By Keith Norbury

In the immediate aftermath of the Sept. 11, 2001 attacks on New York City and the Pentagon, erroneous reports surfaced that the terrorists had entered the U.S. via Canada. While those reports were quickly proven false, an image persisted that Canada is a haven for terrorists and that its border with the U.S. needs to be tightened to prevent a repeat of those devastating attacks that killed nearly 3,000 people.

“We’re still living with that image unfortunately,” said Leah Littlepage, Director of Canada-U.S. and Transportation policy with the Canadian Chamber of Commerce, which published a report in 2010 on Canada-U.S. trade challenges. “But there’s also within the United States a very dominant concern about border security. Part of it stems from the situation on the southern border, which is obviously quite different than the situation on the northern border. And these security concerns affect anyone doing cross-border business. Anyone.”

That said, Ms. Littlepage and others interviewed for this article doubt that recent incidents of home-grown terrorism in Canada – including the bombing of a gas plant in Algeria, and a plot to set off pressure cooker bombs at the B.C. legislature this Canada Day – have led to any calls from within the U.S. trading community to tighten the border further. “I think decision makers understand the reality of the situation: homegrown terrorism exists anywhere,” Ms. Littlepage said.

Security no longer trumps trade

Jim Phillips, President and CEO of Canada-U.S. Border Trade Alliance, goes even further than that. “The old ‘security trumps trade’ is gone,” Mr. Phillips said. “And as long as you don’t lower the bar on what your security is, they (governments) are very interested in promoting concepts like trusted traders and known low-risk passengers and visitors, to get across the border much more efficiently than they have in the past.”

Emily Gilbert, Director of the Canadian Studies Program at University of Toronto’s University College, isn’t so sure, however. “My guess is that those people who already felt that Canada was a potential threat would only see more fuel added to the fire by those (recent) incidents,” said Ms. Gilbert, who wrote a paper in 2005 on Canada-U.S. economic relations in the wake of the Sept. 11, 2001 terrorist attacks.

Ms. Gilbert monitors U.S. media on this subject, although she cautioned that she doesn’t have her finger on the pulse of everything. “But there was relatively little said and there was even less public debate in the U.S or conversation around those incidents than you might have thought there could have been,” Ms. Gilbert said. “Not that I don’t think that policy makers and people who are concerned about these things haven’t been paying attention.” That said, she doesn’t think Americans fear Canadians pose a terror threat. “But I do think that at the policy-making level, that there is this sensibility to potential threat.”

Security worries date to Millennium threat

Ms. Gilbert noted that the U.S. preoccupation with security at the Canadian border pre-dated 9/11 when so-called Millennium Bomber Ahmed Ressam was caught trying to take explosives aboard the Coho ferry from Victoria, B.C., to Port Angeles, Wash., in 1999.

“We had this one incident that really got, I think, blown out of proportion when 9/11 happened,” Ms. Gilbert said. “But it’s been more than just that.” Before that incident, the U.S. was more concerned about security at the U.S. Mexico border. However, when Arizona native Janet Napolitano became secretary of Homeland Security, she transferred those concerns about U.S.-Mexican border security to the Canada-U.S. border as well, Ms. Gilbert said.

That Ressam had sought refugee status in Canada heightened concerns that Canadian approaches to immigration were more relaxed than in the U.S., Ms. Gilbert said. “Canada was seen as more of a terrorist threat than Mexico although there are obviously a lot of other security issues at the Mexico-U.S. border,” she said. Mr. Phillips, while discounting the notion that Canada is perceived as a terrorist haven, did characterize Canada’s lengthy refugee appeal process as “stupid,” and added, “that gets people frustrated.”

Authorities have “a good handle” on the risks

Peter Wallis, President and CEO of the Van Horne Institute, a transportation think tank at University of Calgary, said he’d be surprised if U.S. officials are overly concerned about border security in the wake of the Algeria and Victoria incidents. “I think the security authorities have a pretty good handle on the risk,” Mr. Wallis said. Nor does Mr. Wallis believe that cross border investments have been crimped because of a perception that businesses fear the border will tighten in response to those perceived threats. “When you look at the nature of the North American economy and how dependent we are on each other, it’s always a risk assessment. But my sense is that the threat of that security issue is not any higher (than previously),” Mr. Wallis said. He added that those in the transportation business are aware of those risks and work closely to minimize them. He is also encouraged by programs being introduced, such as electronic monitoring, that are further reducing those risk. “For example, for airplanes, the contents of what’s in the cargo in the hold is now known and understood to a much higher degree than it was in the past,” Mr. Wallis added.

