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Eric Martel, President and CEO of Bombardier
Hard Numbers: Bombardier blasts Ottawa, Freight flows fall, Canada-Taiwan trade pact framed, Titanic racket rocks Kiwis
4: Total cross-border freight shipments between the US and Canada fell 4% in annual terms in August 2023, according to newly released data. The drop was part of a broader slowdown in North American trade — freight flows between the US, Mexico, and Canada fell 1.7% over the same time period.
70: Canada and Taiwan have hashed out a free trade and investment pact that they hope to have in place in the coming months. Taiwan hopes the agreement, which comprises more than 70 provisions, will help its bid to join the CPTPP, a major transpacific trade grouping that Canada will chair in 2024. The Canada-Taiwan pact is sure to strain already-fraught Canada-China ties, as Beijing does not recognize the sovereignty of Taiwan.
10: If ever you doubt the reach of Canada’s soft power, know that there’s a place in the world where people mount 10 emergency sirens on their cars for the purpose of blaring songs by French-Canadian superstar Celine Dion louder than other cars fitted with sirens for the same purpose. This occurs regularly at 2 a.m. (yes, A.M.) in the town of Porirua, New Zealand. Local residents and officials have tried to stop these “siren battles,” but like Dion’s heart, they go on.
A graphic showing English-French bilingualism in Canada.
The Graphic Truth: English-French bilingualism in Canada
Parlez-vous le français? Probably pas très bien if you live outside Quebec, according to census data from Statistics Canada.
The share of Canadians who can hold a conversation in both English and French has plateaued around 18% for two decades, despite strong legal protections for the French language and official encouragement of bilingualism.
The background: Political rivalries between English and French-speaking Canadians dominated the early history of the country, and fuel some radical independence movements in Quebec even today. Official adoption of bilingualism at a federal level in 1969 was meant to help heal the rift.
And in the first three decades, it met with considerable success. The share of bilingual Canadians rose from 12.2% in 1961 to 17.7% in 2001.
However, most of the growth came in Quebec, which continues to push up the national rate of bilingualism. Nearly half of Quebeckers are bilingual, compared to less than 1 in 10 Canadians from other provinces.
Statistics Canada explains that English-speaking Canada has simply outgrown the share of the country with French as their mother tongue, but also pointed out that Canadians whose mother tongue is neither French nor English —- mostly immigrants — are less likely to learn both of Canada’s official languages.
But there’s one more wrinkle: Quebeckers whose mother tongue is neither English nor French are actually more likely than the general population to speak both languages, with 50.8% able to hold a conversation in French, English and their mother tongue. Incroyable!
Can Canada woo techies from the US and become a digital nomad hotspot?
The battle for tech talent between the United States and Canada is heating up. Last week, Canadian Immigration Minister Sean Fraser announced a suite of reforms aimed at attracting technology sector workers from around the world, including the US. The move comes as Canada struggles to respond to American green subsidies for energy and transportation as part of the Inflation Reduction Act.
Canada has long been wary of its global hegemon neighbor pipping it to the talent post. Brain drain – or “human capital flight” – has obsessed governments and commentators up north for decades. With Fraser’s new, multipronged immigration strategy, the country hopes to reverse the drain, and the US may be ill-positioned to fight back.
A four-pillar plan
Fraser’s four-pillar plan includes an “Innovation Stream” to attract talent to tech companies or “select in-demand occupations,” a “digital nomad” component to draw in folks who can do their work from anywhere, and amendments to existing programs to facilitate and extend tech-related work permits.
The spiciest bit? There’s a one-year plan for “a streamlined work permit for H-1B specialty occupation visa holders in the US to apply to come to Canada.” Those who enter via the program can later apply for permanent resident status if they meet the requirements. In short, Canada wants to poach foreign, pre-vetted tech workers residing in the US – up to 10,000 of them – and perhaps keep them.
While considered temporary, the program aims to provide laid-off tech workers in the US the chance to continue working in North America. Whether the program will continue past next year remains to be seen. But if the H-1B plan helps bolster Canada’s tech sector, there will be a good case for keeping it, no matter how the US responds.
