April 26, 2008
CBS MoneyWatch
Microsoft’s drop in profits has investors worried; lawmakers want President Bush to pressure OPEC to increase production; and home mortgage interest rates are rising.
Border Security ‘Dumb’ and Costly, Chamber of Commerce Chief Tells Americans
(Financial Post – Eric Beauchesne)
Americans are shooting themselves and Canadians in the foot with their array of security measures at the Canada-U.S. border, according to the head of the Canadian Chamber of Commerce.
They are not only adding to the costs of doing business across the border, and putting at risk millions of jobs on both sides, but are actually undermining the security of the U.S., Perrin Beatty says in a prepared speech to be delivered Thursday to the North Carolina Technology Association in the state capital Raleigh.
“Indeed, mis-allocating security assets to the 49th parallel can actually make North America less safe, as it takes away badly-needed resources from other priorities,” Beatty said, urging a shift from random searches to a more intelligence-based system of security that used new technologies and systems to identify risky cargo and individuals.
“This approach will be far more effective in finding terrorists or potentially dangerous cargo than random searches or simply spreading the same resources indiscriminately over a much broader base,” he said.
Meanwhile, Beatty said the current border security measures are hurting both Canadian and American businesses, in what is a closely integrated North American economy, while giving offshore competitors a cost advantage.
“For example, automobiles built in North America may cross the border six or seven times in various stages of production, each time attracting costs resulting from compliance or from delays,” he said, adding that those costs add several hundred dollars to the price of a North American made vehicle.
“In contrast, cars imported from overseas attract these costs and delays only once,” he noted.
“This means that, as a direct result of government policy, we are discriminating against products manufactured in North America and in favour of those produced abroad at a time when the North American industrial base is under unprecedented pressure,” he said.
“Economists have a word for this – ‘dumb,’” he added.
A recent report by the Canadian and U.S. chambers of commerce and more than 40 other organizations recommended a string of short-term measures to promote the flow of cross-border traffic, including such basic suggestions as ensuring adequate staffing at border crossings and speedier clearance of pre-certified low-risk shipments and people.
However, the situation is getting worse not better, Beatty said in an interview Wednesday in advance of delivering the speech.
“There are more delays, it’s getting more costly,” he said, noting that line-ups of vehicles trying to cross into the U.S. at one Ontario-Michigan border crossing have gotten so long that provincial authorities had to put up portable toilets on the provincial highway leading to the bridge. Read the complete article.
Americans are shooting themselves and Canadians in the foot with their array of security measures at the Canada-U.S. border, according to the head of the Canadian Chamber of Commerce.
They are not only adding to the costs of doing business across the border, and putting at risk millions of jobs on both sides, but are actually undermining the security of the U.S., Perrin Beatty says in a prepared speech to be delivered Thursday to the North Carolina Technology Association in the state capital Raleigh.
“Indeed, mis-allocating security assets to the 49th parallel can actually make North America less safe, as it takes away badly-needed resources from other priorities,” Beatty said, urging a shift from random searches to a more intelligence-based system of security that used new technologies and systems to identify risky cargo and individuals.
“This approach will be far more effective in finding terrorists or potentially dangerous cargo than random searches or simply spreading the same resources indiscriminately over a much broader base,” he said.
Meanwhile, Beatty said the current border security measures are hurting both Canadian and American businesses, in what is a closely integrated North American economy, while giving offshore competitors a cost advantage.
“For example, automobiles built in North America may cross the border six or seven times in various stages of production, each time attracting costs resulting from compliance or from delays,” he said, adding that those costs add several hundred dollars to the price of a North American made vehicle.
“In contrast, cars imported from overseas attract these costs and delays only once,” he noted.
“This means that, as a direct result of government policy, we are discriminating against products manufactured in North America and in favour of those produced abroad at a time when the North American industrial base is under unprecedented pressure,” he said.
“Economists have a word for this – ‘dumb,’” he added.