Risk of losing investments not a big worry

What about the perceptions themselves, that Canada is a breeding ground for terrorists or has a leaky border? Is Canada at risk of losing cross-border investment because U.S. executives fear future security concerns?” “No. No. No,” Mr. Phillips said. “People use that as an excuse, but it’s not.”

Wendy Zatylny, President of the Association of Canada Port Authorities, said that isn’t even an issue she has discussed with Canadian officials. “However, I can say that various representatives, including from Transport Canada and Canada Border Services Agency, have been very diligent about consulting with the shipping industry overall, including the Port Authorities, to seek input on security and examination challenges, and how best to address those challenges in a manner that serves to protect the interests of Canadians while not unduly constraining cross-border trade,” Ms. Zatylny said in an email message.

Security can still “trump commercial relations”

Scott Sinclair, the Canadian Centre for Policy Alternative’s Senior Researcher on Trade and Investment issues, acknowledged that the border has thickened in recent years, even though he doesn’t think Canada is any big terrorism threat. But he noted that the image has persisted and even “tends to trump commercial relations.”

Mr. Sinclair said he would be surprised if border negotiations between Canada and the U.S. can ameliorate the friction of border security entirely. “I don’t think that there’s a strong appetite on the part of the United States to push the border out to the Canadian frontier and rely on Canadian enforcement as if it was their own,” Mr. Sinclair said. He is more worried that Canada won’t be vigilant enough in those negotiations, and might instead sacrifice sovereignty, data, and privacy to try to “achieve something that may not be achievable through negotiation.” “If it’s achievable, it’s probably more to do with the evolution of the American mindset,” Mr. Sinclair said. “And maybe as we get further and further away from 9/11 and major attacks, those concerns will lessen over time.”

Security obsessions “put sand in the gears”

An obsession with border security “puts sand in the gears,” said economist Sherry Cooper, financial advisor to MDC Partners Inc. “It reduces productivity and efficiencies.”

To illustrate that, she told about having to send perfume by truck to her mother in Florida because it exceeded the limit for shipping by air. “That’s obviously going to take longer and it’s certainly less efficient. But you can imagine what the implications of that are for businesses,” said Ms. Cooper, former Executive Vice-President and Chief Economist at Bank of Montreal. The consequences of terrorism are so great, though, that “the U.S. is justified in the fact that we all run this terrible risk and we’ve got to catch 100 per cent of them, if you miss one, you could end up with another disaster and catastrophe,” Ms. Cooper said.

Just in case shipping

The post 9/11 security environment has caused businesses to shift their logistic models from just in time delivery to “just in case,” Ms. Littlepage said. During the writing of the 2010 border report, the Chamber heard a lot of stories about how companies were warehousing supplies just in case of delays at the border.” “They’re sitting on stock just in case of a delay or some driver got turned away at the border. Obviously there are costs embedded in that,” Ms. Littlepage said.

David Bradley, President of the Canadian Trucking Alliance, said in an email that he has encountered similar tales. “However, the recession and the slow pace of recovery has mitigated that somewhat,” Mr. Bradley observed. “Obviously, following through on the Beyond the Border agreement, investing in modern border, highway and bridge infrastructure – all of which improve the efficiency, predictability and reliability of the supply chain – play an important role. There is still much work to do and our biggest enemy is complacency.”

A matter of life and death

A good example of cargoes that rely on an efficient border are medical isotopes, Ms. Littlepage said. Canada produces about of the third of the world’s supply, and almost all of North America’s. Used in nuclear medicine, some of the isotopes have very short half-lives. The half-life of molybdenum-99 is 66 hours, while technetium-99, the isotope used in the majority of nuclear medicine scans, decays in just six hours. “There is such a short viable lifespan that they have to be just in time,” Ms. Littlepage said. “So the companies that deal with medical isotopes are some of the ones that are most heavily engaged in making the border more efficient. Because it’s life-saving technology that really depends on being able to cross the border in a predictable manner.”

Not a day goes by, Ms. Littlepage said, that she doesn’t receive a call from a Chamber member talking about a problem at the border. “And I think the highest level of governments understand that they have to find a balance between security and trade,” Ms. Littlepage said. “But it can be difficult to find that balance. And I think it’s a real concern that if it comes down to the wire and they have to choose between trade and security, some camps will want to choose security.”