Thank you all. I'm glad that not too many of you are Canadians. We have a mandate as diplomats in the United States to be reaching out to Americans. We're always happy to talk to Canadians, but some balance is appropriate. This is University Day for me. I was at Western. I didn't know it was Western. I thought it was the University of Western Michigan until they told me this morning that it's Western, much as the University of Western Ontario is Western. I guess it's something about universities that have Western in their title. In any event, in their name, they think very fondly of the University of Michigan, of course, and I'm sure they're all cheering for the Wolverines and will be doing so on on Sunday. My territory, I should say, covers Michigan, Ohio, Indiana and Kentucky, probably constituting a quarter, almost a quarter of the NCAA tournament participants. So at a certain point, I could get conflicted, but against the Blue Devils, no problem at all. I'm all on side, and I'm hoping that Michigan advances far. If you end up playing Ohio State, I might secretly be hoping for the Wolverines, but I probably will have to keep that to myself. Simon had asked me the title of this presentation, Economic Leadership for Sustainable Growth, came about in a rather unusual, not very logical or rational way. Simon had asked me for a title, pressed me a little bit because you needed to publicize this event, and that was, I don't know, two months ago, six weeks ago, I wait too early to be thinking about this because this was going to be at the end of March. I was hoping that the Canadian budget would, by that time, have been presented, as in by the time of this lecture, and that I might simply have read it into the record, and that would have sufficed. Ian Clark knows all about budget making and the essential wisdom inherent in budgets, but I'm not that lucky it will be presented only next Tuesday, if at all, I think probably next Tuesday, and instead I have to wing it. So not being an expert, it might have been better to have participated in this last year. Rachel tells me that, Rachel, whom I know from the Canadian Embassy when she was in the Congressional and Legal Affairs section, and I was there with some different set of responsibilities, she tells me that last year you focused on borders and trade, and I actually know something about borders and trade, or at least pretend to. It's kind of obligatory in my job that you have to let on, that you know something about borders and trade. I don't, by contrast, have to know anything about human capital development, at least from the point of view of government policy in that regard, and I know even less about pharmaceutical R&D and less still about urban growth and so on. So I'm not, finding an overarching title for this was not easy, and economic leadership for sustainable growth struck me as perhaps being sufficiently vague that it would allow me to talk about just about anything. I'm going to address human capital development, because you asked me to, and I'm earnest in that regard, but you should know that this is not a subject that the Canadian government, for the most part, engages the United States government on. It is a matter of domestic policy, for the most part. We don't have a Canadian ask. There aren't issues between our two countries from the point of view of policies that we would like the United States to pursue, or vice versa. So we don't intervene on those issues, and one is left as a result a little bit at sea. You might therefore quickly conclude that this lecture doesn't hang together very coherently. If I see people starting to stream out of the room as a result, I'll bring it to a merciful close, and we can get on early to the reception. But I do want to thank Dr. Collins for coming and for speaking at the outset, and Simon for your very generous introduction. I'm not normally called a senior diplomat. I waft in and out of our Foreign Service with some frequency, and so have not been three postings, all of them in the United States, all of them to which one could drive from Ottawa, which is not why most people join the Foreign Service. But from my point of view, and my colleagues in the Foreign Service don't share this, most of them, there's only one relationship for Canada that really matters. The relationship with the United States is so disproportionately, overwhelmingly important to Canada that it's the one I've been interested in being involved with on the basis that when you are, there are, and Ian Clark knows this one well, there is no shortage of folks back home who are interested in your analysis and what it is you have to say, whereas when you're posted in most parts of the world as a Canadian diplomat, periodically something happens that's important, but not necessarily routinely does something happen. That's my take. We can discuss it during questions. I'll address human capital development, some other themes as well. I'll smuggle some promotional material that's promotion of Canadian interest, not self-promotion, into what it is I have to say, and I'll talk about some issues that are dearly important to us in the Consulate General in Detroit because that's our bread and butter. It is what we're paid to do. First and foremost among those is the proposed new international trade crossing of the Detroit River. I've been on a bit of a tour of Michigan. Having started this job, as Simon said, only in September, I've been touring the four states that I have responsibilities for Canadian interest in, but overwhelmingly have been touring Michigan, have now been to, it seems, every hamlet in this state. I'm getting to know it extremely well. They were quite surprised in Marquette when I showed up in February, the day as it happens after, the day that the President was there, in fact, but my visit was announced first. We, Canada in general and our consulate in Detroit, no matter all of our consulates across the United States, do a lot to promote and encourage educational exchange and partnership, mutual recognition of educational credits and the like between Canada and the United States. This mostly happens obviously at the post-secondary level. Nearly 10,000 Americans study in Canada. About 30,000, as of 2009 anyway, were studying, Canadians were studying in the United States, not including those on short-term exchanges. In recent years, the real growth in those numbers had been in Americans studying in Canada. We'll see how sustainable that proves to be as the Canadian dollar continues to appreciate. By way of digression, I did live in downtown Toronto and got to know Pam Bryant a little bit in the government of Ontario for six years from 2000 to 2006. It is a highly stimulating environment, one that I love dearly. I haven't yet lived in Ann Arbor, but would be quite content to do so at some point in my life. Just walking around today, that notion was reinforced for me. I have absolutely no difficulty in comprehending why you folks are traveling back and forth between the two cities. Some numbers, I'm a numbers person, so bear with me, that I think are important or at least significant pertaining to human capital development. Canada is number one in the OECD in higher education achievement, meaning a greater percentage of Canadians attain some college or university education than in any