Will U.S. Energy Greening Stiff Canada? If It Does, U.S. Will Alienate an Ally and Probably Just Promote Self-Defeating Green Policies

By Keith Edmund White

Editor-in-Chief

When we think of Canadian energy, Keystone XL reigns supreme.  But did you know about the abundant hydropower the U.S. gets (and could get more of) from Canada?  In short, efforts to find sustainable 'green' energy alternatives are great.  But stiffing Canada in the process only alienates a partner and makes it more likely that government subsidies or other protections to green projects won't work on the global marketplace.

“Even green protectionism is protectionism nonetheless.” - Jim Prentice, former Conservative cabinet member, 2006-10 (Minister of Industry, Environment, and Indian Affairs and Northern Development)

Most Americans sympathetic to protective trade practices usually think of combating low-cost Chinese goods, not blocking our lucrative crossborder trade with Canada.

And most Americans concerned about the environment, wouldn't think that 'greening' the United States means protective trade practices.

But Jim Prentice, former Conservative three-time cabinet official from 2006-10 and now CIBC Vice President, reminded a Halifax audience of three important developments:

• North America is on the verge of being energy independent
• How the United States goes about promoting green energy could essentially lead to U.S. energy protectionism that directly affects Canada
• Canada's energy sector will rejuvenate Canada's Atlantic provinces.

From The Globe & Mail: 

“If we play our cards right, there will be profound opportunities for Atlantic Canada and for our country as a whole,” he told the Maritimes Energy Association in Halifax, according to a text of his speech.

But he said Canadians can’t take access to the U.S. market for granted.

Rather, Prentice warned that they should be vigilant about signs of protectionism coming in the form of low carbon fuel standards or regional requirements to use specific amounts of renewable energy.

“Canada must continue to fight for a continental energy marketplace that is free of national and sub-national impediments. Interventions by government, while well meaning, are nevertheless potentially damaging and counter-productive,” he said.

In short, Canada offers the United States a rich and diverse set of energy. And, frankly, both countries should to looking at a regional--not national--approach to energy.

Why? Well, because we share rich deposits of natural gas and oil along our shared border. And hydropower already links of nations.

But there's also this:  Shorting our critical energy player who can already provide abundant high and low-carbon energy sources to prop up U.S. energy production is likely to not even make the U.S. more 'green' in the long-term   

Instead, 'green' U.S. policies should incorporate the dynamics of its Canadian partner, so that both nations can focus their resources in ways that benefit both--and lead to lasting energy providers in both nations that can compete internationally.  The other option, making U.S. green energy policy in a vacuum--and ignoring the rich energy we can get from Canadian oil and hydropower--just means the policies the U.S. support just won't be the best fit for North America, or match the business dynamics of the global energy marketplace.

In short, the United States should ensure that it continues to use Canada as a partner to promote sustainable energy solutions.   The other option not only alienates a critical ally, but also makes it less likely that U.S. green initiatives will stick in the long-term. 

Is the Keystone XL Pipeline Irrelevant?

Will building Keystone only save $5 a barrel or oil?

According to a State Department report, rail (or rail/tanker combo) is a viable alternative to Keystone XL.

From the Washington Post's Brad Plumer:

There are also the economics to consider. The State Department report estimates that shipping Alberta’s heavy crude by pipeline costs about $10 per barrel, with rail in the $15 to $18 per barrel range. Yet some producers are telling Reuters that shipping by train to the Gulf Coast could cost as much as $30 per barrel.

Now, even at those higher prices, shipping tar sands by rail can still be viable — it all just depends on the demand for oil and available alternatives. Here’s one illustrative example: In March, refiners in Texas could buy Mexico’s Mayan heavy crude for around $106 per barrel. Meanwhile, Canadian heavy crude was selling for about $83 per barrel up north. At those prices, for tar-sands product to be competitive down in the Gulf Coast, transport costs would need to stay under $23 per barrel. Not impossible, but harder without a pipeline.

Unfortunately, there’s no easy way to predict what will happen. If the White House does block Keystone XL, that will certainly make life more difficult for tar-sands producers at the margins. There’s a reason why Canada’s oil industry strongly supports this $5.3 billion pipeline project. But it’s impossible to say for sure that the industry won’t find a way to bring that extra oil to market — especially since the rewards are so lucrative.

