Canada still needs to convince U.S. our borders are safe after terror attacks

The long lineups of truckers and shoppers at the border probably aren't thinking about former al-Qaida Chief Osama bin Laden as they wait — sometimes for hours — to enter the U.S.

But 10 years after al-Qaida terrorists flew hijacked Boeing 767s into the Pentagon and World Trade Center in New York City, crossing into the U.S. is getting more complicated and costly as the months go by.

You could call it the bin Laden effect, and it's not all that hard to put a price on how much Canadians have paid for it.

A Fraser Institute study by economists Alexander Moens and Michael Cust have estimated increased security at the border, including "waiting, processing and security measures" cut into Canada's merchandize trade with the U.S., which reached $300 billion in 2010.

In fact, between 2001 and 2010, Canada's exports to the U.S. actually declined from 87 to 74 per cent.

To translate that into the truck loads, it comes to almost 24 million border crossings a year. While that sounds like a lot, it's actually declined by 14 per cent in recent years as border security regulations increased.

In fact, checks at the border have become so onerous and expensive that Canadian companies appear to be finding it easier to export their goods elsewhere. For example, while trade with the U.S. dropped from 2001 to 2010, it increased during that period with most other industrialized countries, including 14 per cent with Great Britain and 13.4 per cent with China.

Trade with Latin America has also increased in recent years, climbing to $51.9 billion in 2008 an increase of 22.6 per cent from 2007 alone.

The bin Laden effect also derailed the push by politicians and leading Canadian business executives to integrate continental trade beyond the Canada-U.S. Free Trade Agreement and North American Free Trade Agreement which includes Mexico. Their hope was to create an economic union on this continent similar to Europe's where custom requirements are universal, making borders much more efficient.

But the common perception in the U.S., and a view also held by prominent Americans like Arizona Republican Senator John McCain, is that bin Laden's 9/11 attackers entered the U.S. illegally from Canada.

A thicker border is the result. And phantom enemy or not, the number of U.S. Customs and Border Protection agents on the Canada-U.S. border increased from 340 in 2001 to 1,128 in 2008 and there are more than 2,000 today.

The trouble is these agents aren't sitting around doing nothing, and traffic-clogging inspections have increased as their numbers climbed.

Take cars for example. According to a joint American and Canadian Chamber of Commerce study, cars built outside of North America require a single customs clearance on a shipment of 4,000 vehicles.

But in North America, where the industry is highly integrated and where vehicles might cross the border six or seven times during their assembly, it may require dozens of customs and security clearances.

Ford Canada alone estimates each truck crossing the border with vehicle components is now delayed by an hour. "It produces a huge level of inefficiencies in our industry," says David Mondragon, president and CEO of Ford Canada.

The border is an even bigger problem for smaller companies that have invested heavily in Canada in the belief they would have easy access to the U.S. market.

For one, National Rubber Technologies of Toronto is a top North American supplier of materials engineered from recycled rubber. Company CEO Greg Bavington says the industry operates on tight profit margins and beefed-up border security can play havoc with his costs.

"Shipping 1,000 kilometres to the border is still significantly cheaper than driving 1,001 kilometres and crossing it," says Bavington. "The border costs us money. And for what? To stop guns coming this way and hydroponic drugs going south. That seems ridiculous if you've been to Europe."

The view that Canada is a security threat doesn't seem to want to go away, and likely means the border will stay clogged.

John Manley, head of the Canadian Council of Chief Executives, which wants to liberalize trade with the U.S., says security issues are continuing to hamper initiatives on both sides of the 49th parallel to thin the border.

And according to Manley, by adding tighter security measures, you get "the chaos and lineups we sometimes have at the border."

And despite killing bin Laden, it doesn't help that the Obama administration, as were previous Democratic administrations, perceived in the U.S. as being weak on terrorism. It's just one more reason why it remains doubtful Obama would suddenly announce measures making it easier for Canadians, and in some American eyes, terrorists, to infiltrate the border.

American reluctance to streamline access at the border is one of the reasons why it will be at the top of the agenda when Prime Minister Stephen Harper meets Obama in a few weeks in Washington.

One of the key obstacles at the border surrounds information sharing on individuals suspected of being a threat to Canada or the U.S.

According to Justice Minister Vic Toews, high on the list of things that will be discussed is, "How do we share information in an appropriate fashion in order to ensure that security interests are met and yet doesn't thicken the border?"

One solution might involve more integration between custom agents on both sides of the border.

Under the "Shiprider" program, Canada and the U.S. already cooperate in stationing officers from the other country on border patrol vessels. U.S. Homeland Security Secretary Janet Napolitano has said the U.S. wants to expand that initiative to include intelligence gathering and joint policing along the border region.

"Obviously, these are areas that require a lot of fleshing out," she said following a meeting with Toews, "but they, I think, are further evidence of our mutual intent that this border not be thickened, but that it be made more efficient."

The increased congestion at the border is also being complicated by decaying infrastructure, particularly at the country's busiest border-crossing in Windsor.

Goods worth nearly $150-billion, a large chunk of the annual merchandise trade between Canada and the United States, flow across the 2.3-kilometre span which is privately owned. But trucks must move through 17 streetlights in Windsor alone before they reach the bridge. It needs to be replaced, but neither side has been able to make much headway on the multi-billion-dollar project.

U.S. reluctance over security issues and decaying infrastructure probably means Canadians will have to deal with a congested border for years to come.

After all, the vast majority of Canadian businesses are dependent on the U.S market. But the same cannot be said for most American companies, so it will be up to Ottawa to convince Washington to find new ways to streamline access to the U.S.

If we don't, people stalled in those lineups at the border will be able to blame bin Laden for years to come.

(AFP Photo)