The H-1B visa odyssey
The US H-1B visa is an employer-sponsored “nonimmigrant classification” for highly skilled workers from abroad, particularly in tech. The US allows up to 65,000 new visas each fiscal year, plus another 20,000 for applicants with advanced degrees from domestic colleges and universities.
Immigration attorney Andy J. Semotiuk, in a recent piece for Forbes, complained that the US needs to revise its H-1B visa program to ensure it remains competitive. He previously wrote that applying for the visa is a massive pain, requiring four applications and a long slog, including the requirement of a green card and employer labor certification to prove there are no American workers to fill the job.
Kylie Milliken, a researcher with Eurasia Group, says a major problem with the H-1B visa program is that the cap has not been raised since 2006. While it’s been working well, she notes, “it does not admit enough applicants to meet the needs of the labor market.” Despite calls from industry for changes, Congress hasn’t budged, which is no surprise, Milliken says, because “immigration is extremely divisive in the US, which makes policymaking difficult even when the government is under unified control.” In Canada, Fraser’s “streamlined” plan hopes to attract folks who’ve been able to get through the H-1B process, and their families, and permit them to work for “almost any employer anywhere in Canada.”
Any attempts by the US to respond to the Canadian plan, says Jon Lieber, managing director for the US for Eurasia Group, will be met by congressional deadlock on immigration. “The US is not likely to respond to anything Canada does because US immigration policy is not currently being set by the interests of US companies, but by domestic groups who are largely anti-immigration or at best immigration skeptics.”
That’s also why nothing’s been done to overhaul it to a more rational program, Lieber adds. “It’s basically working well for a small number of firms who benefit from it, and there’s no political will to expand it in the face of attacks.” That means no expansion to the number of applicants the US accepts and no replacement program that includes a pathway to citizenship.
Will visa holders move to colder climes?
Moving to Canada could be an attractive option for H-1B visa holders in the US who have recently lost their job because the visa is tied to employers. As Lieber says, those folks “are at the whims of their employers for their ongoing residency in the US.” So, someone who loses their job also loses their visa sponsor, leaving them with a stressful 60 days to find a new job.
As the US stares down a recession, the country has laid off nearly 200,000 workers so far this year, many of whom come from the tech sector. Alphabet has cut 12,000 employees, while Amazon let go 18,000 people, and both Microsoft and Meta eliminated 10,000 positions each. The US layoffs, and Canada’s inclusion of a path to citizenship within its H-1B program, might make applying to the northern alternative an attractive option for many.
Even though Canada’s tech talent-poaching plan is starting modestly, the US needs to keep its eye on the sector. “If the US wants to keep its tech industry robust and keep leading innovation,” Milliken says, “it will ultimately need to find a way to get more skilled workers into that space, whether by incentivizing American students to go into the tech and AI industries, allowing foreign-born graduates of US universities to work in the country longer after their student visa runs out, lifting the H-1B caps, or some other route.”
Canada’s H-1B plan launches on July 16, and the rest of its tech worker plan will unfold in the months to come, with the Innovation Stream due online by the end of 2023. By then, we should know whether Canada is managing to poach talent from the US – and whether it plans to aim for more in the years to come.
Ian Explains: Biden-Trudeau summit well worth the wait
Joe Biden and Justin Trudeau finally met recently, two years after Biden came to office. The good personal vibes, as expected, were great, and the state of the US-Canada relationship is strong, though not perfect, Ian Bremmer explains on GZERO World.
The US president and the Canadian PM signed an agreement on asylum seekers, but other, thornier issues still need to be worked out.
One of them is Haiti. Biden wants Canada to lead stabilization efforts there, but Trudeau is reluctant to put Canadian boots on the ground.
Beyond that: trade, security, climate change, Russia in Ukraine, and, of course, China.
Watch the GZERO World episode: What the US and Canada really want from each other
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Subsidy game could hurt Canada-US relations
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, DC shares his perspective on US politics.
What is happening with US/Canada relations?