“There’s no test case,” writes Schor. “Either Keystone XL will get approved or it won’t.” And how you think about this question goes a long way toward how you think about the environmental impact of the Keystone pipeline.

What I find most interesting is the selective cost and environmental comparisons of Keystone XL pipeline pathway alternatives and "no action" (i.e. no pipeline alternatives .  

But instead of summarizing, how about I just give you this link to the whole report, and show the "no action" alternative report section below:

Colin Robertson Urges Canada to Embrace "Digital-Age Diplomacy" Towards U.S.

By Keith Edmund White

Editor-in-Chief

Can Canada magnify its influence in the United States through Blackberries, not consulates?

Colin Robertson uses the dust-up over a proposed U.S. government study on a new border fee to urge a revamp of Canada's U.S. diplomatic strategy.

Or as he puts it, "wage a permanent campaign in the United States on behalf of Canadian interests."

But how? In the face of tightening budgets, Canada has cut its consulate offices, the traditional way foreign offices advocate for their foreign policy interests and build strong bilateral ties.

Robertson's answer: ditch the office, take the blackberry.  From his The Globe and Mail editorial, whose title regrettably distracts from Robertson's main argument:

The lesson we can draw from both the DHS kerfuffle and the bridge saga is that we need to wage a permanent campaign in the United States on behalf of Canadian interests.

We need a thousand points of contact to complement our embassy and our consulates. This means taking our game to the States because by the time a problem reaches Congress we are fire-fighting.

Recent budget paring in Canada has reduced our consulates in the United States to fifteen. Yet, what we need is representation in every state. We can do it, within budget, by doing diplomacy differently.

Recruit talent from the Canadian expatriates who are already living in each state. Let them practice digital-age diplomacy. Drop the black tie for a BlackBerry and a working knowledge of new media.

With some exceptions – our embassy’s prime location on Pennsylvania Avenue is crucial, and the Los Angeles consul-general’s residence is a second home for Canada’s entertainment industry – these diplomats can work from their homes or incubator offices to spot opportunities for trade and investment.

[Note: I suspect many of these digital diplomats--Canadian or not--will be opting for iPhones over Blackberries.]

I think Robertson's editorial starts a good discussion for all world capitals on how nations can assert their interests in the 21st century. Dispatching staff to various locations, assuming that plane fare and gas reimbursements don't eat away at office savings, does seem to make sense whether its foreign subnational governments, small and medium-sized business, or ex-patriots a point of contact.

And going with Canadian expatriates makes sense as well.

But, as a biased American citizen, I would be remiss if I didn't stress the advantages of enlisting Americans in  any future Canadian digital diplomacy.

DHS Budget: White House Proposes Overall Cut, Biggest Surprise Loser? Coast Guard

So the White House's budget calls for overall cuts to DHS.  But will Congress stick with them?

By Keith Edmund White

Editor in Chief

Mickey McCarter does an excellent job rounding out the White House's budget--something I had hoped to do in more detail, but after two weeks I'm throwing in the towel.

But, keep in mind, that it was Congress that actually kept FY13 spending level at FY12 levels, shielding DHS from sequester.

And with the recent events in Boston, I will not be surprised if attempts to bolster homeland security spending don't find bipartisan support in Congress.  (Note:  Just look at the Massachusetts Democratic primary for John Kerry's former Senate seat.)

Yet, that makes a big assumption:  that Congress will actually pass a FY14 budget, and not punt through continuing resolutions--a move which may or may not affect current agency spending levels. 

Oh, and then there's sequestration.

From McCarter's article on the overall budget:

The White House Wednesday unveiled its fiscal year 2014 budget proposal for the Department of Homeland Security (DHS) and other federal agencies, calling for $39 billion in discretionary funds for DHS, a reduction in its overall budget.


In a separate proposal pursuant to the Budget Control Act of 2011, the Disaster Relief Fund would receive $5.6 billion.

