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| President Barak Obama Presents Jobs Plan |
Above is a link to a very good editorial in the Hamilton Spectator that emphasizes the impact to both Canada and the US economic recovery.
The problem with this plan is just as true for the American economy as it is for the Canadian economy.
For example, an American company that makes a water pump for a sewage treatment plant may source some of its component parts from Canada. Perhaps these parts make up 5% of the cost of the pump. Under the proposed legislation, the American company that is producing a 95% American manufactured product is disqualified from federally funded infrastructure projects.
This is not an unusual scenario. During the last go round, American companies that were negatively affected got busy organizing their protests against the unintended consequences of disqualifying Canadian content. A long list of major manufacturing organizations wrote letters to President Obama indicating their displeasure and asking for changes in the legislation.
Unfortunately, during the last Buy American program the deal that exempted Canadian content was only reached at the very end of the legislation's life and so the beneficial effects were minimal.
It would seem that legislators in Washington are uninformed of the true nature of the trading relationship between the US and Canada. There is an integration that exists that is quite remarkable. A product made in the US may use Steel that began in the US, traveled to Hamilton for processing and then went back to the US for assembly. Yes, the product was assembled in the US and was predominantly produced there but the brief journey across the border contaminated the total product and disqualified its use in federally funded infrastructure.
When the issue is jobs, anything that strangles the US-Canada trading relationship is counter productive for both economies. Kudos to Minister Edward Fast for jumping on this issue immediately.
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