OBAMA MANIA IN CANADA!

What will his Presidency mean for Canada?

President Obama pulled up to Parliament Hill under gray skies, falling snow, with a cheering crowd of about 1,000 people greeting him. A woman along his motorcade route carried a sign that read "Yes we CANada!

Above, young Obama supporters and enthusiasts braved the snow to try to catch a glimpse of the new American President.

Above, Obama meets Canadian Head of State, Governer General Michaelle Jean.

Canada’s enthusiasm for the new President, and concern for Canada-US relations, is well documented.

In late September of last year, a mere two weeks before the Canadians went to the polls, a Globe and Mail survey showed that more than 80% of those polled admitted they would give up their right to vote in the Canadian election, in order to vote in the US election. Moreover, if the US election were held in Canada, 85% of voters would have voted for Obama.

Granted the last election in the US was historic to say the least, nevertheless, I think that says a lot about not only the popularity of Obama in Canada but the growing concern about the direction of US-Canada relations in recent years.

Above, a Canadian Mountie salutes the arrival of US President Barack Obama to Rideau Hall on Thursday.

I don’t think I need to elaborate too much on just how extensive the Canadian-US relationship is.

-Over 1.9 billion dollars in commerce cross the border each day.

-We are each other’s largest trading partner.

-We have the longest peaceful border in the world.

-We have extensive security agreements and military integration encompassing 330 bilateral defense agreements, and 142 bilateral defense forums. In fact, at any given time 250 Canadian soldiers with the maple leaf on their shoulder are training or fighting with American troops.

So, what will the election of the Obama administration mean for Canada? That is what political analysts and enthusiasts have been asking and with Obama’s first foreign visit to Canada today, perhaps some questions have been answered. Or perhaps not…

The big issue many are looking at is of course the economy.

But more intriguing to me has been the “clean energy dialogue” that both the Prime Minister and the President announced at the Press Conference today.


The declaration is a relatively minor step in bilateral co-operation, mostly a promise to continue to discuss and explore the issues together. More surprising however is the theme both leaders have embraced throughout this meeting: that cleaning up the environment can be a profitable of tackling the worldwide economic meltdown.

President Obama campaigned on a promise to wean the U.S. off “dirty, dwindling and dangerously expensive” oil. His administration aims to develop a cap-and-trade system in the United States to deal with greenhouse-gas emissions, similar to the carbon market in the European Union. But in the past, PM Harper’s government has merely said it would explore the idea, the current Canadian climate change framework lags far behind and has much weaker environmental policies.

Has President Obama brought PM Harper on board?

Perhaps PM Harper is finally coming around to the realization that environment and economy are inherently linked. And this is no more evident than in the Canadian-US energy relationship.

Immediately after taking office in January of 2006, Prime Minister Harper committed a five-fold increase in oil sands production. The Alberta Oil-Sands contain roughly 173 billion barrels of oil, the second most in the world after only Saudia Arabia. That’s enough oil to supply the US for 24 years.

The US imports about 780,000 barrels a day from the Canadian tar-sands, roughly 60% of its total production.

Harper defended his stimulation of the Albertan oil industry by arguing how tremendously lucrative and beneficial it would be for Canada.

And sure, Alberta has been one of the wealthiest provinces in Canada for the last decade.

But whether or not you agree with environmentalists claims about the seriousness of climate change (and I would say that you should), any pragmatic economist knows that, as Elizabeth May and Stephane Dion and now President Obama argue, to invest in greener technology now is far better for the long-term competitiveness of the economy.

Harper has thus far pursued regionally preferenced, short-term policies, and if Obama wishes to cut back on US purchases of oil from the tar sands that has tremendous implications for the Albertan economy.

Interestingly enough, alongside this announcement of “clean energy dialogue”, the Globe and Mail announced that for the first time in a decade Alberta has slipped into a recession.

“Falling stock prices and energy revenues have hit Alberta hard, and the debt-free province is now expected to post a $1-billion deficit – its first budget shortfall in 15 years.”

Remember that just last August, government officials were projecting an $8.5 billion surplus for the 2008-2009 fiscal year.

What has been the major cause of the decline?

Economist Andre Plourde says it should come as no surprise that a “resource-based” economy is taking a hit as oil prices have dropped to US$35.

Clearly, Alberta is not an exception to what is going on internationally, but this should serve as a warning to Canada’s leaders to stay away from pursuing single commodity provincial economies.

Hopefully this green dialogue will turn into something more concrete, and the US will not leave Canada in the dust on environmental issues, rather Canada will re-affirm itself as an environmental leader.