A recent report by the Canadian and U.S. chambers of commerce and more than 40 other organizations recommended a string of short-term measures to promote the flow of cross-border traffic, including such basic suggestions as ensuring adequate staffing at border crossings and speedier clearance of pre-certified low-risk shipments and people.
However, the situation is getting worse not better, Beatty said in an interview Wednesday in advance of delivering the speech.
“There are more delays, it’s getting more costly,” he said, noting that line-ups of vehicles trying to cross into the U.S. at one Ontario-Michigan border crossing have gotten so long that provincial authorities had to put up portable toilets on the provincial highway leading to the bridge. Read the complete article.
Three Amigos: Defending NAFTA
(Reuters News)
Leaders from the US, Canada and Mexico all defended the NAFTA deal as good for all parties.Democratic contenders Hillary Clinton and Barack Obama blame the 14-year-old North American Free Trade Agreement for manufacturing job losses. They say the United States could quit the pact unless Canada and Mexico agree to major changes.
April 25, 2008
Canadian Economy Stalling as Exports Hit Hard: Bank of Canada
The Canadian economy has largely stalled as a result of the worsening credit crunch and the slumping U.S. economy that has robbed manufacturers of their traditional market, the Bank of Canada says.
The assessment in the central bank’s quarterly monetary report gives a clearer understanding of what the bank’s governing council was weighing Tuesday when it slashed its key interest rate by half a percentage point to three per cent.
After predicting in January that an upturn would begin this quarter, the bank now says Canada has entered an economic flat spot with growth in the current quarter barely above recessionary levels at a 0.3 per cent annualized rate, and won’t recover fully until 2010.
The bleaker outlook for the economy comes amid other potential bad news for Canadian consumers:
• CIBC World Markets predicted Thursday that national average gasoline prices, now about $1.23 a litre, will top $1.40 this summer and $2.25 by 2012 as crude oil prices continue to soar and reach US$225 a barrel in four years.
• The country’s largest bread maker, Canada Bread Co. (TSX:CBY), warned that consumers can expect to pay more for bread, bagels and other flour-based products after a 32 per cent drop in first-quarter profit amid “significant margin compression due to rising wheat prices.”
But Bank of Canada governor Mark Carney said Canada won’t fall into recession thanks to the relatively strong internal economy buttressed by oil and mineral exports and the record number of Canadians who have jobs.
“The decline in exports ... is counterbalanced and in our view more than counterbalanced by the strong domestic demand,” he said.
Still, Carney noted that the bank will likely have to put more stimulus into the economy over and above the 1.5 percentage points it has cut from the overnight rate since December.
Part of the reason is that tight credit conditions have increased the cost that the chartered banks pay for capital, causing them to pass on only a portion of the central bank’s stimulus to businesses and individuals in the form of lower borrowing costs.
The assessment in the central bank’s quarterly monetary report gives a clearer understanding of what the bank’s governing council was weighing Tuesday when it slashed its key interest rate by half a percentage point to three per cent.
After predicting in January that an upturn would begin this quarter, the bank now says Canada has entered an economic flat spot with growth in the current quarter barely above recessionary levels at a 0.3 per cent annualized rate, and won’t recover fully until 2010.
The bleaker outlook for the economy comes amid other potential bad news for Canadian consumers:
• CIBC World Markets predicted Thursday that national average gasoline prices, now about $1.23 a litre, will top $1.40 this summer and $2.25 by 2012 as crude oil prices continue to soar and reach US$225 a barrel in four years.
• The country’s largest bread maker, Canada Bread Co. (TSX:CBY), warned that consumers can expect to pay more for bread, bagels and other flour-based products after a 32 per cent drop in first-quarter profit amid “significant margin compression due to rising wheat prices.”
But Bank of Canada governor Mark Carney said Canada won’t fall into recession thanks to the relatively strong internal economy buttressed by oil and mineral exports and the record number of Canadians who have jobs.
