Ambassador Heyman’s Remarks to the Securities Industry and Financial Markets Association (SIFMA) Canada-U.S. Securities Summit
April 26, 2016
As prepared.
Thank you for the kind introduction, Kenneth (Bentsen, Jr., President and CEO of SIFMA). You know, I’ve travelled all across Canada, to every province and territory — some of them more than once — and I love Canada, but it’s always nice to come back to the United States and especially to New York. The caliber of speakers at the summit today — and I’m really looking forward to hearing from Governor Poloz next — highlights the strength and breadth of the U.S.-Canada relationship. The opportunities and challenges we face together are a true testament to the great number of people who commit their energy and best ideas every day to make the relationship even stronger.
Just over a month ago, I had the privilege to be at the White House as President Obama hosted Prime Minister Trudeau’s official visit to the United States. It was a really big deal — the first official visit for a Canadian Prime Minister in almost 20 years and the second Prime Minister Trudeau to meet with a sitting U.S. President. I was with the President and Prime Minister for much of the visit and they got along very well. The evening of the dinner I was on the Truman Balcony with the Obama and Trudeau families. They were talking like old friends — very much at ease with each other. During the dinner and at meetings there was such a strong sense of common purpose and warmth of feeling, it was truly remarkable. The whole experience — the ceremonies, the substantive meetings, the conversations, and connections — all served to reinforce to me that the U.S.-Canada relationship is as strong as it has ever been!
After a very productive visit, we came home with a significant list of accomplishments and some additions to our joint action list, all of which will further advance the relationship and our shared future.
Today I want to talk to you about a few of those outcomes and where we are going, together, to build on our progress.
The United States and Canada share a distinctive economic relationship. No other economic relationship in the world is as broad or as deep. We hit record levels of bilateral trade in 2014. Our two-way goods and services trade totaled $671 billion in 2015 — close to $2 billion every day! Now that figure is down a bit from the prior year. Our trade in goods alone was down $85 billion in 2015. But that decline is in large part due to lower oil and other commodity prices and fluctuations in the exchange rates. Even in a down year, the figures illustrate the magnitude of our trade relationship. Consider that $85 billion I just mentioned. It’s more than the United States’ total annual trade in goods with some developed European countries. Our annual trade in goods with Canada in 2015 was still more than the United States’ annual merchandise trade with Japan, India, South Korea, and Brazil combined.
With the Prime Minister’s visit to Washington, our leaders have set the framework to take our economic growth to the next level. We’ll need investment on both sides of the border to fuel the innovation that will further transform our economic relationship.
As many of you know, I grew up in Dayton, Ohio, the hometown of two of the world’s most famous…no, most important innovators — the Wright brothers. They not only launched humanity into the air, but also showed us that the seemingly impossible is actually possible. Orville and Wilbur had the vision to look beyond the technology of their day and create the technology that opened the door to a century of aeronautical innovation; taking us from Kitty Hawk to Tranquility Base in only 66 years. Theirs was not an evolution, but a technical revolution.
We’ve moved beyond conquering gravity. Now, we need out of the box thinking and investment capital to develop innovative solutions for today’s problems. For example, rather than working in a barn in Ohio, people from around the world meet at “hackathons” where programmers and software and hardware developers collaborate on software projects that look at familiar problems in a new way, tackling everything from border crossings to water conservation on the St. Lawrence seaway. Your investment and financing give air and lift to this new approach to creativity.
One of the things I love about my job as Ambassador is seeing the direct impact of our unprecedented economic relationship first hand. In my travels across Canada, I see how cross-border investment expands trade and grows the economies on both sides of the border. Our shared stock of investment totals nearly $700 billion. Canada is the United States’ fourth largest destination for foreign direct investment, and I’d like to see Canada move up on that ranking. And there are vast opportunities north of our border, especially in the amazing amount of natural resources we share.
The U.S. and Canada enjoy an abundant trade in natural resources. Today, Canada and the United States form an interconnected, co-dependent energy market. Energy travels in both directions over our borders and is an important component of our broader trade relationship. Canada is the largest, most secure and most reliable supplier of energy to the United States. Here are some examples:
- Canada is the largest supplier of crude oil to the United States — providing 43 percent of U.S. imports in 2015;
- Canada is the largest supplier of natural gas to the U.S. — the source of 95 percent of our imports;
- Canada is one of the United States’ largest suppliers of uranium, providing nearly a quarter of the uranium that fuels U.S. reactors;
- Almost 100 percent of U.S. electricity imports come from Canada.
I could go on, but I think you get the point. Our energy relationship is truly unprecedented. We don’t measure success only in resources trade, but in what that trade actually enables us to accomplish. Our cross-border investments are the ties that really serve to bind our economic fortunes together and provide opportunities for our citizens. Resource trade also represents an unprecedented opportunity for investors, particularly when you think about the commitments the President and Prime Minister have made to strengthen North American energy security, phase out fossil fuel subsidies, and accelerate clean energy development to address climate change and to foster sustainable energy development and economic growth. This is today’s technological revolution.