other OECD country. We're second only to Japan, and a very close second at that in student math and science scores. We're at the top of the UN Human Development Index. In the G7, we're second only to Japan in life expectancy at birth, life expectancy being one critical measure of human capital. We're best among the G7 countries in Gallup's global well-being index, and in various other indexes, Ann Holt Roper, IMD, we rank, Canada ranks as the best place to live, invest, or do business. Now these things are important, I would argue, because increasingly outcomes matter to governments and to taxpayers, measurable outcomes. Resources are scarce, they're scarce everywhere. After an almost 25-year fling with annual, often growing, deficits, beginning early in the Piatrudo years and ending in the relatively early Crescia years, Canadians increasingly insist that government lives within its means, at least the federal government in Canada, and they're insisting that governments spend in agreed areas of priority. Those priorities, more and more, are dictated by the measurability of outcomes, call it return on investment. Investing in the human capital of those with limited skills, as Craig Riddell writing for Canada's Institute for Research on Public Policy put it, has become a key component of social and economic policy. Government aims to facilitate individual adjustment to structural economic change. Education has thus become an important mechanism for promoting equality of opportunity and social mobility. In Canada, as in the United States, education and skills training is primarily delivered and paid for by subnational jurisdictions. In the U.S., a much larger share of post-secondary education is paid for privately than is the case in Canada. Significant resources are transferred by the government of Canada to provinces and territories for the purpose, specifically for the purpose as well as through equalization, and the government in its last budget in 2010 pledged that it would not cut transfers to individuals or to other levels of government. The last budget, the 2010 one in the late winter, early spring, was delivered in the second year of the government of Canada's stimulus spending program. It provided 19 billion dollars in new stimulus. One billion of that, in other words five percent, was directed to enhance training opportunities for Canadian workers. The Canada Student Loans Program, our equivalent of US Pell grants, provides approximately 400,000 students with loans and grants. I should say for Americans in the room, when you hear these numbers, if you think they're pitifully small, multiply them by 10 because federal spending in Canada is about one-tenth of what it is in the United States, just as our population is, I guess now about one-ninth of what it is in the United States. In 2009, responding to the recession, the government of Canada launched the Apprenticeship Completion Grant, building on a program already in place called the Apprenticeship Incentive Grant. The goal is to encourage individuals to finish their apprenticeship training and get their journeyperson certification in a designated Red Seal trade. Nearly 35,000 apprenticeship completion grants had been issued as of November of last year, as well as over 177,000 apprenticeship incentive grants. Now, while Canadian unemployment never spiked during the recession to the extent that it did in the United States, it's still high, too high by anyone's standards at 7.8%. One of the government's responses in the 2009 budget was to provide an additional $1 billion over two years for employment insurance training programs, and the government invested another $500 million over two years to support the training needs of individuals, whether or not they qualify for employment insurance. Then there's the Knowledge Infrastructure Program. Under its Economic Action Plan, the government has invested heavily in the construction and renovation of facilities at universities and community colleges in Canada, better preparing students for the jobs of tomorrow. Apart from these examples of direct funding, the government of Canada extensively supports the funding of education, K through 12, as well as in colleges and universities. In non-stimulus years, it's safe to say that proportionate to population, Canadian federal government transfers to provinces and territories in support of education are significantly greater than U.S. federal government spending through the Department of Education. The U.S. Department of Education's budget in 2010, as I recall, is about $47 billion. Another reality that bears emphasis, whereas total spending at senior levels of government in the United States is roughly split two-thirds federal government, one-third state governments. In Canada, it's much closer to 50-50, meaning that taxing and other revenue-raising powers and capabilities are also closer to being evenly divided in the United States or in Canada, that is, than in the United States. This matters in an area like human capital development education, because it means, one hopes, that the governments with greatest responsibility for providing the service are also relatively more equipped to meet their responsibility in a sustainable way. Sustainability, again, is part of my theme today. It's a word that's been applied a lot in reference to the environment. It equally applies, in my view, to economic management. Canada learned this the hard way. I referred earlier to more than 20 consecutive years of federal government deficits in Canada. While we're a strongly contributing member of the world's most powerful economic groupings, the G20, Canada cannot, by itself, set international standards for fiscal propriety. Today, very few countries can. In the mid-1990s, Canada's fiscal situation was bleak. Our federal government deficit crept above 8% of GDP. Our debt to GDP ratio was 102%. In the U.S. in 2010, by way of comparison, the deficit was just shy of 9% of GDP. Our bond ratings were in serious jeopardy, meaning the price we would pay to borrow was about to become quite arduous. At the time, approximately $1 out of every four spent by the federal government was for interest on the national debt, and trends were altogether in the wrong direction. The Caysian government, I think it's safe to say, did not come to office naturally disposed to slash government. Doing so certainly wasn't part of their 1993 election platform, but faced with growing international pressure and blessed with a historically unprecedented and distinctly fortuitous parliamentary configuration, at least from the government's perspective when dealing with fiscal management issues were concerned. Prime Minister Caysian and Finance Minister Martin hacked away at government spending, cutting at 10% in just two years. Public service employment was 14% less after these actions than it was before, meaning approximately 45,000 government jobs were cut. All kinds of government programs were eliminated or cut. Human capital development programs suffered too. Transfers to provinces were frozen or grew less than anticipated. This was a brutal time. It took about three years. It seemed like it was taking a great deal of time at the time. In hindsight, three years to write the ship really isn't very long. By 1997, the federal government was in budgetary surplus, and