The administration compared the overall proposed numbers to enacted levels in FY 2012 as it did not have final numbers for FY 2013, which only were decided on at the time of the signing of a FY 2013 consolidated spending bill on March 26. As compared to final FY 2012 levels, DHS discretionary spending would be down 2 percent in the budget proposal.

...

According to the Homeland Security 2014 Budget in Brief, most DHS agencies would experience budget cuts of five to eight percent, which is in addition to the sequester imposed on the department -- should the sequester continue.

And his article focusing on the tough decisions Napolitano is asking Congress to make:

The increase in spending at the DHS S&T Directorate would go toward fully funding the construction of the National Bio and Agro-Defense Facility (NBAF) in Manhattan, Kan., Napolitano said.

The facility is necessary to replace the failing Plum Island Animal Disease Center, which soon will not be able to support national requirements to defend against threats posed by biological agents, Napolitano said.

"This innovative federal-state partnership will support the first Bio Level 4 lab facility of its kind, a state-of-the-art bio-containment facility for the study of foreign animal and emerging zoonotic diseases that is central to the protection of the nation's food supply as well as our national and economic security," Napolitano said in her testimony.

The state of Kansas already has put up $320 million to build the center, Napolitano said. DHS must respond with its portion of the funding, totaling $714 million.

"At some point, we have to bite the bullet," Napolitano said of finishing NBAF construction.

The Buddy-less Study? Proposal to Study a Possible U.S. Border Fee Gets Another Opponent

Keith White on growing Congressional opposition to a White House proposal to study the impact of adding a new crossborder fee.

By Keith Edmund White

Editor-in-Chief

Bill Owens (D-NY) has pledged to "explore all legislative options" to prevent a proposed DHS study on the "feasibility and cost" of a new border fee at northern and southwestern U.S. border crossings.

Who thought a boilerplate study would generate such buzz?

But when the study relates to slapping a new fee on crossborder travel between the United States and Canada, pushback is to be expected.

A New Canada-U.S. Border Fee? Prospect of a New U.S. Fee Worries Both Sides of the Border

Will the United States slap travelers with a new fee when crossing the Canada-U.S. border?

The White House's proposed Department of Homeland Security (DHS) budget includes boilerplate directing DHS to study the "feasibility" of imposing a new Northern and Southwest cross border fee.

Beyond the Border Observer, a blog from the Woodrow Wilson Center's Canada Institute, provides some useful background and roundup of critical responses in Canada and the United States. 

Think Canada-U.S. Trade Issues Are Settled? Think Again.

By Keith Edmund White
Editor-in-Chief

With all this blog's focus on the Canada-U.S. trade and economic relationship, I realized some readers may think:   Canada-U.S. trade issues are so 1992.

Well, just look at what barriers remain between the United States and Canada.

Here's a description of Canadian barriers to U.S. trade (go to pages 53-61):

And for the Canadian perspective, check out this 2008 report (pages 19-21):  (Question:  Anyone know if there's been an update?)

A summary of these findings will be highlighted latter.  

But one take-away is obvious:  NAFTA didn't end trade issues between Canada and the United States.

Mowat Centre and CUSLI Talk Stress Need for a Binational Approach to Ensure a Vibrant Great Lakes Future

A new group is working to ensure the Great Lakes Region is seen as the Fresh Water Coast, and not the Rust Belt.

Last week's Toronto Star highlighted the launch of The Council of the Great Lakes Region (CGLR).  

The goal:  secure a bright future for the the Great Lakes Region by bringing together the many public, private, and non-profit groups in the region, identify keys issues facing the region, and then develop and implement solutions.  

Whether its encouraging tourism, pushing policies in the public and private sphere that foster advanced manufacturing, addressing climate change, or pushing regulatory alignment in this bi-national trading hub, The Council of the Great Lakes Region (CGLR) has its work cut out for it.

David Kocan and Matthew Mendelsohn, directors of the Canada-U.S. Law Institute and the Mowat Centre, respectively, and CGLR launch committee co-chairs, talked CGLR and Great Lakes water levels in last Thursday's Toronto Star:

People on both sides of the border know that the health of the economy and the ecosystem on one side of the border will impact those on the other side. But no organization has a mandate to focus on the future of the binational region.