“The decline in exports ... is counterbalanced and in our view more than counterbalanced by the strong domestic demand,” he said.
Still, Carney noted that the bank will likely have to put more stimulus into the economy over and above the 1.5 percentage points it has cut from the overnight rate since December.
Part of the reason is that tight credit conditions have increased the cost that the chartered banks pay for capital, causing them to pass on only a portion of the central bank’s stimulus to businesses and individuals in the form of lower borrowing costs.
Slow Progress, Frustration Mark SPP Summit
(Embassy – Michelle Collins)
Experts say the North American Security and Prosperity Partnership has become its own worst enemy.
As North American leaders wrapped up the fourth annual Security and Prosperity Partnership leaders’ summit in New Orleans yesterday [Tuesday], concerns over its lack of progress are being raised.
From the business community, in the form of a North American Competitiveness Council report, there was a sense of disappointment in the progress made on priorities, along with a near-urgent call directed at political leaders to strengthen North America’s competitiveness
While the NACC, comprised of representatives from some of the biggest and most powerful companies on the continent, reported that progress has been slow on several of the priorities, such as emergency management, integrating auto sector regulations and the implementation of enhanced driver’s licenses, it described the trilateral framework as essential for all three counties’ economic success.
Despite the frustrations raised, the report concluded by urging a new U.S. administration to continue to seek progress on the SPP priorities and called for cooperation to “turn around public misperceptions” that threaten to make the issue of North American competitiveness largely irrelevant.
In the past couple of weeks leading up the New Orleans summit, the lack of progress being made through this trilateral forum has contributed to a growing debate in Canada about the value of meeting with both the leaders of Mexico and the U.S. to address such a wide range of issues.
While trilateral engagement has its place for discussing common issues such as the environment, the problems of competition, trade and the challenges of the Canada-U.S. border are better suited to bilateral talks, said former Canadian ambassador to the U.S. Allan Gotlieb. With so little achieved on the dozens and dozens of priorities initiated by the SPP, Mr. Gotlieb said, it’s become difficult to bring on any real momentum.
“So admirable as its purpose is, one has to say it’s been quite disappointing in its results,” Mr. Gotlieb said. “Trilateralism should continue, but the Canada-U.S. relationship needs to be reinvigorated by bilaterals, and the flagship for doing that is the prime minister with the president.”
University of Ottawa professor Roland Paris said a lack of momentum for the SPP can be attributed to the lack of an overarching vision, particularly when it comes to the Canada-U.S. relationship.
“Some of the items are useful, the issue of regulatory co-operation, for example,” Mr. Paris said. “But there are larger issues about what the next steps will be for our relations with the U.S. and for North America. Without a vision of a goal to strive toward together, a vision that is driven and articulated by political leaders, this kind of work-a-day agenda is not likely to provide the momentum to move forward.” Read the complete article.
Experts say the North American Security and Prosperity Partnership has become its own worst enemy.
As North American leaders wrapped up the fourth annual Security and Prosperity Partnership leaders’ summit in New Orleans yesterday [Tuesday], concerns over its lack of progress are being raised.
From the business community, in the form of a North American Competitiveness Council report, there was a sense of disappointment in the progress made on priorities, along with a near-urgent call directed at political leaders to strengthen North America’s competitiveness
While the NACC, comprised of representatives from some of the biggest and most powerful companies on the continent, reported that progress has been slow on several of the priorities, such as emergency management, integrating auto sector regulations and the implementation of enhanced driver’s licenses, it described the trilateral framework as essential for all three counties’ economic success.
Despite the frustrations raised, the report concluded by urging a new U.S. administration to continue to seek progress on the SPP priorities and called for cooperation to “turn around public misperceptions” that threaten to make the issue of North American competitiveness largely irrelevant.