for the ensuing 11 fiscal years, ending only with the great recession of 2008-9, Canada ran national fiscal surpluses. This was achieved as an article in the Washington Post last May called the Great Right North said overwhelmingly by adjustments on the spending side. In other words, the Canadian government of the day resisted whatever temptation there might have been to address the problem by significantly raising taxes. It concluded that taxes were already too high, both in absolute terms and more consequentially relative to taxation rates in the United States. The current government in office since 2006 resolved early on to make Canada more competitive by reducing taxes. On the corporate side, the objective was to achieve a blended federal provincial rate of 25% by 2012 compared to approximately 39% in the United States. The second last step toward that goal was achieved on January 1st of this year, when the federal corporate tax rate in Canada fell from 18% to 16.5%, and the goal will be achieved on schedule when federal corporate taxes fall next January to 15%. As a history lesson, perhaps all of this is interesting or maybe not. I'm not saying that our circumstances and our response to them constitute a lesson for any country, but elements of this story may have near universal applicability. Canada is running a deficit again today. Barring an unanticipated global reversion to recession will be back in surplus within two fiscal years. We have today by far the lowest debt-to-GDP ratio of any G7 country, which means that when interest rates go up, they after all can't stay at 0% to 1% forever, we more easily than some will be able to bear the impact on the fiscal framework. Our national pension plan, which actually is two plans since Quebec has its own, is actuarially sound. It's a little less generous than U.S. Social Security, but rates were adjusted in the 1990s to put it on a sustainable footing. Accordingly, unlike other countries, that's not going to be a public policy pressure point for Canadian governments in the future. So actually we're in pretty good position to continue to make the kinds of investments in human capital and other programs going forward that are essential if the future is to be secured. Relative to most G8 countries, our population is young. Like the United States, we are a country of immigration. In fact, a significantly larger percentage of our overall population immigrates legally to Canada each year than is the case for the United States. In other words, we are renewing ourselves, and governments acting prudently have positioned Canada to be able to respond to the needs of that growing population sustainably. One of the themes that you asked or that you're addressing in your sessions tomorrow is Canada U.S. business climate, for lack of a better term. I should have paid more attention to the agenda. I think this is probably an appropriate place in my remarks to touch on that theme, since business activity and the jobs that business either sustains or creates are integral to a country's ability to afford its desired quality of life and its ability to sustain critical investments into the future. The Economist Intelligence Unit ranks Canada as the best G7 country in which to do business. I've already cited tax rates. They're an important factor, but they're only one factor. And I've cited educational achievement. It's another. The Vice-Chairman of General Electric in the United States observed recently that talent trumps taxes when his company takes investment decisions. Just weeks ago, GE announced another major investment in Canada, bringing their total employment in my country to $8,000 on revenues of approximately $6 billion Canadian. GE has clearly decided that in addition to attractive tax rates, we offer the talent that it considers to be essential. We've done other things in the policy area to make Canada attractive. The best research and development tax credits in the G7 for one, I'll come back to those in a few moments when I talk about the pharmaceuticals industry. We're also active on the trade policy side. Last year, Canada unilaterally eliminated all tariffs on imported machinery and on manufacturing outputs, putting us on track to be the first G20 country that's a tariff-free zone for manufacturers. Free trade agreements are another important contributor to a vibrant business climate. The U.S.-Canada free trade agreement has fostered a three-fold increase in trade in the 21 years that it's been in operation. Then there was NAFTA. We've also negotiated and implemented free trade agreements with Costa Rica, Chile, Israel, Peru, the European free trade area, the AFTA countries, and Colombia. FTAs have been signed with Panama and Jordan. Negotiations towards finalizing one have been relaunched with South Korea. Talks have begun with Singapore, the Dominican Republic, Ukraine, the Karakam countries, the Central American Four, and India, and conversations have recently opened with Japan. Beyond those, and I think unquestionably most significant since the completion of NAFTA, Canada is down to the short strokes in negotiating a free trade agreement with the European Union. If successful, my country will become an even better platform from which to do business. Free trade agreements with the U.S. and the E.U. would place us at the pinnacle of business opportunity. You already know some of the supporting data. Canada was the first G7 country to emerge from recession. In terms of lost growth, the recession hurt us less than any of our G7 partners. Our growth this year could slightly lag the United States, but that's principally because the U.S. came out of recession later. The commodities we produce, for which the world seems to have a consistently high demand, contributed enormously to our relative stability during these tumultuous times. Our energy sector, Prime Minister Harper has described Canada as an emerging energy superpower, is experiencing rapid growth. Upwards of $100 billion will be spent in new development of the Canadian oil sands over the next four years. In addition to the employment impacts in Canada, which are clearly considerable, that expansion will create more than 340,000 jobs in the United States, more than 10,000 of those right here in Michigan. Continuing on business climate matters for a moment, one of the differences in national policy that affects our respective business climates is the provision of healthcare services. At least, it has been a difference. The difference may be narrowing, or perhaps it won't. It's very difficult to tell. Watch this space. As of today, there are three, at least three, in my view, significant implications to the different ways in which our two countries provide healthcare. First, it used to be said that due to healthcare costs alone, automobile assemblers could manufacture a car for $1,500 less in Canada than in the United States. Now by virtue of the bankruptcy of two of the Detroit three automotive companies, that may no longer be the case. At GM and Chrysler, which I should point out, were salvaged by three governments, the government of the United States of America, the government of Canada, and the government of Ontario, healthcare responsibilities have largely shifted to the unions. However, for other manufacturers, a Canadian healthcare costs related