Infrastructure, energy, investment attraction and tourism are just a few of the issues where closer co-operation would benefit people on both sides of the border. Some of the first issues the new council will tackle will be water levels, infrastructure renewal and border improvements.

The future is unpredictable, but looking forward 25 years, the communities around the Great Lakes are a good bet to be among the best places in the world to live. But we must steward that common future together, with smart regulatory, policy and planning choices.

Until now, the region has not had a voice. With the founding of the Council of the Great Lakes Region, it finally does.

Snap Summary: CUSLI Nexus, Day 2, Energy Panel - Shared Energy Resources and Strategies in the Great Lakes-St. Lawrence Region

A diverse group of energy experts shared presentations on the changing North American energy relationship.  The main takeaway: Canada-U.S. energy relations are changing, and whether its short-term energy development to meet current needs, or long-term shifts to green energy through coordinating North American power generation, sustained Canadian-U.S. engagement will be critical.

Julie Dill:  “Energy Is Good for the Region…[and building] a Strong and Sustainable Future”

Natural Gas Is Here, And With It Energy Will Flow to the Great Lakes Region Increasing Not From Alberta but from the Great Lakes Itself and the Northeast.

Snap Summary: CUSLI Conference 2013, Day 2, Bridge Builders Panel

The panel, chaired by Mowat Center Director Matthew Mendelsohn, discussed the great challenges facing the Great Lakes Region.  From just this emerging list of Great Lakes priorities, its clear ha there is a need for an organization like The Council of the Great Lakes Region (CGLR) is bring together experts and decision-makers to ensure a bright future for the Great Lakes Region.

Water and Non-Native Invasive Species.  Former Ohio Governor Robert Taft stressed water and non-native invasive species, noting the region’s core interdependence does not just derive from deep economic ties, but from geography and natural resource distribution.

Jobs.  Former Mayor of Toronto David R Miller gave a three-pronged proposal to generate jobs in the Great Lakes Region.

Snap Summary, CUSLI Conference Panel 3 – The Great Lakes-St. Lawrence Region in the Era of Global Competition

The Canada-U.S. economic relationship is fundamentally different with the raise of new major economic powers.  And public policies, whether workforce training or deciding how much foreign State-owned industries (read: China) can buy into domestic industries.

The panel participants:

Jim Dickmeyer, U.S. Consul General in Toronto (Chair)

Renato Discenza, C Suite Leader in Private and Public Sector

Kasi V. P. Rao, Kasi Rao Consulting Inc.

P. Kelly Tompkins, Executive Vice President for Legal, Government Affairs and Sustainability, and Chief Legal Officer,  Cliffs Natural Resources and President, Cliffs China

Christopher Smille, Senior Advisor, Government Relations and Public Affairs at Building and Construction Trades Department, AFL-CIO

Douglas Porter, BMO Capital Markets

The Global and Canada-U.S. Economic State of Play:  U.S. Looking Up, Canada Down a Touch, Great Lakes is a Critical Economic Player

Douglas Porter, of BMO Capital Markets, kicked off the panel with a presentation on the state of the global economy.

CUSLI Conference: Lunch Time!

Panel #2 – Snap Shot Summary: Water Governance in the Great Lakes Region

The Great Lakes can't solve all environmental threats facing the Great Lakes, but it can set an example for other regions and nations to follow.  And check out the Great Lakes Futures Project.

A pre-Q&A summary of the second panel of the CUSLI 2013 Conference.

Participants: 

• Lana Pollack, Chair of the U.S. Section, International Joint Commission (Chair)
• Andy Buchsbaum, Regional Executive Director, Great Lakes Regional Center, National Wildlife Federation
• Tim Eder, Executive Director, Great Lakes Commission
• Gail Krantzberg, Professor and Director of the Dofasco Centre for Engineering and Public Policy, School of Engineering, McMaster University
• Jeffrey Mears, Environmental Area Manager, Oneida Tribe of Indians of Wisconsin
• Rear Adm. Michael Parks, District Commander, Ninth  U.S. Coast Guard District (Discussant)

Past Successes, and Current Successes:  The Great Lakes, Great Lakes Compact, and the Invasive Species Threat

CUSLI Conference 2013 -Great Lakes Region - Panel 1: Economic Tranformation and Bi-National Cooperation

The 2013 Conference is underway.  Right now focus is on the launch of the Council of the Great Lakes Region (CGLR).