Well, I'm headed up to Toronto, Canada, just about a week after President Biden made his first trip to America's neighbor to the north, which is also the US' second largest trading partner. A very important, deeply ingrained relationship between these two North American economies. And a major source of tension right now between the US and Canada is over industrial policy. The US over the last several years has started to deeply subsidize infrastructure development, semiconductor manufacturing, and in the Inflation Reduction Act, green energy production, electric vehicles, and the components that go into this.
Now, the automobile industry is obviously a very major component of US/Canada trade and has been that way since the mid '90s when NAFTA was signed. The renegotiated USMCA has created a new set of playing rules for governing US/Canada trade, and there have been several long-standing disputes between the two countries that have not yet been worked out. And now with the introduction of the US' new subsidies, the Inflation Reduction Act is causing major concerns in Canada who are worried about losing green energy investments to the United States where there are tax preferences, loan programs, and other direct form of subsidies in order to get that manufacturing into the US.
Canada last week responded with its own budget, laying out billions of dollars in new subsidies to help compete with the United States and hoping that it can attract some of that investment over the northern border. Canada has several very attractive elements that the US does not have, including lower costs of construction, more flexible immigration policy, allowing them to take in higher skilled labor from around the globe, that is set specifically around set of criteria having to do with how qualified and educated immigrants are. This exists in the US but to a much lesser extent, and now Canada's getting into the subsidy game.
So this could be an ongoing source of tension between the two countries. It means that if you're looking to build a manufacturing plant for green energy or EV, electric vehicles, or for batteries, there's going to be this race to the top that the US is trying to push. Where Canada, the US, the EU, are all looking at different ways they can get these manufacturers into their markets. And going forward, these types of tensions could be an important part of the US/Canada relationship.
Both leaders are incentivized to keep things friendly between the two countries. Canada has a lot to lose if they could cut out of the US market. And from the US perspective, Canada is sort of like a very large state where English is the primary language, there's very little trade barriers, a highly educated workforce that's competitive across many of the same areas that the US economy is, and the US is also deeply incentivized to get along well here with Canada.
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U.S. President Joe Biden and Canadian PM Justin Trudeau during a bilateral meeting at the North American Leaders' Summit in Mexico City, Mexico, January 10, 2023.
Biden-Trudeau talks focus on immigration and defense
Amid the pomp and pageantry accompanying President Joe Biden’s first official visit to Canada, he and Canadian PM Justin Trudeau are looking to make some deals.
Even before Biden’s arrival late Thursday, news broke that the two countries had reached an agreement on irregular migration flows across the US-Canada border, a sticking point for both governments. An influx of asylum-seekers across the Roxham Road crossing into Quebec has dogged relations, with nearly 40,000 migrants crossing in 2022 alone.
Trudeau has been asking the US to renegotiate the Safe Third Country Agreement, which requires asylum-seekers who cross select border points to be sent back to the country where they first entered. Why? Because it encourages migrants to enter at irregular crossings like Roxham Road, and once they’re in Canada they can legally make asylum claims.
The precise details of the new migration deal are still under wraps, but Canada has reportedly agreed to take in 15,000 migrants from the Western Hemisphere through official channels. The agreement also would reportedly allow both countries to turn away asylum-seekers who cross the border without authorization.
The Biden-Trudeau talks on Friday are also expected to turn to defense. Last month’s Chinese spy balloon fiasco has led to increased pressure on both leaders to ramp up security. North Korean missile tests and Russian advances in missile technology have added more urgency to North American defense.
A new Maru Public/GZERO poll finds that the vast majority of Americans and Canadians (93% and 91%, respectively) want the two countries to boost security efforts, and most Canadians favor either a joint missile-defense system or having US missiles on Canadian soil.
With both Canada and the US being behind on the modernization of the North American Aerospace Defense Command – much of its radar systems are from the 1980s – Friday’s discussions are likely to touch on NORAD investment.
Biden is expected to push Trudeau on military spending – like many NATO members, Canada lags behind its defense spending target of 2% GDP. Canadian NORAD officials complain that current military capabilities are sluggish. Last year, Trudeau’s government pledged $4.9 billion to upgrade NORAD, but Americans are skeptical about the speed at which Canada can deliver.