advantage definitely continues to pertain. Secondly, it used to be the case that the U.S. labor market was much more mobile than the Canadian one. Americans went to where the job opportunity was. Canadians stayed home and collected unemployment insurance, or at least that was the lower, the stereotype. It wasn't completely true, but there seems to have been a fundamental shift in the United States, provoked in part by the cost of health insurance. Increasingly, Americans are reluctant to leave their jobs to take another one. Healthcare benefits, part of their employment compensation package, effectively tie a lot of Americans to their current employment. Canadians haven't necessarily become more adventurous when it comes to striking out, but we do know that we can take a job anywhere in our country and that our families will enjoy pretty much the same quality of healthcare they received where they used to live, because access to healthcare is in no way linked to employment. Thirdly, human capital again. Why does the average Canadian live three years longer than the average American? It's not because fewer of us slip on the ice and break our backs. It's got to be at least in part because of access to primary healthcare on a preventative basis, prenatal until one's senior years. Now, obviously healthcare issues can be considered in many different ways. I chose to do so here in the business climate context simply because healthcare isn't normally looked at that way. In terms of sustainable economics, the fact that the total bill in Canada for healthcare hovers around 10% of gross domestic product, while in the United States it's about 17% of GDP, could have a bearing on public policy priorities and options going forward. I should point out that healthcare, like human capital development, is not an issue of official bilateral debate between our two governments. Basically, each of our populations has the right to settle upon the model that best suits us without interference from any foreign jurisdictions. And so during the protracted US debate that culminated in congressional action last year, the government of Canada was silent. That's exactly as it should have been, in my view. I was at our embassy in Washington at the time, as you've been told. There were some Canadians, we heard from some of them, who felt that our number one priority at the embassy should have been to try to persuade US decision makers that they should embrace the Canadian model of healthcare. I doubt that those advocates would have been much impressed if the US government had turned around and lobbied for fundamental changes in Canada to the Canadian healthcare system. Other elements of our shared business climate that pertain especially to this region, Central Canada and the US industrial heartland, are the integrated supply chains by which businesses operate in a just-in-time delivery environment. By virtue of the kinds of business relationships that already exist, I've made the case across Michigan that US small and medium-sized businesses should very much be focusing on the Canadian market as they contemplate expansion. And everyone from the president himself, who has carved out a goal of America doubling its exports over the next five years, is counting on significant US job growth to be led by increased US exports. My message to Michiganders may seem a bit incongruous, but here it is. Canada already has an extremely high propensity to buy US-made goods and services. We're only 34 million in population, but we buy more from the United States than the 500 million people of the European Union do. The USA's second, third, and fourth most important export markets after Canada are, respectively, Mexico, China, and Japan. The combined population of those three countries is 1.5 billion. Canada buys more from the United States than all three of those countries do. Combined. So given that we are already the USA's best customer, given the goal of doubling exports, given that while only 1% of US firms export, almost 40% of those do so to only one country, Canada, and given the appreciation of our dollar, we're on a bit of a buying spree as a result, for a potential US exporter, it's logical to focus in the first instance on Canada. This is where our common approach to business is important. When I was president and CEO of Ontario Exports, Inc., the precursor to, I'm not sure what it's called anymore, PAM, but in any event, I think the agency's been done away with, hopefully not because of anything I did to it, between 2003 and 2005. I talked all the time to leaders of small and medium-sized businesses, because that was the core group of our focus. They were entranced, as everyone was, by the Chinese market at the time, but they were also very conscious of the risks that were involved in pursuing that market. For the most part, these were companies that had never exported, taking on additional employees to permit expanded production for export purposes was fraught with danger. What if they encountered too many obstacles and couldn't get their product to market? Invariably, these Ontario firms opted to cut their teeth on the US market in the first instance. The same reasons apply, whether you're talking about Canadian or US firms, when looking at the other country. Geographic proximity, time zones aren't an issue, comparable legal systems, excellent linkages between our banking systems, learning all about customs procedures in a language that you already speak, shared business ethics, and inherent trust and confidence. Then, with the experience gained, small and medium-sized firms, whether Canadian or American, are positioned to try other markets. It's a model that works over and over again. Of course, and I must flag this, there are potential constraints on the optimistic scenario that I've painted. One concerns border congestion. I'll come back to that at the end of my remarks. Another concerns protectionism. It's insidious. I admit it's an understandable impulse in hard economic times, which is partly why bi-American permeated the USA's 2009 stimulus package, the Recovery Act. The problem, of course, is the protectionist actions by governments evoke protectionist demands by citizens of jurisdictions whose companies are discriminated against as a result of the protectionist actions. We fight these hard, as the Canadian network in the United States, whenever they crop up, because the protectionist behavior becomes the norm, especially when applied to sellers from a country, Canada, whose economy is almost fully integrated in the manufacturing sectors in any event with that of the United States, then a downward spiral will truly be engaged. Opportunities to pursue new trade would largely dry up, and existing trade would diminish. One factoid that helps illuminate the true extent of economic integration between our two countries, the Ann Arbor-based Center for Automotive Research issued a study last year showing that 61 percent of the average car or truck coming off the assembly line in Ontario is in fact American content. So I invite people to put a label on that car or truck in terms of rules of or country of origin. I'll wind up this section by talking but just for a couple of moments about pharmaceuticals, one of the subjects that you're going to be discussing tomorrow. Canada is home to the third