Business is just booming in Canada, eh. That message rang loud and clear at the Milwaukee World Trade Association’s 44th annual Wisconsin International Trade Conference Tuesday.
I was fortunate enough to be asked to moderate a panel discussion on Canadian/U.S. trade relations at the conference, which took place at the Italian Community Center in Milwaukee.
Here in the United States, we’re slogging through record national debt, two wars, record gas prices, skyrocketing food costs, an icy housing market, the subprime mortgage collapse, low consumer confidence, plummeting retail sales, a weak U.S. dollar and tightened credit.
To validate our woes, only six of the 19 local economic indicators tracked by the Metropolitan Milwaukee Association of Commerce pointed upward in March.
A lot of folks like to blame the messenger, i.e. the media. But I am here to tell you straight out that the media did not cause Harley-Davidson Inc. or Midwest Airlines to eliminate hundreds of jobs. The media did not cause Dell Inc. to cut 10 percent of its workforce or General Motors Corp. to cut 3,500 jobs, including about 200 in Janesville.
The reality is we’ve got some strong headwinds to fight through around here, but we’re doing our best to keep moving forward.
However, our neighbors to the north apparently are faring far better at this point in time.
Nancy Ward, director of the Canadian Trade Office of the Council of Great Lakes Governors in Toronto, Ontario, spoke on the panel Tuesday with great exuberance about the health of the Canadian economy.
Canada has no recession, she said. In fact, its economy is a reverse-mirror image of America’s economy, with a strong Canadian dollar, a tidy government budget surplus, an oil market boom, soaring retail sales, strong consumer confidence and unemployment at a 33-year low.
"Canadians are buying lots of things," Ward said.
They’re also making lots of things.
In 2004, Ontario made automotive history when it surpassed Michigan as the largest automotive producing jurisdiction in North America, according to Ward’s Automotive. While Detroit withers, DaimlerChrysler, Ford, General Motors, Honda, Suzuki and Toyota have shifted production plants to Canada.
I asked Ward why America is losing so much production and so many jobs to Canada. She did not hesitate with her answer. "Health care."
America has the highest health care costs in the world. I know it deeply disturbs many Wisconsin business leaders to hear it, but Canada’s government-paid, universal health care system is an economic competitive asset, when compared with America’s mish-mosh system that is part private, part socialistic and all redundant, inefficient and costly.
Ward also noted that Canada has a more tightly regulated mortgage banking system, so its economy has not been nearly as shell-shocked by the subprime collapse as the American economy has been.
I know what some of you are thinking. Something along the lines of, "Those Canadians don’t have to pay for their defense, because we do it for them."
True enough. But then again, there’s a matter of degree. America’s total cost for the war in Iraq could reach the $3 trillion mark, according to Nobel Prize economic laureate Joseph Steiglitz.
Some other observations from the speakers on the Canadian business panel Tuesday:
- Georges Rioux, Canadian Consolate General in Chicago, said the pressure is growing to create a "smart border" with the United States, using better technology and more manpower. In this era of "just-in-time" manufacturing and high fuel costs, neither country can afford to have its 18-wheelers standing idle in traffic jams at the border, waiting for inspections, Rioux said. "It’s important for our tourists, it’s important for our trucker, but most of all, it’s important to our way of life," Rioux said.
- JoAnn Queen, senior international trade specialist with the U.S. Department of Commerce in Washington, D.C., said the North American Free Trade Agreement (NAFTA), which is the subject of considerable debate in the U.S. presidential election, has been a resounding success for businesses on both sides of the Canadian border.
- Bill Werra, business unit manager for the process division of Sentry Equipment Corp. in Oconomowoc, said his company is growing rapidly as it manufactures equipment for harvesting bitumen from the oil sands of Fort McMurray in Alberta, Canada. The locals up there have dubbed their town "Fort McMoney," he said.
- Roch Lambert, vice president and general manager of the Outboard Marine Engines Division of BRP US Inc., said his company is thriving quite nicely in Sturtevant. He attributed the operation’s success to its proximity to the Canadian company’s development center in Waukegan, Ill.; the quality of the Wisconsin labor force; a local talent pool of qualified engineers; strong support from the Wisconsin state government; and a tight cultural fit of "outdoorsmen who like to play outside … We’re extremely happy to be here."
- Greg Charlesworth, vice president of foreign exchange services for M&I Bank, said the Canadian budget surplus "is a great advantage for their currency." He predicted that the U.S. economy will "pick up" a little bit in the second half of 2008, and interest rates will rise here in 2009. However, all bets are off if crude oil prices continue rising toward the $200-per-barrel mark, he said.
Steve Jagler is executive editor of Small Business Times.