The war in Ukraine is also putting Arctic defense back on the map. The Maru/GZERO poll showed that majorities in both the US and Canada support a joint military presence in the Arctic. Receding ice in the region has freed up shipping lanes, portending new access to lucrative resources like oil and rare-earth minerals. The region’s security would take on even more geopolitical importance should Finland and Sweden join NATO, possibly making it a new frontline pitting Russia against the West.
There's no shortage of thorny issues for Biden and Trudeau to tackle, from defense and immigration to trade and Ukraine. For more on the presidential visit, be sure to join us on Twitter Friday at 12pm ET. We’ll be talking with Forbes' Diane Brady, Eurasia Group's Gerald Butts, and GZERO's Evan Solomon, breaking down what Biden and Trudeau need to accomplish during their meeting. Set a reminder here.
To stay up to date on crucial US-Canada relations, be sure to subscribe to our new newsletter, GZERO North.
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Ukraine's President Volodymyr Zelenskiy awards a Ukrainian service member at a position near a frontline, in Donetsk region, Ukraine March 22, 2023.
What We’re Watching: Zelensky’s Bakhmut message, Rishi’s post-Brexit win, Trudeau’s take on Haiti, Ethiopia’s peace progress
Russia and Ukraine score points where they can
Volodymyr Zelensky visited frontline troops in war-ravaged Bakhmut, located in Ukraine’s eastern province of Donetsk, on Wednesday as Russian drones struck across the country. While planning for the trip was surely well underway before Vladimir Putin’s surprise stop in Russian-occupied Mariupol last weekend, the contrast underlined Zelenksy’s signal of defiance.
By appearing in Bakhmut very near the fighting, Zelensky reminded the world that, six months after Putin mobilized 300,000 new Russian soldiers for a deeper advance into Ukraine, even the small city of Bakhmut remains beyond their grasp.
In other war news, Russia has warned it will respond harshly to shipments from the UK to Ukraine of anti-tank munitions made from depleted uranium. Moscow claims this step adds an escalatory nuclear element to the conflict. In response, the UK insists the Russian position is propaganda, that the use of depleted uranium is common in anti-tank weapons, and that it contains nothing that can be used to make nuclear or radiological weapons. Finally, Russia has announced a plan to raise an additional $8 billion in revenue by changing the way oil profits are taxed.
All these stories underscore the reality that, while little has changed on the battlefield, Russians and Ukrainians are still looking for every small advantage they can gain in what looks increasingly like a war of attrition.
Has Brexit got “done” yet?
In a win for PM Rishi Sunak, the British House of Commons on Wednesday passed a reworked post-Brexit deal for Northern Ireland, which was agreed to last month with the European Commission.
Essentially, the proposal known as the Windsor Framework creates two lanes for trade: a faster-flowing green lane for goods transiting only between Britain and Northern Ireland and a red lane with more rigorous customs checks for goods bound for Ireland and elsewhere in the EU. It is unlikely to come into effect for several months as details are ironed out, officials say.
Still, despite the big margin of victory, more than 20 Tories – including Sunak’s two predecessors Liz Truss and Boris Johnson – voted against the measure, with Johnson saying it would mean that the UK won't be able to fully embrace the benefits of Brexit (what benefits, he didn’t say). It also signals that in the run-up to next year’s general election, Sunak will continue to deal with a vocal Euroskeptic wing within his party.
Meanwhile, six representatives from Northern Ireland’s Democratic Unionist Party also rejected the vote, suggesting that the DUP would not lift its boycott on the Northern Ireland legislature, which began almost a year ago. The lack of resolution on this front will make for awkward optics as President Joe Biden heads to Belfast next month to mark the 25th anniversary of the Good Friday Agreement that ended the Troubles.
Trudeau’s take on Haiti
President Joe Biden heads north on Thursday for his first presidential visit to Canada, where he and PM Justin Trudeau are expected to discuss a variety of issues, from defense and immigration to trade and Ukraine (see our look at likely agenda items here). But Biden is also expected to make some demands about … Haiti.