CGLIR is being launched.  And a panel of six distinguished experts in different areas of the Canada - US relationship are chatting about the importance of Canada-US organizations coming together to map out strategies to maximize the Great Lakes economic potential.

David Crane's 3 Challenges for the Great Lakes Region, and Where CGLR Must Make a Difference to Be Relevant

David Crane, of the Toronto Star, in typical fashion got to the heart of the matter.  For CGLIR to succeed it most identify and then help bring together problem solvers to tackling economic challenges in the region.

He mapped out three such challenges:

The 'Eerie' Great Lake: Erie "Most Debris-Ridden of the Great Lakes"

Lake Erie doesn't glow in the dark, but today's Atlantic makes me worry.

From The Atlantic:

Lorena Rios-Mendoza, an oceanographer at the University of Wisconsin-Superior, is one of the scientists who've plunged the polluted depths of American lakes. Her team recently sampled sections of Lake Erie – which can't seem to catch a break these days, what with its mercury infection and rashes of poisonous algae – and discovered that the water's been invaded by great quantities of microplastics mostly smaller than grains of rice. Specifically, they measured concentrations between 1,500 and 1.7 million particles per square mile, which is 24 percent greater than what they found in the Atlantic Ocean's debris field.

...

This survey comes on the heels of another effort by researchers at the State University of New York, who found that Erie was the most debris-ridden of the Great Lakes. (Lesser-populated areas around Superior and Huron had less plastic pollution.) One of the scientists in that project noted that the material seems custom-built to stay off the public's radar: “People became aware of plastics in the oceans and waters in the ‘60s and ‘70s, and the great Pacific garbage patch. But from far away, bits of plastic look just like the water. So it’s not so noticeable or recognized in the greater topic of plastics in the environment.”

Ambassador Bridges Goes Corrosive: Michigan Considers Permitting Hazardous Materials to Cross

May not seem like a big deal. But anything that could affect cross-border trade on the Ambassador Bridge could have huge ramifications. Why? From Bloomberg Business Week:

Twenty-five percent of U.S.-Canada truck freight moves across the bridge, some $82 billion worth of goods every year. That’s more than the U.S. exports to Germany or Japan.

So, in the trade world, this is a huge deal, one if it involved federal actors would be all over WaPo and the NYTimes.

So let’s check out the details of this proposed policy change, which would give hazardous waste truckers another option besides the Detroit-Windsor Truck ferry.

From yesterday’s Hill Times article: 

The Detroit International Bridge Company, which owns the Ambassador Bridge, is seeking permission from the Michigan government to let trucks carrying gas, propane, and other flammable and corrosive chemicals across the bridge.

…
Under the proposed new rules, trucks carrying gases and chemicals would require Ambassador Bridge escort vehicles to make the trip across the span with them.

…

Every day, more than 8,000 trucks cross the Ambassador Bridge, which is Canada’s busiest border crossing, noted Minister of Transport Denis Lebel (Roberval-Lac Saint Jean, Que.) in a column for this week’s transportation policy briefing in The Hill Times.

If the bridge is allowed to carry hazardous materials, the increase in truck traffic would likely be just a few dozen more vehicles a day, said Mr. Stamper.

The bridge carries 25 per cent of Canada-U.S. merchandise trade, worth almost $500-million a day, according to the bridge company.

…
Commercial vehicles crossing the bridge pay a toll of between $3.25 and $5.25 an axle. At current rates, which don’t include a premium for hazardous materials, a typical semi-trailer truck with five axles would pay $26.25 to cross the bridge one way.

Check out the MDOT hazardous waste transportation study here.

Alberta's 'Green' Talk: A Serious Plan to Combat Greenhouse Gases, or Gambit to Secure U.S. Keystone XL Approval?