In the past couple of weeks leading up the New Orleans summit, the lack of progress being made through this trilateral forum has contributed to a growing debate in Canada about the value of meeting with both the leaders of Mexico and the U.S. to address such a wide range of issues.
While trilateral engagement has its place for discussing common issues such as the environment, the problems of competition, trade and the challenges of the Canada-U.S. border are better suited to bilateral talks, said former Canadian ambassador to the U.S. Allan Gotlieb. With so little achieved on the dozens and dozens of priorities initiated by the SPP, Mr. Gotlieb said, it’s become difficult to bring on any real momentum.
“So admirable as its purpose is, one has to say it’s been quite disappointing in its results,” Mr. Gotlieb said. “Trilateralism should continue, but the Canada-U.S. relationship needs to be reinvigorated by bilaterals, and the flagship for doing that is the prime minister with the president.”
University of Ottawa professor Roland Paris said a lack of momentum for the SPP can be attributed to the lack of an overarching vision, particularly when it comes to the Canada-U.S. relationship.
“Some of the items are useful, the issue of regulatory co-operation, for example,” Mr. Paris said. “But there are larger issues about what the next steps will be for our relations with the U.S. and for North America. Without a vision of a goal to strive toward together, a vision that is driven and articulated by political leaders, this kind of work-a-day agenda is not likely to provide the momentum to move forward.” Read the complete article.
Bush: Anti-trade Message a 'Throw-away Political Line'
(Associated Press)
President Bush criticizes those opposing trade agreements, defending their use. He also blasts the speaker of the House for holding up an agreement with Colombia. The comments came at a meeting with the heads of Canada and Mexico.
McCain Gets Lesson in Free Trade: Area Executives Emphasize Benefits of Forming Pacts
(Milwaukee Journal Sentinel)
It did not take long Wednesday for Sen. John McCain to get a handle on how business executives felt about free-trade agreements.
A day after the all-but-certain Republican presidential nominee announced his plan for economic reforms, he addressed about 300 business people gathered at Bucyrus International, the South Milwaukee manufacturer of mining equipment.
At the event, held in a cavernous facility used to build some of the world’s largest machines, McCain was told that it would be a mistake for the U.S. government to back out of trade deals such as the North American Free Trade Agreement.
Tariffs and protectionist measures would backfire on the United States and hurt U.S. companies engaged in international trade, according to a panel of executives that McCain addressed. “If we don’t have free trade, the decision that we made to stay here in South Milwaukee and triple the capacity of this plant is lost,” Bucyrus CEO Tim Sullivan told McCain.
Worldwide demand for coal and other mined resources has fueled a construction and hiring boom at Bucyrus, which is now several years into an economic upswing that some analysts believe could last for years. Bucyrus spent more than $42 million on expansions and renovations in South Milwaukee in 2007 and has more than doubled its employment since $150 million in expansion plans were announced three years ago.
Bucyrus and its Milwaukee competitor, Joy Global Corp., are part of the fast-growing economies of Asia and eastern Europe. Trade agreements have helped fuel international equipment sales. It would be “absolutely crazy” to dismantle the agreements, Sullivan said.
McCain emphasized his support for NAFTA and said that 50% of the oil used in Wisconsin comes from Canada under the agreement. “Canadian government sources have been quoted as saying if there’s a unilateral renegotiation of NAFTA by the United States, then they would obviously consider their options to send their oil to wherever the highest market value would be,” McCain said.
It did not take long Wednesday for Sen. John McCain to get a handle on how business executives felt about free-trade agreements.
A day after the all-but-certain Republican presidential nominee announced his plan for economic reforms, he addressed about 300 business people gathered at Bucyrus International, the South Milwaukee manufacturer of mining equipment.
At the event, held in a cavernous facility used to build some of the world’s largest machines, McCain was told that it would be a mistake for the U.S. government to back out of trade deals such as the North American Free Trade Agreement.
