Re: Federal Government Announcement of Consultations Concerning the Canada – U.S. Declaration on a Shared Vision for Perimeter Security and Economic Competitiveness.

March 13, 2011 OPINION

Thank you and good morning. My name is Mark Nantais, President of the Canadian Vehicle Manufacturers Association, representing Chrysler, Ford, General Motors, and Navistar Canada. These companies account for 65% of all vehicle production in Canada and 50% of all vehicle sales.

The auto industry was extremely pleased when Prime Minister Harper and President Obama, last month, jointly announced the Declaration on a Shared Vision for Perimeter Security and Economic Competitiveness. Today’s announcement represents a unprecedented opportunity for industry and all stakeholders to assist in defining an action plan for modernizing the Canada-US border to address future security needs and the competitiveness challenges within our highly integrated Canadian and US economy.

The Canada – U.S. border and this initiative is critically important to Canada’s auto industry for several reasons:

Automotive trade accounts for nearly $100 Billion in two way trade between Canada and the US – that represents almost 20% of total two way trade between the two countries.

Of the 2 million plus vehicles produced annually in Canada, 89% is exported to our primary market – the U.S. Most of that trade in automotive parts and components crosses at the Windsor-Detroit gateway, the busiest border crossing in the world.

The auto industry has a long history of integration. Vehicles and parts are designed, tested and produced nearly seamlessly on both sides of the border for use in either market. As Canadians and Americans, we build cars together!! And in doing so, we employ literally hundreds of thousands of workers on both sides of the border. So border efficiency matters!! The integrated Canada-US automotive industry places greater focus on the transportation network and border issues to ensure its vital just-in time delivery system with its supply chain runs smoothly and efficiently. It is critical to maintaining competitive operations. If any of the over 8,000 parts needed for vehicle assembly that arrive “just-in-time” do not arrive, production stops….and a “down line” costs over $1.5 million per hour in lost revenue.

Every border crossing requires compliance with all regulatory and security requirements imposed by governments. Each carries a compliance costs which are in addition to cost of border delays. CVMA and its companies, along with their US parent companies, have conceived, developed and designed trusted trader programs in partnership with governments for over a decade. Canada – US partnerships have been critical to improving cooperation and setting a path towards improved efficiencies to facilitate trade through low-risk, pre-approval programs such as Partners In Protection (PIP) and Free and Secure Trade (FAST).

Despite the success of these programs new reporting and inconsistent requirements make border crossings more difficult – more difficult than they need to be while still preserving security and facilitating the movement of goods. Similarly, respecting the movement of people, new documentation and visa requirements in both Canada and the US make crossings for business increasingly more complex, especially on short notice.

If we can simplify the border and enhance the benefits of trusted trader programs we can reduce manufacturing uncertainties and assembly costs, directly improving the competitive position of the integrated auto industry.

With today’s announcement, we have the opportunity to eliminate barriers for integrated, low-risk companies and people, harmonize Canadian and US program requirements and assist with deepening economic integration for manufacturing competitiveness. It is an opportunity which we intend to fully embrace, and we look forward to working aggressively with governments to implement an ambitious, strategic, and achievable action plan to enhance the competitiveness of industry Canada overall.

Thank You!