By Keith Edmund White

Editor-in-Chief

Alberta, Canada's oil production heavyweight, is pushing for increased carbon production taxes and seeking to slash GHG emissions.  Apparently, Ottawa is surprised.  Yeah, I thought I was reading an exceedingly dry Onion article.  Oh, wait...it's a plan offered by Alberta's Environment Minister...that is not endorsed by Alberta's Conservative government.  OK, the sky's not falling.  So the real question:  Are Alberta's Conservatives looking green to win Keystone, and then offer up a dead-on-arrival plan?

Is McQueen's  carbon plan for real?

The Globe and Mail reports (or hypes up?) a recent carbon tax and reduction plan offered by Alberta's Environment Minster:

The Alberta government has quietly presented a proposal to sharply increase levies on carbon production and force large oil-industry producers to slash greenhouse gas emissions by as much as 40 per cent on each barrel of production, a long-term plan that has surprised Ottawa and industry executives with its ambition.

Alberta Environment Minister Diana McQueen stunned a recent meeting in Calgary attended by senior oil executives and her federal counterpart, Peter Kent, with the proposal, which goes well beyond anything Ottawa or the companies contemplated, industry and government sources said Wednesday. The three sides are engaged in intense negotiations, with the industry warning that regulations that are too onerous could undermine the competitiveness of the oil sands sector as it seeks international investment. to drive production growth.

...

[Alberta Premier Alison Redford/Diana McQueen's boss] and Prime Minister Stephen Harper are under considerable pressure to introduce regulations for the oil industry to limit greenhouse gas emissions.

The Cynical Read:  Looking Green Key to U.S. Keystone Approval.  My guess is that this plan has one main audience:  the United States.  If Alberta looks 'super' green, it makes it easier for Keystone to get approved.  The catch:  the plan will be so long-term that the 'carbon pain' won't be felt until Alberta's Progressive Conservatives or either out of office or filled with new leaders.

Cynical Read 2.0:  What 'Great' Timing!  Oh, and this is a pretty well-timed leak, given that Alberta oilsands environmental data is about to be released. 

Yeah, yeah...but maybe the plan's for realies?  Ha.  This March 2013 Globe and Mail article shows just how blistering the Alberta's environmental hot potato is.  

The main takeaway:  Alberta Premier Redford will take heat for any real carbon tax increase, let alone steep reductions, unless (1) they come online way into the future and (2) secure Keystone XL in the short-term.  

And Redford's opponents, Alberta's Liberal Party and the strong provincial party Wildrose, are happy to exploit Redford's tough spot whatever way they can. 

Something tells me that Redford's Alberta critics and Keystone critics are going to react to news of Redford's Green Plan 2.0 with some help The Who:

But it might just get Alberta Keystone.

From the Globe & Mail ,March 2013 article on Alberta Conservative's environment-Keystone XL headache:

The Alberta government’s climate-change plan was under scrutiny Tuesday, a day after comments Ms. Redford made in Ottawa were interpreted as a call on the federal government to follow Alberta’s lead in putting a price on carbon.

...

The Premier quickly backed away from those remarks, saying that’s not what she meant, but was grilled in Question Period by the opposition. At one point, she scolded the provincial Liberals – a party that last year proposed what would ultimately be a $1.8-billion-per-year provincial carbon levy – for “saying that our environmental record in Alberta isn’t good enough. That’s not good for Alberta, and it’s not good for Canada.”

Liberal Leader Raj Sherman said a higher carbon price would help pave the way for pipelines. “If we actually dealt with the environmental issues that we face, we could get our pipelines to the U.S. and the West Coast. It’s hurting us not to do this right,” he said.

...

The Premier was said to have called on the federal government to follow Alberta’s lead and introduce a price on carbon. Her office later said she was misunderstood, issuing a clarification and then making Ms. Redford available to speak to reporters in Edmonton on Tuesday. “I am in no way advocating any sort of national carbon tax. That’s for other governments to decide,” she said.

Wildrose Leader Danielle Smith nonetheless accused the Premier of advancing a plan that “would see Alberta’s vast resource wealth sucked out of this province and pumped into Ontario and Quebec.” Ms. Redford later fired back. “The suggestion that that’s what the conversation was about [in Ottawa Monday] is absolutely absurd, but I don’t expect anything more from the opposition,” the Premier said, later noting that Ms. Smith said just last year that the “science isn’t settled” on climate change.