Tariffs and protectionist measures would backfire on the United States and hurt U.S. companies engaged in international trade, according to a panel of executives that McCain addressed. “If we don’t have free trade, the decision that we made to stay here in South Milwaukee and triple the capacity of this plant is lost,” Bucyrus CEO Tim Sullivan told McCain.
Worldwide demand for coal and other mined resources has fueled a construction and hiring boom at Bucyrus, which is now several years into an economic upswing that some analysts believe could last for years. Bucyrus spent more than $42 million on expansions and renovations in South Milwaukee in 2007 and has more than doubled its employment since $150 million in expansion plans were announced three years ago.
Bucyrus and its Milwaukee competitor, Joy Global Corp., are part of the fast-growing economies of Asia and eastern Europe. Trade agreements have helped fuel international equipment sales. It would be “absolutely crazy” to dismantle the agreements, Sullivan said.
McCain emphasized his support for NAFTA and said that 50% of the oil used in Wisconsin comes from Canada under the agreement. “Canadian government sources have been quoted as saying if there’s a unilateral renegotiation of NAFTA by the United States, then they would obviously consider their options to send their oil to wherever the highest market value would be,” McCain said.
CNN Reality Check: Ethanol & Biofuels
CNN’s Miles O’Brian reports that critics of ethanol question the purported environmental benefits of ethanol, are concerned about its impact on the global food supply, and charge that government subsidies provided to the biofuel industry are motivated more by politics than good economics. “…in Iowa ethanol isn’t just another campaign issue. It’s the cash cow, the golden goose and the fountain of economic youth all wrapped up in one.” Transcript here.
Government of Canada Invests in Ontario’s Biofuels Industry
(Agriculture and Agri-Food Canada)
The Government of Canada is building on its commitments to farmers and the environment by investing $619,117 in four projects that will help Ontario producers participate in the emerging biofuels industry. This announcement was made today [Friday] by David Van Kesteren, Member of Parliament for Chatham-Kent-Essex, on behalf of the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board. "I am proud to be here today to announce support for new biofuels projects here in Port Lambton, as well as Lucan, Seaforth and Parkhill,” said Mr. Van Kesteren. “Investing in these biofuels projects is a win-win for Canadians. It ensures that our farmers can yield better profits and be more competitive today, and for generations to come, and it helps us make a real difference for the environment.”
These projects include determining the feasibility of using non-traditional ingredients such as sweet sorghum and agricultural industry by-products to develop renewable fuels. They aim to boost alternative fuel production and harness new market opportunities for farmers.
“Biofuel production has generated a great deal of interest in the Canadian agricultural sector,” said Kim Turnbull, Agricultural Adaptation Council Chair. “The Agricultural Adaptation Council was pleased to deliver the Biofuels Opportunities for Producers Initiative for Agriculture and Agri-Food Canada. The initiative helped provide producers with the information they need to participate in the biofuels industry.”
These Ontario biofuels projects, funded under the federal government’s Biofuels Opportunities for Producers Initiative, contribute to the profitability, competitiveness and overall success of the Canadian agriculture sector while also determining the potential of alternative fuel production in Ontario.
In addition, to jumpstart the development and production for the next generation of renewable fuels in Canada, the Government of Canada has provided $500 million to the NextGen Biofuels FundTM. It will assist farmers and rural communities in seizing new market opportunities through biofuels and bioproducts initiatives.
To support the development of Canada’s biofuels industry, the federal government has committed to investing $2.2 billion over nine years.
The Government of Canada is building on its commitments to farmers and the environment by investing $619,117 in four projects that will help Ontario producers participate in the emerging biofuels industry. This announcement was made today [Friday] by David Van Kesteren, Member of Parliament for Chatham-Kent-Essex, on behalf of the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board. "I am proud to be here today to announce support for new biofuels projects here in Port Lambton, as well as Lucan, Seaforth and Parkhill,” said Mr. Van Kesteren. “Investing in these biofuels projects is a win-win for Canadians. It ensures that our farmers can yield better profits and be more competitive today, and for generations to come, and it helps us make a real difference for the environment.”
