 Printer-friendly version
(Please check against delivery)
Thank
you, Janet, for your kind introduction. You have been doing a terrific job
promoting increased trade between our countries, the Midwest and Ontario
and, of course, Chicago and Toronto.
And thank you, ladies and gentlemen, for being with us today at this busy
time of year. I know there are many demands on your time, and we are grateful
for your interest and participation.
I’m pleased to see
that there are about two dozen diverse organizations represented here from
Ontario and about the same from Chicago. I hope you’ll
find our time today time well spent.
Before going further, I’d like to make two introductions,
starting with a very special guest, Dr. Leo Henikoff.
Dr. Henikoff is President
Emeritus of Rush University, retired President and CEO of Rush-Presbyterian
-St. Luke's Medical Center, Chicago,
and a man who
is bringing our cities closer together by sharing his extensive medical knowledge
with St. Michael’s Hospital in Toronto. Please join me in thanking Dr.
Henikoff, for his many contributions to our society.
The introductions wouldn’t be complete without recognizing
Dale Tallon, General Manager of the Chicago Blackhawks. Dale and the whole
team have really
demonstrated leadership – creating a young energetic team that has won the
hearts of Chicagoans and has re-energized this Original Six hockey city.
Harris is a proud sponsor of the Blackhawks, and there’s
no better place to watch the game than the Harris Club at the United Center.
The team is looking
great and going all the way this season. Dale, we are all excited. Congratulations.
Today, I’d like to talk specifically about Ontario and the U.S. Midwest.
Together they form North America’s heartland: a large and powerful economic
zone with deep trade ties a long history of shared success. Many opportunities
for more lie ahead.
As you may know – there are many similarities and connections between the
United States and Canada. They certainly exist via geography – but they are
more than that. They exist because we do have many things in common.
For instance, we see similarities with modes of transportation,
whether it’s
a port city or a major rail hub. We also have important industries in common,
like the oil businesses in Houston and Calgary.
As an American – who lived in Canada for more than 20 years – I know
we have a lot in common. We have familiar brands, such as McDonald’s
and Blackberry. We even have competing teams, such as the Blackhawks and the
Maple Leafs.
Both enjoy the works of Architect Frank Gehry, whether it’s
in Chicago with his Pritzker Pavilion in Millennium Park, or in Toronto at
the transformed
Art Gallery of Ontario.
These connections matter. They mean we have far more in common than not, which
means opportunity.
That leads directly to my main message today – for us
here in Illinois and the Midwest, and in Ontario. The strongest of our connections
is the huge,
powerful economic zone we share.
When you add this to the many other social connections we have, we should
take greater advantage of our common infrastructure and industries, to do more,
together.
Today, I will share some facts and examples to back this up. I hope to build
your enthusiasm for taking further advantage of this powerful economic connection
that we already have.
So on to some facts on our deep ties in trade. Let’s start with - US
Canada trade. Canada and the US are each other’s most important and significant
trading partners.
Here are just two examples of trade from Canada to the US: oil and aircraft.
The US imports oil and Canada is our largest supplier, providing 65 per cent
more than Saudi Arabia and more than twice as much as Venezuela.
In addition, Canadian-made commercial aircraft are vital to the U.S. regional
airline industry. It now has more than 1,300 Canadian-made airliners in service
across the country.
Going north bound, The US is Canada’s largest supplier
of motor vehicles and parts and electrical equipment and machinery, with
a combined value of
nearly $60 billion.
Moving closer to home – let’s look at our regional connections.
The largest components of Ontario – Midwest Trade are:
- Machinery and Equipment;
- Health Care;
- Metals; and, of course,
- Automobiles, the largest segment.
Trade in goods between the Midwest and Ontario totaled $92
billion in 2007, with Ontario goods exports to Midwest comprising nearly
60%, and the other
40% in Midwest exports to Ontario. While that’s down from the peak of
$111 billion at the beginning of the decade, it’s double the 46 billion
dollars in 1990.
I’d like to turn for a moment to our largest shared segment, the auto
sector. Long before Canada-United States Free Trade Agreement, we engaged in
free trade in automobiles and auto parts under a 1965 agreement known as the
Auto Pact. Just as it is, here in the Midwest, the auto industry is one of
Ontario’s largest manufacturing sectors.