The situation in the Caribbean nation has deteriorated in recent months. Police have lost control to local gangs, and more than 200 Haitians were killed in the first half of March alone.
The Biden administration is reluctant to get more involved itself but wants Canada to take the lead in addressing the chaos in Haiti. Why Canada? The country has a long track record as a peacekeeper and has had prior involvement (for better or worse) in Haiti, making it an obvious choice from Washington’s perspective. An uptick in Haitian migrants seeking entry to the US and Canada raises that urgency further.
But Trudeau says that “outside intervention” can’t bring long-term stability to the country, and it’s hard to argue with the historical record on that. Meanwhile, many in Haiti worry that outsiders would merely prop up unelected acting PM Ariel Henry. And it didn’t help that Haiti’s largest newspaper ridiculed the recent deployment of two Canadian ships to patrol the coast.
All of this puts Trudeau in a tough spot: Biden wants him to be a reliable security partner beyond Ukraine, but the political fallout from a failed entanglement in Haiti could be disastrous for him. While the Canadian leader will likely make a commitment of some sort for Haiti, will it be enough to satisfy Biden or change the dynamics in Haiti itself?
*From trade and migration to defense, culture, and technology, the US and Canada need each other more than ever. To meet the moment, GZERO Media is launching GZERO North, a new weekly newsletter offering an insider’s guide to the very latest political, economic, and cultural news shaping both countries. Subscribe today!
Ethiopia, TPLF take steps in tenuous peace
The Ethiopian government is removing the Tigray People’s Liberation Front from its list of terrorist organizations, part of a peace deal with the rebel group signed last November. The decision moves the country closer to what observers hope is an enduring peace after a brutal two-year civil war that has claimed an estimated 600,000 lives.
The situation is very delicate. The agreements don’t include all of the various combatants and are vague about who controls certain disputed territories. And while all sides reportedly committed war crimes, many Tigrayans believe the deal doesn’t hold the Ethiopian federal government accountable. PM Abiy Ahmed’s resistance to a UN investigation inspires little hope.
Still, the momentum is towards peace, for now. Economic interests are part of the reason why. Ethiopia is in bad shape, as the country is wracked by famine, drought, and an estimated reconstruction price tag of $20 billion. A lasting peace would enable Ethiopia to reopen two-year-old talks with the IMF on a $26 billion loan restructuring plan, which was interrupted by the war. Still, with so much bad blood – will these incentives be enough to bind the former combatants to a durable peace? All parties must still tread very carefully …
U.S. President Joe Biden speaks with Canada's Prime Minister Justin Trudeau as they meet during the Ninth Summit of the Americas in Los Angeles, California, U.S., June 9, 2022.
US green subsidies pushback to dominate Biden's Canada trip
As Ottawa prepares for a two-day visit by President Joe Biden starting Thursday, Canadians have been speculating about whether he will do something to stop the northward flow of border crossings by undocumented migrants at Roxham Road, Quebec.
That problem is grabbing headlines, but it is nothing next to the border challenges the Americans face, and the Canadians likely have more important requests for Biden. Behind the scenes, the government is focused on getting Americans to help mitigate the impact of the Inflation Reduction Act, the largest climate spending package in US history, which could lead to the loss of capital and jobs from Canada.
The $350 billion IRA stimulus package is a challenge to both Canada and Europe, with subsidies and open-ended tax credits that offer huge savings to clean-technology companies that shift their operations to the United States. It is expected to be a game-changer for emission reductions, but also a threat to allied countries who can’t match the Americans’ spending power.
European Commission President Ursula von der Leyen was in Washington this month to try to come to terms with the Americans over the nature of the threat, and the EU appears poised to match American incentives. That will come too late to save a Volkswagen battery plant that had been planned for Eastern Europe.
