A new report from the Fraser Institute comes to a conclusion that will surprise few people in this community: Delays and security checks over the past decade have had a devastating economic impact — not just here but right across the country.
In fact, the Fraser study says ongoing delays and security checks are costing Canadians as much as $19.1 billion a year when it comes to lost trade and tourism. That amounts to a staggering 1.5 per cent of Canada’s GDP.
“Canadians and Americans are at a crossroads, either we continue with incremental and unco-ordinated border programs as we have often done since 9-11, or we begin to create a new border regime,” Alexander Moens, Fraser Institute senior fellow and co-author of the report, said last week. (The Fraser Institute is an independent Canadian public policy think-tank.)
Since 2001, the share of Canadian exports to the U.S. fell 11 per cent, according to statistics in the report. The Fraser study also pointed out that when it comes to border costs, it’s a two-way street. The share of U.S.-bound merchandise exports as a component of Canada’s aggregate economic output fell to 17.2 per cent as of 2010, down from 31 per cent in 2000.
On the tourism side, the Fraser report cites Statistics Canada numbers that show U.S. residents taking overnight trips to Canada dropped 23 per cent over the last decade, from 15.2 million in 2000 to 11.7 million in 2009. That’s the lowest number since 1985. The number of same-day return trips fell from 28.8 million to 8.8 million.
The report makes two key recommendations to deal with border thickening, and neither of them will come as a surprise to anyone in this community.
First, the report suggests that the 2011 Beyond the Border Declaration between Canada and the United States — in which both governments agreed to create an “integrated, multi-modal customs and transportation security regime” — is a much-needed step toward creating more efficient crossings.
Fraser says the initiative, which would harmonize border programs and regulations, could strengthen North American trade while reducing border costs for taxpayers, traders and travellers.
Second, the Fraser study recognizes the need for the new downriver Windsor-Detroit bridge. It lauds the U.S. and Canadian governments for coming to a deal to build the crossing, which it says will reduce long waits at the border and aid the automotive industry.
“The frictionless flow of commercial traffic between southern Ontario and Michigan is vital for an integrated and thriving North American automotive industry,” says the Fraser study. “Since 9-11, long wait times at border crossings in the Windsor-Detroit corridor have threatened the integrity of ‘just-in-time’ manufacturing processes and have added extra production costs to automobile manufacturing, thereby hurting the competitiveness and profitability of the North American automotive industry.”
The Fraser report concludes the new bridge promises to strengthen economic prospects for both Canada and the United States.
It’s just another voice of support for getting the shovel in the ground as soon as possible.