'These Boots Made for Walking' or 'I Got You Babe'? Canadian Chamber of Commerce Pushes Canada to Diversify it's U.S.-Heavy Trade

CUSLI-Nexus talks Canada-U.S. trade relationship, with the help of some classic 60s tunes! 

The Canadian Business Journal (CBJ), an excellent and free resource to catch up with Canadian business issues, offers a Canadian Chamber of Commerce article that reviews Canada's Top 11 impediments to international competitiveness (go to page 18).

Top on the list:  Human resources.  Canadian businesses are having trouble attaining the skilled work-force they need.

But, also of note, was the Chamber's addition of trade diversification, especially in energy (cough, Keystone).  (Note:  This 'Top 11' list built off the Chamber's 'Top 10' list in February.)   

So is the Chamber telling Canada change its U.S. lullaby to this Nancy Sinatra classic?

From the Chamber's CBJ article:

Some other takeaways from the issue overall: 

• Canada as Resource King.  From the selection of articles, Canada's resource industry dominates Canada's business scene.
• Canada Should Up Trade Diversity, But Loving Microsoft.  While pushing trade diversification, especially in energy, note the cover story on Microsoft Canada.
• Business and the public sector.  Business issues are social issues:  (1) note the absence of concern over healthcare costs, unlike in the United States, and (2) the need for Canada to train its workforce (or bring in skilled immigrants).  Impact:  government policies are business issues. 
• Canada and the United States:  'I Got You Babe?'  I hate to repeat myself, but the defining issue in Canada-U.S. relations isn't whether they diversify their trade partners.  Rather, it's whether both nations harness their relationship in order to succeed in an increasingly competitive global marketplace.

BTB 2.0? Stakeholders Crowdsourcing Site Promises Increased Collaboration and New Ideas for BtB and RCC

From BtBObserver, who reports on the new BtB crowdsourcing site Idea Scale: 

Have an idea to make the Canada-U.S. economic and border relationship run smoother? Crossborder stakeholders want to hear your ideas. And they may just shape the work of the Beyond the Border (BtB) Initiative and the Regulatory Cooperation Council (RCC).

Pacific Northwest Economic Region (PNWER), Canadian American Business Council, U.S. Chamber and other US-Canada partnering organizations have launched Idea Scale, a crowdsharing website where crossborder enthusiasts can post and comment on ideas to improve the Canada-U.S. regulatory relationship.

Check out Idea Scale here.  Whether sharing ideas or just monitoring the mystical art of crossborder regulatory transformation, the site is definitely worth regular visits.

Why Reading Reports Is Clutch: GAO’s Important Report on the National Critical Infrastructure Prioritization, and the Underwhelming Press Release

By Keith Edmund White

Editor-in-Chief

GAO releases a report, which by a press release, seems like a simple 'turn in your homework' admonition regarding the U.S. federal program that prioritizes sites in the U.S. where we really don't want bad things to happen.  But, as Keith White shows, when the report it read, you might be a little worried about how well DHS is handling this list, and the resulting federal funds and programs that accompany it.  And yes, Canada factors in too.

  

GAO releases a report on the National Critical Infrastructure Prioritization Program (NCIPP).  This report lists places where the U.S. government would really not want bad things to happen.

I got the report through a third-party information gatherer I'll keep unnamed, who summarized it as such:

“In a new report, GAO finds that the Department of Homeland Security (DHS) has not sufficiently met statutory requirements to report annually to congressional committees. Specifically, DHS needs to work on how it identifies critical infrastructure such that it is consistent with the National Infrastructure Protection Plan (NIPP). GAO recommends the DHS commission an external peer review to develop an approach to verify the quality and timing of annual reports.”

Sounds like a not too consequential, and likely dull, report.

Then I read the report.

DHS has made several changes to its criteria for including assets on the NCIPP list. These changes initially focused on introducing criteria to make the lists entirely consequence based, with subsequent changes intended to introduce specialized criteria for some sectors and assets. DHS’s changes to the NCIPP criteria have changed the composition of the NCIPP list, which has had an impact on users of the list. However, DHS does not have a process to identify the impact of these changes on users nor has it validated its approach for developing the list.