largest life sciences industry in the world. We host over 100 research institutes employing 30,000 scientists. While the Canadian life sciences sector is integrated across three main subsectors, bio, pharmaceuticals, medical devices and contract services, I'll talk just about one of those bio, pharmaceuticals. Human health represents over half of all life science companies in Canada, 70 percent of all revenues and close to 90 percent of all R&D. Canada leads the G8 in growth in health research patents, ranking fourth internationally. We conduct clinical trials for all of the top 10 global pharma companies operating in our country. In 2009, 1.3 billion was spent on pharmaceutical R&D in Canada. Over 3,000 clinical trials were conducted second in number only to the United States. Canada's research sector is known for applying advanced technologies and sophisticated methods, quickly recruiting patients, adhering strictly to good laboratory clinical and manufacturing practices and generating high-quality, robust data. Several factors have contributed to our vibrant life sciences industry. They can be summed up in three words, people, infrastructure and incentives. First, people. As already mentioned, we're rich in talented human resources. Our strong health community includes 64,000 physicians. Second, infrastructure. Several Canadian universities are leading on international life sciences research projects. Our National Research Council, which is a network of government-funded research institutes, has specialized expertise in the areas of medical, biological, nanotechnology, nutraceutical and biodiagnostic sciences. In addition, our teaching and research hospitals, affiliated with research centers, the Toronto Hospital for Sick Children being one of the most renowned, carry out clinical trials and applied research. There are also other government research funding bodies such as the Natural Sciences and Engineering Research Council and the Canadian Institute of Health Research. Third, incentives. We offer one of the most favorable tax treatments for R&D in the world. We provide a system of tax credits and accelerated tax deductions for a wide variety of R&D expenditures, including salaries, overhead, capital equipment and materials. For example, non-Canadian companies can qualify for combined federal and provincial tax credits of between 20 and 38 percent. If a foreign firm partners with a Canadian one, they could be eligible for a world-beating 61 percent in tax credits. I mention all of that because Pharmaceuticals is on your agenda for tomorrow and because what we're building in this sector in Canada very much dovetails with the human capital development agenda. This sector is replete with good jobs. The sector, those jobs, pay better than the average. The synergies that can be established between companies on the one hand and universities or research institutes on the other are phenomenal. The linkages that international companies operating in this sector can provide for Canadian partners are extremely valuable. This will continue to be a priority for Canada's Department of Foreign Affairs and International Trade and for the Canadian Consulate General in Detroit. Welcome news. I'll soon be done. But there are two other things that I have to touch on. First, neither of them relate specifically to the agenda you're discussing here. In fact, they probably relate more to the agenda of your conference last year. One concerns another risk, border congestion. Governments in both countries are alert to the problem. That's why on February 4th in Washington, Prime Minister Harper, President Obama, jointly announced a work plan designed to give effect to a new vision for border management between our two countries. The objective through enhanced information sharing and intelligence operations will not only be to alleviate pressures to thicken the border, but ideally to transform border management with facilitation on an equal footing to security considerations. This is sometimes colloquially referred to as a belt and suspenders approach. The theory, if suspenders can be installed on the perimeter of Canada and the United States, creating greater certainty for both governments against the risk of persons with nefarious intentions entering North America, anywhere in the United States or Canada, then the belt that divides our two countries can be somewhat loosened. Sovereignty obviously must be preserved, but governments of good will with this objective in mind should be able to achieve the desired results. And the benefits, economic and otherwise, to our respective populations could be immense. Finally, and I can hardly believe that I've spoken to an audience in Michigan this long and not yet mentioned it, there's the need for modern, reliable infrastructure going forward. In the context of today's Michigan-Canada relationship, that means a new bridge across the Detroit River. In fact, it's not even a local issue. It's a regional, even national issue in its true importance. A new crossing has become Canada's number one national infrastructure priority. We put on the table to the government of Michigan a proposal that almost anyone would consider highly attractive. For no money down and no liability, Michigan gets joint ownership and joint control of a brand new bridge built to last 125 years. Michigan and Canada would each receive a revenue stream of perhaps 50, maybe as high as $60 million a year based on projections after 40 to 45 years or so, again on a bridge built to last 125. 10,000 direct construction jobs would be created on the U.S. side alone for the full four to five year period of construction. Another 25,000 spin-off jobs would be created on the U.S. side for the same period of time. And because of a skillful deal reached by the new governor of Michigan, a three-time graduate of the University of Michigan, if I'm accurate, clever man, he's negotiated a skillful deal with the U.S. federal government, whereby Michigan would be able to count Canada's contribution in Michigan's name to this bridge because we won't be flowing money to Michigan as eligible to receive matching funds from the U.S. federal government on a four to one basis for construction, road construction, bridge construction projects anywhere in the state of Michigan, up to $2.2 billion in such construction again at no cost to the Michigan taxpayer. There's no catch. The benefits go far beyond the construction jobs. Security redundancy would be achieved at the world's most important border crossing in terms of volume of trade that it carries. Environmental goals would be met. The entire region would become more attractive as an investment destination for job-creating companies whose business plans depend on moving things quickly and reliably across the Detroit River. I'll be happy to talk more about this. Indeed, I welcome any opportunity to talk more about that or any other subject, any other subject that I've addressed or others that I haven't during questions. I committed to Simon that I would talk for 45 minutes, which I think is precisely how long I've talked for. I thank you all for your attentiveness this evening, and if you do have questions, fire away. Thank you. Okay, so I'd just like to thank Mr. Roy Norton for your remarks this afternoon. Despite your modest comments, there was