The industry is now facing serious declines. In November, auto
sales in North America were down over 30% year over year. Those declines
are contributing
to the weakness in the overall economy. So, we all have an interest in the
auto sector’s return to vitality.
As you can see, we have a very deeply connected trading partnership. Often
facilitating that partnership is the financial services sector, where we also
share a long history.
As some of you may know, our company was started here in Chicago
by Norman Harris in 1882. Our parent, BMO Financial Group, has been operating
here even
longer – from the 1840s when Chicago grain merchants first started sending
their products to Montreal. A few years later, BMO opened a branch here. Plus,
a decade before NAFTA, BMO increased its Midwest base by investing in Harris
in 1984.
Today, our extended organization offers businesses the advantages of a well-financed
hometown bank in Harris, and the international reach of a Corporate and Investment
bank in BMO Capital Markets.
Over the years, our depth of resources and range of services has given us
opportunities to partner with companies of all sizes, facilitating growth on
both sides of the border.
Let me tell you about three examples.
The first is an Ontario-based producer of specialized dairy products. The
company had outgrown its home market, and was looking at U.S. expansion for
access to local milk supply, reduced border transaction costs, and faster distribution
to U.S. customers.
The company selected Wisconsin to build a new operation, and
we provided a full range of credit facilities. The company’s new plant
opened in March this year; the company is now directly serving the U.S. market,
where it is
one of the top three brands in its segment.
We have also worked with U.S. companies who see opportunity
in Canada; this is the case in my next example. We did this with one of North
America’s
largest after-care service providers. Working with our colleagues in BMO Capital
Markets, we assisted with acquisitions, helped the company raise equity in
Canada and simplified its capital structure to reduce its cost of capital.
I hope at this point, you are thinking, I want to know more about the advantages
for my company. So let me tell you - expanding trade in the Midwest-Ontario
economic zone delivers multiple business advantages, including:
- Expanded markets;
- A broader supplier base;
- Reduced shipping costs; and
- Other environmental impacts.
It also delivers near-sourcing from suppliers who share your values in managing
their businesses.
In my last example, I want to start by acknowledging my colleague
Ed Lumley, Vice Chair of BMO Capital Markets. Ed served with great distinction
as a Cabinet
Minister under two Canadian Prime Ministers. He now serves on many boards,
most notably the board of CN. I would also like to welcome our guests from
CN: the only rail network on the continent to connect three coasts – Atlantic,
Pacific and the Gulf of Mexico. CN is a remarkable success story and has been
at the forefront of investing in infrastructure.
I am pleased that we co-led its IPO, and helped finance its
combination with Illinois Central Railroad. This was the genesis of “North America’s
railroad.”
Think of how transformational these moves have been. CN now generates more
than half its revenue from trans-border and U.S. domestic business, and it
invests more than 1.6 billion a year in capital projects.
Similar to other companies I mentioned, CN has a stake in the timely flow
of goods between our countries. Why? Since the start of Canada-United States
Free Trade in 1989, two-way trade in goods has tripled and is only expected
to increase. The vast majority of goods cross the border by land: almost 5,300
rail cars and over 18,000 trucks daily.
Therefore, continued development of additional border capacity is critical.
We applaud the U.S. and Michigan and the Canadian and Ontario governments for
their efforts to construct a new international crossing over the Detroit River.
Minister Pupatello, I’d like to acknowledge your leadership
in this project, which will enable this continued growth and improve trade
flows between
the Midwest and Ontario.
As I noted at the beginning,
the Midwest and Ontario share powerful common strengths: common infrastructure,
industries and a lot in common culturally.
We share a large and powerful economic zone and deep interconnections, that
have become more important to us by our growing trade in goods as well as financial
services.
These common strengths and deep, long-term trade ties give me great confidence
that we can look forward to opportunities to do even more together.
As we all know, the current business environment does present some challenges,
but we also know there can be great opportunities at times like these.
I hope you see the opportunities for your businesses, so we can continue our
partnership and prosper together.
Thank you for your time today. |
