Q What is your reaction to the US’s Buy American provision?

A We were very concerned when the Buy American Act first came out, especially the provisions that would have been against Canadian steel and iron, and then they added another provision against other manufactured exports. The [Canadian] prime minister was the first world leader publicly to state very clearly that we expect the US to live up to its trade obligations. We mounted a full-court press at all levels, political, business, academic, to remind Americans about the dangers of protectionism. A few days after that, President [Barack] Obama came out with a statement saying that the Bill would have to live up to the US’s trade obligations and then he put a clause in the Bill to indicate that the US stimulus package could in no way violate its trade agreements. We were somewhat comforted by that. We will stay vigilant. It will be a daily process to make sure that officials in the US do not slide backwards into protectionism. It is a real concern and we will just have to stay on top of it.

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Q How optimistic are you that free trade will be a priority for the Obama administration, especially alongside a quite protectionist US Congress?

A I am cautiously optimistic. President Obama is a student of history and he certainly knows what happened in 1930 in a time of recession when the US launched protectionist legislation. It resulted in worldwide trade walls going up and economies going down, plunging the world into a depression. I think President Obama is very well aware of that and publicly he is stating so. Therefore, we have some degree of confidence that he will hold the line on that.

 

Q Are you also promoting an agenda of openness for investment as well as trade?

 

A Yes, absolutely. In the economic history of Canada we are as prosperous as we are because we are very open to trade. We have put together the right conditions to encourage firms to invest here and to flourish. We are a world leader in everything from aerospace and biotechnology to environmental technologies. We took steps in the budget unilaterally to remove tariffs on machinery and equipment. We are sending the signal that we are open to trade. We believe Canadians can compete anywhere in the world as long as the playing field is level. We intend to keep it level and open in Canada, and we expect that of other countries, too.

 

Q What is your outlook for FDI inflows for this year, because it will be a challenging environment for attracting investment?

 

A It will be challenging, but there are a couple of things going for us. International economic observers continue to point to Canada as having the most stable banking system in the world, so that immediately attracts attention. We know that there will be some decrease in FDI levels, but we want to make sure that we are sending the message that our key sectors are always and will continue to be open for business, whether we are talking about forestry or manufacturing.

Overall, our stimulus package is about 1.9% of our GDP. In addition, we are making it very clear that our goal is to have the lowest overall tax rate on new business investments in G8 countries by 2010, and we are on track to achieve that. We will have the lowest statutory tax rate by 2012. We have reduced again the tax rate on small business. We have extended the 50% accelerated capital cost allowance for another two years and a temporary 100% capital cost allowance depreciation rate that will be on computer-related hardware and software. Thus, we are sending the signal, not just to Canadians but around the world, that we are open for business, open for investment, that we offer stability and we also offer some of the lowest rates of taxation and the most commonsense regulatory regime anywhere in the world. All of this will be attractive to FDI.

 

Q What will be the Canadian government’s approach to dealing with problems in the automotive sector?

 

A We waited to see what kind of shape the US package would take related to the auto industry and then we formulated a proportionate response. Minister of industry Tony Clement, in conjunction with the provinces, produced a package primarily focusing on loan guarantees of about $4bn, which is repayable; we are not just talking about handouts. Along with that, we also have put significant dollars into the supply chain itself. We are making money available to assist in this particular economy. We are letting them know that we will be there in these tough times.

 

Q How do you intend to leverage the Vancouver 2010 Winter Olympics to try to increase Canada’s visibility on the global stage?

A We have been talking about that a lot. Back in 2000-01, when the bid was being prepared, people were thinking that because of the spending that goes into such an event and all the worldwide attention it would overheat the economy, which was already pretty hot at that point. As it has turned out, we have a worldwide economy that is contracting, so investment in the Olympics is coming at a perfect time for us. The hundreds of millions of dollars that go into the construction of the venues themselves, the impact of Canada as a destination being advertised around the world now, up to and even after the Olympics, is huge and very timely. We will be using, for instance, the 150 trade offices that we have around the world as jump-off points for getting the message out that trade with Canada is a good thing to consider. We will aggressively market the Olympic reality and let people know that, just as we have winning conditions for our athletes, we have winning conditions for investors.

 

Q Canada, as in many other places, is concerned with innovation as a driver for investment. In your opinion, how does a country best foster innovation?

A There are a number of measures that we are taking, such as science and technology agreements with other countries; indeed, I signed one about two months ago in Brazil. Research and development and making sure that other countries understand that there can be joint projects that can tap into R&D areas are two key factors in making sure that we are getting that kind of innovative investment and attention. We are pretty aggressive on marketing those agreements. Open-sky agreements in terms of airlines will make sure we are getting to as many countries as possible, as long as there is reciprocity.

 

Q How does immigration policy fit into that? By that, I mean attracting the right amount of talent.

A Under our new immigration minister there has been a radical turnaround, for instance, in process times for visas. For example, I was in India recently, as was our immigration minister, and we were letting the business community there know that we have developed a scheme called Business Express for security-cleared businesses that can now get their visas in 24 hours.

We are also making available a ‘destination without visa’, so if people fly into Canada and are going on to another country and they are using Canada as their clearing-through spot, we have compressed the time so that they either do not have to have visas at all or they can get one quickly. In addition, going back on the technology lever a little, we have compressed the timeline for post-secondary education visas. When it comes to business, research and education, the doors are not only open but we have vastly improved the process times for those visas.

CURRICULUM VITAE

Stockwell Day

 

2008Government of Canada

Minister of international trade and minister for the Asia-Pacific gateway

2006Government of Canada

Minister of public safety

2000House of Commons

Leader of the official opposition

1997Province of Alberta

Treasurer

1986Legislature of Alberta

Representative for Red Deer North