certainly coherence in the entire presentation, and of course we appreciate your allegiance to the University of Michigan basketball team as well once again. I'm sure it gave us a lot to think about in preparation for the conference. So much to think about that. I'm sure you all want to get some of your thoughts out right now as questions, and so we're going to move on to a question and answer period. I have one microphone here. I have another microphone there for the sake of sort of the acoustics in the room and for recording purposes. I encourage you to use the mic. So if you have a question, please raise your hand. I'll walk to you with the microphone, and I'm sure Mr. I'm mic'd to walk around, I think. Field his own questions, so let's open the Q&A session. No questions from me and Clark. I was about to say no questions from me and Clark. So just while it's on your mind, can you explain to me and to the Michigan audience what the problem is with this magnificent bridge with no catches? Everybody, for the most part, likes the proposal save and accept the owners of the existing bridge, the Ambassador Bridge, whose business will remain profitable just not offer the monopoly profit benefits going forward that the mere fact of competition will create. The big five automakers, as in GM Ford, Chrysler, Toyota, and Honda have all come out in support of the new bridge, emphasizing the need for competition. Nobody in business, this isn't a business school, but nobody in business that I've ever talked to favors the notion of a monopoly provider of one of their key inputs, and in this case the key input clearly is a service, transportation across the Detroit River. 10,000 trucks a day across the Ambassador Bridge, and they have no idea when they approach the Ambassador Bridge what kind of congestion they're going to encounter on a given day. Truck companies based in Omaha, Nebraska are lobbying for the new bridge because they carry stuff from Long Beach, California, to Montreal, and they want to be able with some reliability and predictability tell their customers how long it's going to take because time is money, truckers can only drive so many hours before they have to stop for a protracted period, idling results in lots of wasted fuel, so on and so forth. So the existing owners entirely understandably are throwing a lot of resources and have for years at securing the status quo. The legislature has to authorize it because the model that Canada and the United States follow for crossings is that Canada and the state in which the bridge lands jointly own the bridge with two exceptions. This one, the Ambassador Bridge, which is by far the most consequential in terms of, it carries 30% of Canada-US trade. It carries four times more trade than what Michigan does with Canada, which highlights how national and important this is. It carries three times more trade than the US exports to Japan in a year, and it's 82 years old, and it was built to last 100 years, and no governments interested in business climate should allow a situation to pertain very much longer into the future in which 30% of their business relationship and literally millions of jobs in the two countries that depend on things moving quickly at the border might be in jeopardy if there were to be a disruption on a protracted basis because of security reasons or otherwise. So choice, redundancy, renouvellement, the notion build it and they will come. The State of Ohio voted last year its legislature unanimously to support the new crossing. They're not going to get the 10,000 jobs. Those are going to be in Southeast Michigan, but Ohio does $25 billion in two-way trade with Canada every year. Most of it crosses the Ambassador Bridge, and companies that locate there say to lawmakers in Ohio, as indeed they're saying to lawmakers in Michigan, we need to have certainty as we plan our investments going into the future that we'll be able to move things in this corridor, and if we don't have that certainty we'll have to look elsewhere. Michigan doesn't have a lot of options. Ohio actually does have options. They can go east to the Niagara Peninsula where there are four bridges already. A fifth is proposed. The owners of the existing Ambassador Bridge have indicated an interest in building that fifth bridge in the Niagara Peninsula. Go figure. So we have no ill will towards the owners of the Ambassador Bridge. We hope that the new crossing will be authorized soon. Construction could begin next year if it were to be authorized and would be completed within four to five years, and the existing Ambassador Bridge will continue to be profitable, although less so than what it currently is. Mr. Maroon took a hit in the latest Forbes list. He fell down a few hundred, I think, from 253 to 748 in terms of being the richest man in the world. He's only worth 1.7 billion. Probably can afford to accept something less than the current revenues from the existing bridge. So there's my spiel on the bridge. Thank you. Thank you. I was afraid Ian Clark is a, I was misadvertised by Simon as being senior diplomat. Ian Clark is a senior former Canadian public servant in a lot of capacities in the finance department, our privy council office, and I was afraid you were going to ask me a question about budgeting 16 years ago rather than one about the bridge. Thank you for the question on the bridge. Questions on anything else? In your mind, what are the policy solutions that you would propose for American and Canadian research institutes to cooperate in order to develop, I guess, effective and affordable pharmaceuticals in this century? I guess the following question would be what are the impediments to implementing these solutions? I don't know that there are significant impediments and I don't know what the solutions are. It's not, as I said, it's convenient to declare at the outset what you don't know and then hope that you can get away with not being expected, not much being expected of you by way of policy solution suggestions. Canadian and US pharmaceuticals companies do an increasing amount of joint research. I talked about incentives that are in place to promote still more of that. American companies have historically been concerned about intellectual property protection in Canada. I was, for my sins, during my first posting in Washington on the negotiating team for two of the NAFTA chapters, intellectual property and investment. Ironically, the owners of the Ambassador Bridge are suing the government of Canada for five billion dollars under the investment chapter of NAFTA. Everything comes around full circle because they're asserting that we're trying to diminish the value of their investment, which isn't our objective. We're trying to secure the future in any event. NAFTA intellectual property chapter, for the most part, dealt with US drug companies' concerns about IP protection in Canada. As a result, more and more started to invest in Canada. US firms have always had concerns about the price power of Canadian provinces, the fact that Canadian provinces authorize formularies as in they determine which drugs are eligible for reimbursement under Canadian Medicare. That gives them, just as the liquor control board of Ontario is known as the world's largest single buyer of alcohol because nobody else has an agglomeration of buying power