Marta Leardi-Anderson, Executive Director, Cross-Border Institute
Laurie Tannous, Special Advisor, Cross-Border Institute
In response to the COVID-19 crisis, the governments of Canada and the United States agreed to a set of temporary and reciprocal border restrictions. The March 20 agreement was initially for one month but has been extended for a second time to June 21. The agreement does not limit freight crossings by trucks and other modes. Crossings by people, however, is limited to essential workers, including health care workers and truck drivers, who cross the border for work purposes on a regular basis. This implies hardships for people with loved ones across the border and headaches for cross-border business. Tourism and most shopping trips are off the table.
“The challenges are daunting, so we need to start finding solutions now. Otherwise, the movement of people across the Canada-US border could be severely restricted for years, with negative long-term consequences for the Canadian economy.”
The rationale for border restrictions is clear, although there is some debate among experts about their relative effectiveness. Given the higher infection rates in the US, a quick return to pre-pandemic border rules would have little popular support in Canada. Lifting border restrictions under any circumstances faces political headwinds in the US.
There is an emerging realization that the pandemic will likely last months or even years beyond the initial peak. The catastrophic economic consequences of maintaining the current lockdown for such a long time implies a new urgency to resume economic activities safely. Factories, warehouses and other workspaces must be redesigned and retrofitted. Retail, educational and recreational activities must be done differently. Providing safer transportation by air, rail and public transit will be difficult. In the midst these challenges, the resumption of personal mobility across the Canada-US border may rate a low priority. Worse yet, it may be regarded as a dangerous luxury that we cannot afford. This would be a mistake.
“In the midst these challenges, the resumption of personal mobility across the Canada-US border may rate a low priority. Worse yet, it may be regarded as a dangerous luxury that we cannot afford. This would be a mistake.”
Canada has benefited from access to the US economy through a relatively efficient border. Because Canada is closer to the US than are most other countries, Canadian companies can deliver goods to US buyers at lower cost and American tourists can easily access Canadian attractions. But the Canada-US economic relationship is not just about serving consumers. The huge volume of Canada-US trade reflects the integration of supply chains across the border in industries like automotive, agri-food, aerospace and defence. The recent Canada-US border agreement permits movement of freight in supply chains. But free movement of freight is not enough.
The relationship between supply chain partners is more intense than the conventional relationship between buyer and seller. If one partner fails to perform, failure cascades through the entire supply chain. This intense relationship depends on qualities that arise from direct personal interaction, notably communication, familiarity and trust. For this type of interaction, people need to cross the border.
This is not just important for traditional industries like automotive. The mobility of businesspeople is as important, if not more important, for fast growth sectors. Trade in services, which is the frontier of international trade, is highly dependent on cross-border travel. Canada’s burgeoning tech clusters need to cross-pollinate with clusters in the US and around the world through the movement of people.
“Trade in services, which is the frontier of international trade, is highly dependent on cross-border travel. Canada’s burgeoning tech clusters need to cross-pollinate with clusters in the US and around the world through the movement of people.”
Skype, Zoom, Microsoft Teams, Google Meet and others allow us to exchange information without transmitting pathogens. They have been life savers over the weeks of the lockdown, but they are only partial replacements for physical interaction. Firms in supply chains coordinate through intimate knowledge of their partners’ operations, often visiting each other’s facilities. A Canadian consultant cannot effectively offer business services in the US or any other country unless they have been on the ground, understanding the needs and culture of their clients. Techies still generate innovations through intense face-to-face interaction. If physical presence didn’t matter, why would we have incubators, accelerators or even the MaRS Discovery District? The point is that being there still matters, and for Canadian business, being there often means crossing the border.
What is the path to easing and ultimately eliminating border restrictions, without endangering public health? Clearly, it cannot be a matter of choosing a date and declaring that the border will return to pre-pandemic operation. The conditions that precipitated the border restrictions in the first place are not going to disappear. While there is some convergence of infection rates between Canada and the US, conditions may change rapidly with succeeding waves of the virus. Also, the border is a workplace where the health of border service officers, food inspectors and others must be protected.
Most people cross between Canada and the United States at land crossings, not airports. Screening at land borders must occur in an environment with long queues of vehicles at primary inspection lines. As with most border functions, the best approach is to screen away from the border and then find a secure mechanism for conveying results to the officer who makes the clearance decision.
“Being there still matters, and for Canadian business, being there often means crossing the border.”
Innovations such as immunity passports and contact tracing apps hold promise, but still face technical and ethical challenges. Neither will be available for use at the border before they are accepted for use domestically. The blockchain-based Known Traveler Digital Identification (KTDI) soon to be piloted in airports in Canada and the Netherlands, may be a useful way to convey results of tests to border officials while preserving the traveler’s control over personal data. Valuable lessons can be learned from effective programs implemented in other countries.
The challenges are daunting, so we need to start finding solutions now. Otherwise, the movement of people across the Canada-US border could be severely restricted for years, with negative long-term consequences for the Canadian economy.