Not coincidentally, the German auto giant just announced plans to build a battery plant in St. Thomas, Ontario, where it can benefit from American subsidies because the auto industry is covered by the United States-Mexico-Canada Agreement. That looks like a big win for Canada, but … other sectors do not enjoy the same protection, which means that companies – Canadian and foreign firms in Canada in the manufacturing, green energy, and petroleum sectors – may be tempted to move south of the border to take advantage of generous tax credits.
Canada can’t afford to woo these businesses in the same way, so it needs to match US subsidies in key sectors while also asking the Americans, very politely, to play nice.
“The IRA is the biggest piece of industrial policy coming out of the United States for a very long time, and everybody else is now adjusting to that, and [Canadians] are distinctly exposed,” says Graeme Thompson, a Eurasia Group senior analyst. “All gears are firing in Ottawa to manage the challenge that poses to competitiveness so that the US doesn't just suck up all of the investments that we'd otherwise be after.”
That task is front of mind for Canadian Finance Minister Chrystia Freeland, who will present her third budget four days after Biden leaves. Prime Minister Justin Trudeau’s government likely sees the two events as a one-two punch, an opportunity to wrest control of the headlines for a few days.
Biden’s visit gives Trudeau an opportunity for positive messaging. For Gerald Butts, vice chairman of Eurasia Group and former principal secretary to Trudeau, the government likely hopes to change the channel from the China election interference story, which has dominated the news in Canada for weeks.
“They've clearly got a bunch of stuff lined up where they want to make some announcements there and then run into the budget,” he says. “I think what they're hoping to do, obviously, is get control back of the communications agenda from this crazy China stuff.”
So it’s clear what Biden can do to help Canada. But what can Canada do for him?
Freeland has previously promoted US Treasury Secretary Janet Yellen’s notion of “friendshoring,” building supply chains in allied economies. Her exact plans remain unknown, but Canada can offer the Americans access to critical minerals vital to green energy — like lithium and copper — and take steps to streamline approval for mining projects, although Indigenous land rights may make it impossible to go as quickly as industry would like.
Biden is also seeking more help in Ukraine and Haiti. The US wants Ottawa to play a lead role in planning for Ukraine’s reconstruction, which is reasonable. But nobody thinks Canada will do what Biden wants and put peacekeepers on the ground in Haiti, where gangs have turned the national capital into a hellscape. On the other hand, a lack of action will likely lead to even more desperate migrants heading north – a political problem for both governments, which brings us full circle to migration.
Trudeau wants the US to renegotiate the terms of the Safe Third Country Agreement, which requires that asylum-seekers who cross select parts of the US-Canada 5,525-mile border be sent back to the country where they first entered. Trouble is, this encourages migrants to enter at irregular crossings, such as Roxham Road, and once they’re in Canada, they can legally make asylum claims. The Americans have been noncommittal, and they point to uncontrolled irregular crossings in the other direction: Mexicans who can fly into Canada without a visa and then make a short river crossing to the United States.
From the US perspective, Canada is not doing its part, says Christopher Sands, director of the Wilson Center’s Canada Institute.
“We have problems on both our borders,” he says. “You think your border's better, but we both have illegal crossers and we are just as mad about all of them. You're not any better than the Mexicans. We should get better co-operation from you. It's been one of those debates.”
Biden isn’t likely to renegotiate the STCA unless Canada agrees to do more to control the traffic going the other way, and maybe agrees to take more migrants from Central America.
“I think it's gonna be very tough for the president to do much when he's in Canada,” Sands says.
On the other hand, Trudeau and Biden are progressive political allies, and both are struggling with lackluster approval ratings, so they may want to make some deals and show progress on issues that matter on the ground to voters in both countries.
Fun fact: Biden is the first president to spend a night in Ottawa since George W. Bush came north to thank Canada for its help after 9/11. He’s likely not spending so much time — a precious commodity for the world’s most powerful man — without intending to do something that matters.
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In a world of increasing chaos, the US-Canada relationship is more crucial than ever, from trade and migration to defense, culture, and technology. To meet the moment, we’re launching GZERO North, a new weekly newsletter offering you an insider’s guide to the very latest political, economic, and cultural news shaping both countries. Subscribe today!
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