that's as large as what the LCBO is. The Ontario government gets to decide and set, has a fair bit of pricing power when it comes to the price of pharmaceuticals sold in Canada. US firms historically have tried to they have achieved for the most part, this is my sense, I stress again I'm not an authority, it's my sense that they have for the most part achieved the costs, they've covered the costs in the United States market of new pharmaceuticals that are developed and that the Canadian market and other developed country markets are, if not gravy, at least almost a bonus, but it has caused the notion that you cannot sell pharmaceuticals in Canada for what it is you would be able potentially to sell them in the United States has been a disincentive to US firms to develop and produce world-class pharmaceuticals in Canada in the first instance and that's a limitation that Canadian governments have for the most part been prepared to accept in the sense that they've not changed their policy so as to alter that behaviour, that corporate behaviour, the cost of changing the policy would be a significant inflation in drug prices in Canada probably causing the share of GDP spent on healthcare to spike significantly from 10%. So there are competing policy goals here and the government of Canada and provincial governments think that they're pursuing all of them in an appropriate balance. Hi there, first I just wanted to say thank you so much for your talk and despite the very modest Canadian preamble I thought it was very cohesive so thank you very much for that. We specialize in modesty. Yes we do. I have a two-part question, how would you compare the relationship between provinces and states in the Great Lakes region to other regional relationships in North America and how do you foresee this relationship changing as both Canada and the US move towards a shift in climate change policy? Well I think I'll answer it in the context of talking about shared management of a natural resource the Great Lakes because it's around the Great Lakes that in Central Canada and the industrial heartland of the US that to the greatest extent the relationship between provinces and states becomes evident. There is a Council of Great Lakes Governors which since 1989 when David Peterson Chancellor of the University of Toronto I believe, Premier of Ontario at the time and Jim Blanchard Governor of Michigan subsequently US ambassador to Canada and somebody that I have the good fortune to and graduate of the University of Michigan unless I'm mistaken. Blanchard and Peterson agreed that the Council of Great Lakes Governors would be expanded to include on an associate membership basis the governments of Ontario and of Quebec and so those 10 leaders have met for the most part annually ever since 1989. Their seminal negotiating success was I think it's safe to say the compact on water diversion as in prohibiting water diversion outside of the the basin the Great Lakes basin reached in 2005 negotiations began in 2001 I had the good fortune at the time to be the the person in Ontario the lead is Ontario's Ministry of Natural Resources but but I headed our international relations and protocol operation at the time and therefore was more than nominally responsible for outreach to US states so I got pretty much involved in this it took a long time it took till 2005 to 2006 to materialize and then again because everything comes full circle I was in Washington responsible for our congressional relations when this compact had to be approved by the US Congress and so got to liaise with the US Congress in that regard it was truly path breaking it's the sort of thing that it's an interesting policy study it's likely the case my view that that this could never have been arrived at between the government of Canada and the government of the United States in as much as if such a discussion had begun in the US policy milieu the Arizona Georgia lots of jurisdictions that had found themselves very attracted to the notion of access to Great Lakes waters would probably have killed it the Great Lakes states are a powerful community in Washington but a diminishing weight relatively speaking because a compact was negotiated at the subnational level it did not on the Canadian side but at the in the in the US side it did require congressional approval because states can't without congressional approval negotiate agreements with foreign jurisdictions but by the time it reached them it was a feta complete and again the configuration was such and with our encouragement and support it pretty much zipped through without without any opposition and got blessed and as a result there cannot be transfers bulk transfers of water outside of the Great Lakes basin I think that there is probably nothing that would be more consequential I mean governments collaborate all the time on on you know ensuring that invasive species don't don't enter the Great Lakes that pollution is is controlled that wetlands are extended and preserved and so on but there's probably no more consequential contribution that could be made to ensuring the vitality of the Great Lakes going forward and their centrality to sustaining the economic and and human development attractiveness of this region than to have ensured that bulk transfers of water outside of the basin could not happen so that's something that happened as a result of provincial federal collaboration in the first instance and I think is a perfect example of how the system when it's working well can yield tremendously impressive outcomes hi you want me to start again for recording purposes again Canada is a great place to do business yes you spoke about I always you're an American I always find that the best spokesperson for Canadian interests are Americans so keep saying it Canadian you're Canadian okay I I thought that I thought that you have t students were here in the okay no we're dispersed you're everywhere okay so we've had the debate in Canada about having a national securities regulator right each of our 10 provinces and territories have their own securities regulators and I'm wondering if you think that this hampers investment and business in Canada does it well a I'm not only do I profoundly believe that Canada is a wonderful place to do business but I'm paid to communicate the view that Canada is a wonderful place to do business I'm also paid to support as into to not certainly not take issue with policies of the government of Canada Canada believes that there should be a national securities regulator I believe that there should be a national securities regulator and and I come from Ontario for the most part Ontarians think that there should be a national securities regulator so so I can be you know entirely consistent with my values in endorsing that does it does it impede investment perhaps I don't know if that's been quantified I don't have anecdotal examples of that but the financial services sector is not one of our principal areas of focus at the consulate general in Detroit my colleagues at the consulate in New York City might be able to offer a a more complete view as to whether as in offer anecdotal examples of the instances in which investment has not proceeded by virtue of the lack of a national securities regulator I can't yes um so I guess from an American perspective from