These projects include determining the feasibility of using non-traditional ingredients such as sweet sorghum and agricultural industry by-products to develop renewable fuels. They aim to boost alternative fuel production and harness new market opportunities for farmers.
“Biofuel production has generated a great deal of interest in the Canadian agricultural sector,” said Kim Turnbull, Agricultural Adaptation Council Chair. “The Agricultural Adaptation Council was pleased to deliver the Biofuels Opportunities for Producers Initiative for Agriculture and Agri-Food Canada. The initiative helped provide producers with the information they need to participate in the biofuels industry.”
These Ontario biofuels projects, funded under the federal government’s Biofuels Opportunities for Producers Initiative, contribute to the profitability, competitiveness and overall success of the Canadian agriculture sector while also determining the potential of alternative fuel production in Ontario.
In addition, to jumpstart the development and production for the next generation of renewable fuels in Canada, the Government of Canada has provided $500 million to the NextGen Biofuels FundTM. It will assist farmers and rural communities in seizing new market opportunities through biofuels and bioproducts initiatives.
To support the development of Canada’s biofuels industry, the federal government has committed to investing $2.2 billion over nine years.
April 24, 2008
Small Businesses Prove to Be Resilient Despite Difficult Market Conditions
(Business Development Bank of Canada)
Drawing on data from its loan portfolio and its experience with its 27,000 entrepreneur clients, the Business Development Bank of Canada (BDC) has found that to date small business is generally managing to cope with the effects of a strong Canadian dollar and turbulence in the financial markets. This is one of the conclusions BDC reaches in the first issue of its new Entrepreneurial Insight newsletter.
"Small businesses and especially manufacturers make up much of BDC's loan portfolio. Thus the state of our portfolio could be a good barometer of the health of SMEs and the Canadian economy," says Jérôme Nycz, Vice President, Strategy & Planning. "Our loan portfolio is relatively stable and solid. The number of clients having temporary or permanent difficulties in repaying their loans remains low and has changed very little in the past three years. Although 2008 is far from over and we are continuing to monitor the situation closely, so far we have seen that entrepreneurs are very resilient and most can adjust to market conditions."
However, BDC has also found that market conditions are having more impact on manufacturers. Nearly half of the BDC loans that have deteriorated (i.e. are unlikely to be repaid) were granted to manufacturers. Manufacturing exporters, particularly those whose exports to the United States make up 40% or more of their sales, are the most vulnerable.
“SMEs that moved into export markets in recent years were betting on the proximity and ease of trading with the United States,” Mr. Nycz explained. “Because of their generally lower productivity, the rapid increase in the value of the Canadian dollar and fierce global competition, SME manufacturing exporters who relied too heavily on the U.S. market are suffering the consequences today.”
Although they account for only 4.2% of Canadian SMEs, manufacturers make up 26% of BDC’s clients. To help them adjust to market conditions, BDC recently offered its eligible clients the option of postponing principal payments on their loans for six months.
”We know that manufacturers who navigate through these difficult waters successfully are those that have developed clear business strategies so that they are ready to seize opportunities on national and international markets. By offering them this financial respite, we wanted to give our entrepreneur clients the leeway they need to review their business plans and export strategies and look at ways to improve productivity,” Mr. Nycz explained.
Drawing on data from its loan portfolio and its experience with its 27,000 entrepreneur clients, the Business Development Bank of Canada (BDC) has found that to date small business is generally managing to cope with the effects of a strong Canadian dollar and turbulence in the financial markets. This is one of the conclusions BDC reaches in the first issue of its new Entrepreneurial Insight newsletter.