Together we can find a way to balance the massive natural resources trade between our two economies and the protection of environment we share along the longest border in the world, 5,500 miles in all. When it comes to the environment, I firmly believe that what is good for one side of the border is good for the other side. Both of our countries have demonstrated time and again a willingness and commitment to address pressing environmental issues. We need that shared commitment and spirit of cooperation now more than ever to take on climate change.
A key outcome from Prime Minister Trudeau’s meeting with President Obama was a plan to reduce greenhouse gas emissions and to develop clean energy. We committed to significantly reduce methane emissions, committed to phasing down hydrofluorocarbons, and agreed to a market-based mechanism to limit carbon emissions from international aviation through technological advancements as well as carbon offsets.
In a statement following the visit, President Obama and Prime Minister Trudeau highlighted the United Nations Framework Convention on Climate Change Paris Agreement as a turning point in global efforts to combat climate change and an anchor for economic growth in clean development. Canada and the United States are not only fully committed to the agreement, but have since pledged to complete their long-term low greenhouse gas emissions strategies in 2016, and have committed to working with developing countries to assist in their implementation of the Agreement. These commitments send a powerful signal that our governments are serious about taking on climate change and that the time for action is now.
But the scale and consequences of climate change are such that governmental regulatory action is only part of the solution. We also need to ramp up our investment in innovative, clean technology to drive the revolution that will help us meet our commitments, defying the gravity that keeps us carbon-bound and transitioning to a low-carbon future. Just as the Wright Brothers learned at Kitty Hawk, we can make the impossible not just possible, but commonplace.
Through programs like Mission Innovation, the governments of the United States and Canada, along with 18 other likeminded partner countries, will seek to double investment in clean energy research and development by 2020. This is exactly the type of initiative we need to develop transformational clean energy technology over the coming years.
And that’s where you come in. To meet these goals, the private sector and the investment community will need to make significant commitments as well. In fact, it’s already beginning to happen. Bill Gates and more than two dozen other investors recently launched the Breakthrough Energy Coalition, to provide the capital to commercialize potentially transformational green technology. Over the last year, a total of 154 companies, representing more than $4.2 trillion in annual revenue — that’s trillion with a “T” — have signed the American Business Act on Climate Pledge to reduce emissions, increase low-carbon investments, and use more clean technology.
In 2015 alone, U.S. and Canadian firms invested a combined $60 billion in clean technology, more than all of Europe and the second largest amount of such investment outside China. Part of the reason I’m here is to encourage you to invest in the cross-border opportunities that leverage our trade relationship as a way to diversify your portfolio, to be sure. But while addressing climate change is a significant challenge, it also represents a significant economic opportunity where investors can put their unique drive and innovation to work to enhance our shared prosperity. Clean tech and socially responsible investment give you the chance to do well financially, of course, but also the chance to do some good.
I understand that there are some countries that do not share our same concerns. But the United States and Canada can use our trade policy to advance many of our broader goals. After all, trade policy doesn’t just support our countries’ economies; it reflects our countries’ values as well. History tells us that increasing trade leads to enhanced productivity, increased innovative activity, higher standards of living, and lower prices on a greater variety of goods and services. And that’s why I stand with the President on the Trans-Pacific Partnership — not only to foster economic growth and prosperity, but also to advance our interests related to the environment, the rule of law, and labor rights.
TPP is about protecting workers’ rights and safety with fully enforceable standards for the first time in history. It’s about lowering or eliminating thousands of tariffs on products made in the U.S. or Canada and promoting anti-corruption efforts and intellectual property rights. We now have the opportunity to spark trade throughout the Pacific region with a trade agreement that reflects today’s global economic realities and takes advantage of new opportunities. And that is just what the Trans-Pacific Partnership offers.
The United States and Canada, along with our other 10 TPP partner nations, signed the agreement in New Zealand in February and need to work hard to pass this transformational trade framework. All told, TPP countries comprise nearly 40 percent of the global economy with a population of more than 800 million. The importance of this agreement cannot be overstated. It’s a game-changer that will help our countries succeed in a rapidly evolving global economy.
As I said earlier, without a doubt, the U.S.-Canada relationship is as strong as ever. Together we are working to expand our robust trade and investment relationship responsibly and to expedite the safe and efficient transport of goods and services across our border. We’ve signed a transformational trade agreement, and are working with investors like you to take on climate change and ensure the health of our environment.
As President Obama said in his Rose Garden remarks with Prime Minister Trudeau, “This visit reflects something we Americans don’t always say enough, and that is how much we value our great alliance and partnership with our friends up north. We’re woven together so deeply — as societies, as economies — that it is sometimes easy to forget how truly remarkable our relationship is.” Well I can certainly say that today’s conference offers ample evidence that we see and experience the value of our shared prosperity. Thank you. We’ve signed a transformational trade agreement, and are working with investors like you to take on climate change and ensure the health of our environment.
As President Obama said in his Rose Garden remarks with Prime Minister Trudeau, “This visit reflects something we Americans don’t always say enough, and that is how much we value our great alliance and partnership with our friends up north. We’re woven together so deeply — as societies, as economies — that it is sometimes easy to forget how truly remarkable our relationship is.” Well I can certainly say that today’s conference offers ample evidence that we see and experience the value of our shared prosperity. Thank you.
