Thank you, Mr. Chairman.

Thank you, members of the committee, for the invitation and for shining a light on this important topic.

The Canadian Council of Chief Executives is an organization composed of the CEOs of Canada's leading enterprises that are responsible for the vast majority of Canada's exports, investment, and research and development.

Member companies of the Canadian Council of Chief Executives collectively administer $6 trillion in assets and have annual revenues in excess of $800 billion across every economic sector of the Canadian economy.

It has been more than two decades since Canada, the U.S., and Mexico removed most of the formal barriers between our economies through the North American Free Trade Agreement, yet the intervening years have seen relatively few refinements to our cross-border frameworks. Because economic competitiveness requires ongoing effort, not just one-off actions, however bold, our commercial arrangements must evolve as well.

With the forthcoming North American leaders' summit in mind, the council decided to set forth our ideas for how we can concretely make improvements to the continent's competitiveness. The result was this paper, which some of you may have seen, “Made in North America”, which sets forth 44 concrete recommendations on how to make our continent more competitive. The document reflects consultations we had in Ottawa, as well as in Washington and Mexico City.

Our recommendations were guided and are guided by today's realities that no country in North America has the fiscal space for significant new appropriations, nor are we in the business these days of creating many new institutions. We've identified actions that are achievable within our means, and we found there's much that we can do.

In the years since NAFTA, Canada has oscillated between supporting deeper trilateral engagement with the U.S. and Mexico and supporting deeper bilateral engagement with the United States. We see this as a false choice. A better approach would be to apply the principle of subsidiarity. We will pursue cross-border policies at the level at which it makes sense, whether trilateral, bilateral, or regional among states and provinces. Pragmatism and viability should be at the core of our future North American competitiveness agenda.

As the Canadian government prepares to host the North American leaders' summit later this year, what should specifically be on their agenda? A core area for improvement is to bring the border into the digital age. Enhanced data sharing can be the foundation for a new partnership between the public and private sector. If done properly, it can drive both improved border security and supply chain efficiency.

Many companies believe that supply chain visualization technologies, which allow them to comprehensively monitor their production networks, and the application of big data analytics to predict behaviour therein is the wave of the future. Yet if you look at how we do things today, companies are presently making statutory declarations about the origins of the goods they are importing and their compliance with regulations and whatnot, based on information that they did not create or verify. Why? Because 20 years ago, when the rules were put in place, we did not have the technology to accurately track a manufacturing input three or four stages back in China, or wherever it was being produced, so what we did was encourage companies to effectively police their supply chains by threatening to severely fine them if the information on the declaration wasn't correct, even if that incorrect information was clearly unintentional. In 2015 we now have the technology to remotely monitor and predict what's going on in our supply chains. The challenge is that this is expensive.

In order to get to this grand new bargain between the public and private sector, what should we do? The federal government should begin a series of cross-sector pilots with companies willing to visualize their supply chains and share their data and analysis. Companies that participate would receive an exemption from penalties, except, of course, in the cases of fraud or malfeasance, and perhaps an exemption from certain tariffs or fees. In other words, you would go to your board and show an investment case for why this is being done. After testing, the lessons learned would be integrated into a program for all companies within Canada, and then, of course, we would seek to work with our partners in the United States and Mexico to extend this across North America.

By applying these types of rules, the private sector would learn much more about what is happening in their individual supply chains and where to derive efficiency gains. For its part, the government would get access to vast new quantities of structured data that would deliver insights about goods entering, leaving, or transiting Canada. In short, this deeper public private partnership would deliver enhanced trade facilitation and smarter security.

Technology can also deliver benefits on the traveller side. We all know NEXUS is an excellent program. We see this as an excellent platform on which to build enhanced benefits. It presently tells the government who is crossing the border but not why.

One of the most difficult issues in border policy pertains to business travellers and when someone arrives at the border they are asked that all terrifying question, “Are you working?” One of the consequences of the closure of the Citizenship and Immigration offices in the U.S. is that increasingly business travellers and others who need their cases for entry adjudicated simply go to the border, and this has led to a good amount or randomization in terms of treatment.

The U.S. Department of Homeland Security is calling for the development of a program known as the trusted employer program. Canada can do the same. How we think this should work is to pick up on the same vision of using technology to drive efficiency. We take the NEXUS platform and we build trip-specific information on top of this. You could get your general counsel to put in, “I'm going to cross at this time and here's the legal justification for what I'm doing”.

What we learned from cargo shipments is that providing information in advance leads to more efficient crossings. We need to do this with frequent travellers as well.

The report, of course, lays out a series of other things that I'm happy to get in to in the Q and A. We talk about remaking the workflow processes at the border to drive efficiency gains, using public-private partnerships to drive significant improvements in border infrastructure, working with the auto industry to significantly reduce the paperwork burden facing North American-built automobiles, picking a couple of successful areas in Canada-U.S. regulatory cooperation and experimenting with trilateralizing them with Mexico, and making the rules of origin among the Canada, U.S., and Mexico free trade agreements with Europe talk to each other.

I would conclude this way though. North America has the potential to be the most dynamic and prosperous region of the world economy for many years to come. From energy to innovation to good governance, we have all the right elements to succeed. All we are lacking is the will. To lead in the 21st century we must be smarter not only in our policy design but in the application of our corresponding regulations, procedures, and technological systems. Let us commit now to fully seizing this opportunity.

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