport leaders. To continue supporting this long-standing legacy, the government is providing $302,500 to the Alberta Sports Hall of Fame Museum. This funding will support the operations of the facility and the organization’s management and delivery of the annual Alberta Sport Recognition Awards.
“Alberta’s future is stronger when we understand and preserve our history and celebrate our successes. Places like the Alberta Sports Hall of Fame help us do just that. I’m proud our government is supporting it, as it spotlights Albertans with incredible athletic achievements and community contributions.”
“The Alberta Sports Hall of Fame has long been a cherished attraction in our community, offering Albertans inspiration and a window into the remarkable legacy of our athletes and community sport leaders. With our government’s investment in this institution, Red Deer’s tourism will undoubtedly grow, bringing significant benefits to our community and surrounding areas.”
“I am pleased to see the government’s support for the Alberta Sports Hall of Fame continue. This organization enriches the sport community in central Alberta, inspires the next generation of athletes and preserves our province’s history in sport excellence.”
The Hall of Fame provides a space where the accomplishments of the sport community in Alberta are preserved and inspires the province’s future athletes and community leaders. Albertans recognized in the Hall of Fame include Melody Davidson, who was inducted in 2008 for her excellence in hockey, serving as a two-time Olympic gold medal-winning head coach for Team Canada women’s hockey, and Lanny McDonald, who was inducted in 1993 following a long and successful career in professional hockey. Last year, 12 inductees were nominated, including Patrick Jarvis and Theresa Maxwell for their success in Paralympics and volleyball.
This funding will ensure that Albertans can continue to celebrate the province’s turning-point moments and growing legacy in sport.
“We are grateful for the support we have received from the Alberta government. Their funding has played a pivotal role in sustaining the Alberta Sports Hall of Fame, allowing us to preserve and celebrate the rich sporting history of our province. This support not only enhances our ability to showcase the achievements of the athletes, teams and sport champions but also reinforces the significant role sport plays in our community.”
“Red Deer proudly stands as a hub for sports excellence, and the Alberta Sports Hall of Fame plays a pivotal role in preserving and promoting our province’s rich athletic legacy. The City of Red Deer is grateful for the Alberta government’s continued support, ensuring that this institution continues to inspire future generations by showcasing the remarkable achievements of our athletes and community leaders.”
The Alberta Sports Hall of Fame helps grow tourism in Red Deer and the surrounding area by attracting visitors to the facility to enjoy interactive sport-oriented games and activities and sport memorabilia. In the past two years, an estimated 20,000 people have visited the Hall of Fame annually. Exhibits on different sports and sport organizations, including the Hall of Fame Gallery that showcases the athletes and sport builders who have been inducted annually since 1957, are also available to view.
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