someone who grew up outside of Detroit there are multiple reasons that led to the origin of the Detroit urban crisis which has become the archetype for a lot of urban crises in America a central factor though is Americans inability to address through public policy racial and ethnic disparities both structural and institutional and you touched upon divergent approaches to immigration policy between Canada and the U.S. I'm curious that you could comment upon not just issues of different approaches towards fostering immigration but also ethnic integration multiculturalism and different approaches towards acceptance and assimilation and what the economic implications of those policies might be I did a doctoral dissertation on visible minority community efforts to influence Canadian foreign policy and have spent a lot of time talking to visible minority community leaders in in Canada we think we believe that our policy of multiculturalism actually works remarkably well as in there's an official consensus yes there are people on the margins who disagree it has encouraged people to retain their identity and ironically or maybe not so has facilitated integration people by cleaving in a community have found it easier to integrate into the broader society because they have retained a lot of what it is they were and continue to be and not been required to surrender that to abandon it in pursuit of some kind of declared national norm we think it works for us where again not in the business of recommending policy solutions to others I don't think that that Troy it has suffered by virtue of the lack of a policy of multiculturalism I think that the auto industry which grew phenomenally in the first half of the last century began for a set of economic reasons in access to more land bigger plants out to the suburbs and and and workers followed and and the American dream the opportunity to to have a large house on significant acreage and and at the same time not being that far from the plant that they were going to work in was highly attractive the city was denuded as I understand in the process city built for a population of two million now as a population barely more than 800,000 is trying to offer services in a landmass that's that's three quarters the size of Chicago with a population a sixth or a seventh that of Chicago and this is not reversible overnight indeed a lot of people wonder if it's reversible outward migration from the city continues and and that's tragic and it makes one wonder what will cause the city to come back and I don't god knows have a solution to that I wish it would come back I wish it would come back you know during the four years that I'm posted here because I'd like to be able to I'm a kind of urban person as in I like to live downtown I don't and and spend time walking around downtown and I go to sporting events but then I get in my car and drive to the to the suburbs it's not what I did in downtown Toronto it's not what I did in Ottawa it's not what I did in Washington or in Cambridge, Massachusetts but but it I'm struck by the extent to which folks here drive everywhere I can't be healthy you know for one's waistline or for the environment so but it's just a different way in which people organize themselves I'm grasping here I don't I don't have an answer to your question really I'm sorry okay perhaps over here right here hi I'm wondering as both U.S. and Canada increasingly diversify their trade as you mentioned Canada currently in negotiations with the European Union and the U.S. with expressed interest in the Trans-Pacific Partnership how do you see the U.S.-Canada relationship evolving over the next 10 to 20 years well we are diversifying our trade Canada you might have to help me on this Ian Canada reached a high point of dependence on the United States in terms of exports of 81 82 percent thereabouts it's down to about 70 percent much of that drop has occurred during the course of the of the most recent recession the trade agreements unquestionably will will cause that diversification to continue there have been lots of but I hark back to what I said about the impulses that drive businesses in the first instance and the criteria that they that they take into account in their decision making foreign policy for Canadians prime minister Trudeau's vision in 1976 of a of a Canada in which in which we were massively less dependent on the United States market was promulgated that is the vision was promulgated and and the percentage of our dependence on the United States just continued to grow in every year thereafter policy makers in other words have a real challenge in trying to dictate what it is the market will decide I don't think that the that the relationship with the United States is especially dependent on trade I'm kind of a geographic determinist you know we we are where we are it's not accidental that any significant country in the world has its largest trading relationship with its immediate neighbors but beyond trade we have a shared environment to to manage that isn't going to change the the volumes of tourists that travel back and forth we all know Canadians all think they know Americans extremely well because 90 percent of us live within 150 miles of the border it's our sunbelt but we don't know Americans nearly as well as as we think we do but we do travel in in quite pronounced numbers to the United States that's not going to change because because trade is is moving elsewhere we can't begin to project what kind of turmoil the rest of the world is going to find itself in but but it could well be that the Canadians North Americans Canada the United States and Mexico will find themselves looking more and more inwardly as well to to leverage the relationships that are accessible convenient well established and safe and secure certainly in the context of the energy trade there's probably potential for North America to become collectively energy self-sufficient in the decades in the future providing we act in an integrated fashion and and and perceive an opportunity to have one North American market so I don't think that the relationship trades on on trade no pun intended or depends on trade it's for the most part a extremely well functioning relationship colleagues posted elsewhere in the world you know my friend Canada's consul general in Dubai who has to who got there not only got there as the Canadian as the as the Dubai economy collapsed but has to manage this difficult relationship with Dubai over landing rights for Emirates Plains in Toronto and it's quite a complicated story I mean he has a real problem he goes in to see the government of Dubai and and and things are frosty we don't have a frosty relationship with the United States we're not always at the top of their radar screen on any given day but friends who lament that I tend to tell them to be careful what they wish for you know the Pakistan Afghanistan North Korea are at the top of the United States Iran or at the top of the United States radar screen on any given day is that really where you want to be a smooth well functioning frictionless to the extent possible relationship you know it's not glamorous we invest a lot of resources in keeping it that way and we're going to continue to do that and I think the potential exists for it to for it to remain that way