And who are these affected users?

Oh, just FEMA when it’s doling out Urban Area Security Initiative grants. And the Protective Security Advisor Program, you know the department that conducts actual site visits and vulnerability assessments to owners of critical infrastructure.

Our analysis shows that changes to the NCIPP list can have an impact on users of the list, specifically, FEMA’s allocation of UASI grant funds and PSAs’ ability to prioritize outreach and conduct site visits for its protection programs. Our analysis of the FEMA risk formula shows that a change in the number of NCIPP-listed assets located in a city has an impact on a city’s relative risk score. Our analysis also shows that current UASI grant allocations are strongly associated with a city’s current relative risk score. Therefore, a change in the number of NCIPP-listed assets located in a city can have an impact on the level of grant funding it receives. For example, in fiscal year 2012, FEMA allocated approximately $490 million in UASI grant funds to the 31 cities with the highest relative risk scores out of 102 eligible cities nationwide. Our analysis of FEMA’s risk formula showed that, at the minimum, if the number of level 2 assets is increased or decreased by as few as two for each city, it would change the relative risk score for 5 of the 31 cities that received fiscal year 2012 UASI grant funding. Such a change could result in increased or decreased grant funding allocations for the affected cities. The changes in the relative risk scores tend to affect cities in the middle to the bottom of the top 31 list because there is generally a larger gap between the relative risk scores of those cities at the top of the list than those in the middle to bottom of the list. However, even a small change in grant funding could have an impact on a city, especially if that city does not traditionally receive other federal assistance as compared with cities with higher risk scores.

And yeah, this might have a significant impact:

While the change to an entirely consequence-based list created a common approach to identify infrastructure and align the program with the statute and NIPP, recent and planned criteria changes to accommodate certain sectors and assets represent a departure from this common approach, which could hinder DHS’s ability to compare infrastructure across sectors.

Go intra-agency coordination!  NCIPP, FEMA, and PSA are all housed in one federal department, the Dept. of Homeland Security, and information-sharing problems seem to linger.

But let's not get too snarky.  DHS is taking on the arduous task of changing the, at times politicized, NCIPP list.  Getting more Congressional oversight on this hot-bottom item will bring, whatever its numerous benefits, will bring increased political pressures on a program--especially in the lean (or not so lean) times of sequestration.

WaPo Misses a Tree for the Forest: Is Canada the Biggest Sequester Winner?

By Keith Edmund White
Editor-in-Chief

WaPo misses the mark, and Canada may be the sequestration-avoidance winner.

Today the Washington Post (WaPo) reports on how one federal program 'beat' the sequester, highlighting Department of Agricultural's ability to snag meat inspectors funding. WaPo's take on the strategy: If one Agricultural program could win, so can others; ergo, sequester isn't playing out the way we want.

Well, the conclusion's sound: Sequestration isn't playing out the way some commentators said it would. But seeing as sequestration really starts today, it seems a little early to be writing sequester's post-script. And sequester 2.0, i.e. next year's cuts called for in the 10-year cost-cutting plan, still have to be played out.
But, less impressive, is WaPo's omission that the FY13 continuing resolution that enshrines sequester in the final six months of the current fiscal year (FY), which one Agr. program avoided, came along with four new FY13 appropriation packages.
So, really, Defense, Homeland Security (DHS), Commerce/Justice/State, Veterans Affairs/Military Construction all 'beat' sequestration to varying extents. In fact, DHS got roughly the same agency-wide funding as it did last budget cycle.
I doubt these agencies will be asking Agr. Secretary Tom Vislack for sequester advice any time soon.
To sum-up: WaPo mistakes a tree for the forest, and--in so doing--misses the gravity of sequestration's interesting FY13 implementation. And then WaPo gets tree myopia, and doesn't really illuminate sequestration's 10-year 'loop'.

But, perhaps more interesting to readers, is figuring out what country has benefited the most from FY13's unusual sequestration implementation.Given the extensive military acquisition, trade, and border security relationship between Canada and the United States, maybe WaPo should cast Canada as sequestration's Biggest Winner.