With the swearing in of President Joe Biden last month, the impact of the new administration on Canadian business quickly became a key area of interest and focus. When President Biden cancelled the Keystone XL pipeline, the general enthusiasm by Canadians for a change of administration was quickly tempered, with questions abounding about what this will mean for bi-lateral trade. More recent conversations about “Buy American” provisions are coming into the spotlight, as Canadian political actors and businesses position themselves for success in a new political era.
In the second installment in our series on the perspective of Ontario’s Agents Generals on the new political era in the United States, we turn to Ontario’s Agent General in Chicago, Earl Provost. In addition to responsibility for Illinois, Mr. Provost has responsibility for Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Ohio, Wisconsin. Prior to his appointment in 2019, Mr. Provost served as Executive Director of the Ontario Liberal Party, as well as Chief of Staff to Toronto Mayor Rob Ford. More broadly he has over two decades of political experience in Toronto, at Queen’s Park, and in Ottawa that he is putting to use in his role as Agent General.
In his remarks, Mr. Provost emphasizes publicly policy decisions by the Ontario government which will support a broadening a trade with the United States, including the creation of a new investment attraction agency, Invest Ontario. He also emphasizes the role of the Ontario Investment and Trade office is supporting Ontario businesses as they look to expand to the US.
With the transition of power to the Biden administration, what do you think this will mean for trade between Ontario and the United States?
This is a critically important trading relationship that supports millions of jobs on both sides of the border and is worth approximately $400 billion CAD annually. If Ontario were a country, we would be the United States’ third largest trading partner. Ensuring strong trade ties is vital to the businesses and communities these trade relationships support, particularly as our economies recover from the COVID-19 pandemic.
There will no doubt be changes in policy and style. It is important to identify those changes quickly and plan a strategy to respond to those changes. Ontario needs to be proactive at the state level as well as dealing with the new Biden Administration. The key for the Ontario Trade and Investment Offices is to supplement the efforts of other Ontario stakeholders and the Canadian Government. These offices are uniquely situated to provide strategic advice and political intelligence in local markets. We must remain vigilant in maintaining strong political and economic relationships with the United States. Ontario is ready.
How can Ontario businesses better position themselves for increased trade with our neighbours to the south? Which industries or sectors stand to benefit the most in the years ahead?
We cannot take these important relationships for granted. That is why Ontario is also taking a proactive approach by pursuing Strategic Investment and Procurement Agreements (SIPAs) with U.S. states, most recently Maryland, to make it easier for businesses in the Ontario and in the United States to work together. The new agreement between Ontario and Maryland will increase trade, attract investment, and encourage job creation in both jurisdictions. The agreement is a platform on which to build on the relationship that has been developed over decades of engagement across the U.S.-Canada border.
We are also creating a new investment attraction agency, Invest Ontario, to help position businesses investing in Ontario for growth in the highly competitive global marketplace. It will provide high-value investors with customized tools and services to support their investments in Ontario and focus on securing investments in three key areas where Ontario already has many competitive advantages: technology, advanced manufacturing and life sciences.
It is also important for Ontario businesses and stakeholders looking to do business in the United States to use all available resources. To be blunt, the Ontario Trade and Investment Offices should be one of the first points of contact any Ontario business or stakeholder should make when looking to position themselves for increased trade with the United States.
How significantly does the pandemic/closed land border continue to weigh on the trade relationship?
During this time of economic uncertainty due to the impact of COVID, there is no reason why we can’t continue to unlock opportunities we can all benefit from and get ready for better times ahead. Thankfully, Ontario and the United States already have a strong partnership, one that has led to economic growth, productivity, and good-paying jobs on both sides of the border.
Even throughout this difficult time, the strength of the Ontario-U.S. trading relationship has prevailed. Ontario and the U.S. have remained steadfast partners, with the equivalent of CAD$981.8 million (US$731.5 million) in merchandise trade per day still crossing our border since the start of 2020.
Ontario has managed to keep supply chains and the flow of goods moving across the Ontario-U.S. border. This is due in large part to the strong working relationship between Ontario and Canadian Government. Ontario has worked collaboratively with other governments and stakeholders to make certain goods have continued to move across the border, keeping food on our tables and make certain store shelves are stocked.
During these times of crisis, open trade and access to markets will help make certain the Ontario-U.S. economies make a speedy recovery.
What kind of signals will you be watching for in the early days of the Biden administration? Are you concerned with a “Buy America” culture continuing or even expanding under this administration?
The U.S. Chamber of Commerce has been clear that “doubling down on already rigorous “Buy American” rules could drive up the cost of government projects, undermining their potential to create jobs and spur economic growth.” Buy American policies disrupt existing Ontario-U.S. cross-border supply chains and erode the deep and long-standing relationships we have built over the years.
Our government will continue to call on our federal government to ensure Canada is exempt from any Buy American provisions, and instead advocate for a “Buy North American” approach. We will continue to highlight the costs of Buy American measures to businesses on both sides of the border and work tirelessly to ensure a stable and competitive business environment that creates jobs, opportunity, and growth.
Premier Ford has shown great leadership in establishing new Ontario Trade and Investment Offices in Chicago and Dallas. As the Ontario Agent-General in Chicago, I am able to further enhance Ontario’s strong position and establish deeper local political and business relationships. This local presence and on the ground activity, allows Ontario to better counter the political rhetoric and misinformation that often comes with the Buy American culture.
Moving forward, we must aggressively and enthusiastically promote the benefits of a free and open Ontario-U.S. economic relationship. We need to continue to make the case that Ontario makes great products, is a great place to visit, has talented people, the home of the Toronto Maple Leafs and is open for business.
Investment decisions are often complicated or put at risk by government regulatory regimes. We support investors and business outcomes through understanding political considerations that often complicate positions and value. Combining our industry-leading market, sector and public policy experience, we ensure compliance obligations while managing political risk.
For more information on how McMillan Vantage Policy Group can support your investment and business expansion goals, contact Karl Baldauf.