"Small businesses and especially manufacturers make up much of BDC's loan portfolio. Thus the state of our portfolio could be a good barometer of the health of SMEs and the Canadian economy," says Jérôme Nycz, Vice President, Strategy & Planning. "Our loan portfolio is relatively stable and solid. The number of clients having temporary or permanent difficulties in repaying their loans remains low and has changed very little in the past three years. Although 2008 is far from over and we are continuing to monitor the situation closely, so far we have seen that entrepreneurs are very resilient and most can adjust to market conditions."
However, BDC has also found that market conditions are having more impact on manufacturers. Nearly half of the BDC loans that have deteriorated (i.e. are unlikely to be repaid) were granted to manufacturers. Manufacturing exporters, particularly those whose exports to the United States make up 40% or more of their sales, are the most vulnerable.
“SMEs that moved into export markets in recent years were betting on the proximity and ease of trading with the United States,” Mr. Nycz explained. “Because of their generally lower productivity, the rapid increase in the value of the Canadian dollar and fierce global competition, SME manufacturing exporters who relied too heavily on the U.S. market are suffering the consequences today.”
Although they account for only 4.2% of Canadian SMEs, manufacturers make up 26% of BDC’s clients. To help them adjust to market conditions, BDC recently offered its eligible clients the option of postponing principal payments on their loans for six months.
”We know that manufacturers who navigate through these difficult waters successfully are those that have developed clear business strategies so that they are ready to seize opportunities on national and international markets. By offering them this financial respite, we wanted to give our entrepreneur clients the leeway they need to review their business plans and export strategies and look at ways to improve productivity,” Mr. Nycz explained.
Consumer Protection Won’t ‘Go Too Far’ and Slow Down Imports, Clement Says
(Canwest News Service – Sarah Schmidt )
Health Minister Tony Clement Tuesday tried to assure jittery importers not to worry about the government’s proposed consumer-protection law, saying it will be business as usual at the border.
Speaking to members of the Canadian Association of Importers and Exporters in Mississauga, Ont., he said, “going too far would result in cumbersome, border-clogging, investment-choking regulation that would reduce Canada’s access to those new, innovative products that are being created around the world.”
“I’m here to say that border clearance will not be affected by this bill at all. Inspections will continue being done as they are now – according to a strategic risk assessment approach administered by the Canada Border Services Agency.”
The system allows border officials to target higher risk products flagged by government agencies, including Health Canada and the Canadian Food Inspection Agency, based on past violations.
The proposed legislation, to be debated in Parliament next week, includes an unprecedented blanket ban on the importation and sale of consumer products that pose a danger to human health or safety.
Penny Bonner, senior partner at the law firm Ogilvy Renault and a specialist in product recalls and government enforcement actions, said Clement’s message to business leaders suggests the government realizes the proposed legislation overreaches.
“I’m taking a positive interpretation of that message – that perhaps they were much more far-reaching than they intended to be. There are lots of opportunities for amendments to restrict the legislation to give assurances to retailers that they don’t have to test the safety of every product before they put it on their shelves.”
But despite Clement’s reassuring words, Bonner said some of her corporate clients still have much to worry about.
If passed in its current form, manufacturers, importers and retailers will have to report any incidents or defects – including “near-misses” – to the minister within two days, if there is a reasonable expectation of serious adverse effects on consumer health or safety. Bonner, based in Montreal, said these timelines are unworkable.
“What’s more of a concern are the powers granted to inspectors,” Bonner added. She said inspections can be conducted without reasonable grounds, while stop-sale orders can only be appealed to the minister. “We do need good consumer protection legislation, but we think we need to do it properly,” she said.
Jack Smith, president of the Canada Safety Council, said Clement’s message to importers is a “little disingenuous.” “He’s talking about inspections as they’ve always been done, but he’s also talked about stepping up inspections. If it’s not going to be at the border, where is it?” said Smith.
When Clement unveiled the new legislation a few weeks ago, he acknowledged having only 40 inspectors at Health Canada’s consumer-safety branch is “unacceptable.”
Smith pointed out toxic toys cross the border under the current strategic risk assessment approach at Canada Border Services Agency.
So far, Health Canada has announced 25 voluntary recalls of children’s products this year – including Hillbilly Teeth, recalled on Tuesday for illegal levels of lead in the surface paint of the teeth. The product, manufactured in China, was on the market in Canada between March, 2005 and March, 2008.
Results from Health Canada’s product-safety laboratory show how common it is for dangerous products to slip across the border. In the last two years, the targeted testing of 205 samples of suspicious children’s jewelry pieces identified 120 illegal products. The most egregious case was a jewelry item containing 92%, suggesting the jewelry was made from lead-acid batteries for cars and other lead scraps.
Health Minister Tony Clement Tuesday tried to assure jittery importers not to worry about the government’s proposed consumer-protection law, saying it will be business as usual at the border.
Speaking to members of the Canadian Association of Importers and Exporters in Mississauga, Ont., he said, “going too far would result in cumbersome, border-clogging, investment-choking regulation that would reduce Canada’s access to those new, innovative products that are being created around the world.”
“I’m here to say that border clearance will not be affected by this bill at all. Inspections will continue being done as they are now – according to a strategic risk assessment approach administered by the Canada Border Services Agency.”
The system allows border officials to target higher risk products flagged by government agencies, including Health Canada and the Canadian Food Inspection Agency, based on past violations.
The proposed legislation, to be debated in Parliament next week, includes an unprecedented blanket ban on the importation and sale of consumer products that pose a danger to human health or safety.
Penny Bonner, senior partner at the law firm Ogilvy Renault and a specialist in product recalls and government enforcement actions, said Clement’s message to business leaders suggests the government realizes the proposed legislation overreaches.
“I’m taking a positive interpretation of that message – that perhaps they were much more far-reaching than they intended to be. There are lots of opportunities for amendments to restrict the legislation to give assurances to retailers that they don’t have to test the safety of every product before they put it on their shelves.”
But despite Clement’s reassuring words, Bonner said some of her corporate clients still have much to worry about.
If passed in its current form, manufacturers, importers and retailers will have to report any incidents or defects – including “near-misses” – to the minister within two days, if there is a reasonable expectation of serious adverse effects on consumer health or safety. Bonner, based in Montreal, said these timelines are unworkable.
“What’s more of a concern are the powers granted to inspectors,” Bonner added. She said inspections can be conducted without reasonable grounds, while stop-sale orders can only be appealed to the minister. “We do need good consumer protection legislation, but we think we need to do it properly,” she said.
Jack Smith, president of the Canada Safety Council, said Clement’s message to importers is a “little disingenuous.” “He’s talking about inspections as they’ve always been done, but he’s also talked about stepping up inspections. If it’s not going to be at the border, where is it?” said Smith.
When Clement unveiled the new legislation a few weeks ago, he acknowledged having only 40 inspectors at Health Canada’s consumer-safety branch is “unacceptable.”
Smith pointed out toxic toys cross the border under the current strategic risk assessment approach at Canada Border Services Agency.
So far, Health Canada has announced 25 voluntary recalls of children’s products this year – including Hillbilly Teeth, recalled on Tuesday for illegal levels of lead in the surface paint of the teeth. The product, manufactured in China, was on the market in Canada between March, 2005 and March, 2008.
Results from Health Canada’s product-safety laboratory show how common it is for dangerous products to slip across the border. In the last two years, the targeted testing of 205 samples of suspicious children’s jewelry pieces identified 120 illegal products. The most egregious case was a jewelry item containing 92%, suggesting the jewelry was made from lead-acid batteries for cars and other lead scraps.
April 23, 2008
CNN-Lou Dobbs: New Orleans SPP Talks
A harsh critic of NAFTA and the Security and Prosperity Partnership (SPP), as well as the purported “North American Union” (NAU), CNN pundit Lou Dobbs reports on the talks being held in New Orleans between the leaders of the US, Canada and Mexico.
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