By: Barsha Hazarika, Research Analyst, GSDN

President Joe Biden famously said, “The United States has no closer friend, partner, or ally than Canada.  Over the past 150 years, our two countries have built one of the closest and most extensive relationships.”

The importance of Canada to the US is manifold; they share not only the same values like democracy, justice, freedom, similar lifestyles, history, and aspirations but also are linked by geography and security, and the two countries stand as a modern example of interdependence and cooperation.

The US and Canada are far more integrated than most people think. Two nations occupying the bulk of North America and share the world’s longest undefended border, each reliant on the other for trade, continental security, and prosperity. In other words, both share a longstanding commitment to cooperation in the Western Hemisphere in support of democracy, the rule of law, human rights, economic growth and opportunity, free trade, humanitarian assistance, and sustainable development. They also work closely in counternarcotics, conflict resolution, defense cooperation, and institutional reform.

In still other ways, the Americans consider the Canadians closer to them than any other people in the world. Both Americans and Canadians are very much similar in character. The Anglo-Canadians speak the same language. Canadian English is American English. The people of Canada are descended from much the same stock—half from the British Isles and half from continental Europe. Canadians and Americans have matured together in the same environment. On either side along the boundary, from the Atlantic to the Pacific, the pattern of daily life is much the same.

Strategically, the size of Canada and a stable and friendly neighbour rather than a hostile power is an asset to the US. This Canadian Shield is situated to the north above the Great Lake; it is the world’s largest area of Precambrian rock, much of which forms a barrier to human settlement.

Economically, the countries are one another’s most prominent investors, customers, and suppliers. Canada, as their largest trading partner, nearly $2.6 billion in goods and services crosses their shared border every day – an almost 20 percent increase in 2022 over the previous year.

Canada has also moved up to be the leading foreign provider of critical petroleum products to the US; it ships roughly 2.5 million barrels a day (out of the total consumed of 19.4 million barrels daily) and is an essential source of electrical power, uranium, metals, minerals, natural gas, and automobiles. In return, Canadians buy more U.S. products than does the entire EU.

Many assume that China or Japan is the leading trading partner of the US. According to reports, the US exports almost three times more to Canada than Japan and 12 times more to Canada than China.

U.S. corporations own roughly 12 percent of Canada’s corporate assets, nearly half of its oil industry, and most of its manufacturing. Canadian corporations are the third most prominent investors in the United States, and Canadian foreign direct investment levels are also third in the U.S. At the same time, the U.S. is the largest investor in Canada, according to 2022 data.

The policy opinion politiques states that Trade, direct investment, and tourism linkages between the US and Canada roughly account for over 3 million US jobs.

According to data, with a population of 38 million, Canadians spend more than 60 percent of their disposable income on U.S. consumer goods. In 2020, Canada ranked as the top export market for 32 of 50 states thanks to numerous commonalities, like geographic proximity, cultural affinity, brand recognition, and ease of doing business.

Their partnership is also sustained by string trade frameworks that lower entry barriers. The Agreement between the United States of America, Mexico, and Canada (USMCA) supports excellent regulatory practices and North American competitiveness. The Roadmap for a Renewed US-Canada Partnership, released in February 2021, establishes a framework for enhanced cooperation between the two countries in critical sectors, including economic growth, pandemic recovery, combating climate change, and tackling global concerns.

Canada is also important to the US for security and defense partnership,just as the United States is to Canada. For the United States, Canada is an indispensable ally in the defence of North America. Since President Roosevelt and Prime Minister Mackenzie King signed the Ogdensburg Agreement in 1940, recognizing the indivisible nature of continental security and pledged mutual assistance in the event of war, Canada-US defense cooperation has endured more than five decades of changing challenges.

The strength of this mutual commitment is illustrated by the North American Aerospace Defence Command (NORAD), the centerpiece of the US-Canada military relationship. US and Canadian forces jointly conduct aerospace warning, aerospace control, and maritime warning to defend North America.

This relationship is also significant as both countries work together in several key security partnerships, including the Five Eyes (an alliance of intelligence agencies of Australia, Canada, New Zealand, the United Kingdom, and the United States) and NATO. Canada’s intelligence capabilities are crucial to the United States regarding the former’s ability to contribute to common alliances and partnerships because violent extremists based in Canada can threaten the United States. 

This north-south migrationhas been constant throughout history. Millions of Americans have Canadian roots, including well-known figures like Ellen DeGeneres, Alec Baldwin, Vince Vaughn, Madonna, Angelina Jolie, Hillary Clinton, Sarah Palin, Jack Kerouac, Walt Disney, Walter Chrysler and Thomas Edison.

The population flow has likewise shifted northward. More than one million Americans live in Canada, and their children, even if born there, are eligible for US citizenship. This intermingling of population between Canada and the United States has been much more significant and has been going on much longer than most realize. It began even before the American Revolution. As a result of this ebb and flow, about 1.5 of the 11.5 million people living in Canada are of United States origin, and there are about 5 million Americans of Canadian ancestry.

Thus, people have moved freely across the Canadian-American border from generation to generation, from the Atlantic to the Pacific. There has been nothing like it anywhere else, and it has produced an international intimacy.

Tackling the climate crisis is a crucial issue for the United States. And it sees Canada as a reliable partner – their largest energy trading partner- as both are committed to taking decisive action. The US is committed to growing the clean energy economy by lifting legislation like the US Inflation Reduction Act to accelerate the clean energy transition and make North America a clean energy powerhouse. They have signed agreements like the US–Canada Air Quality Agreement (AQA) in 1991. The agreement includes commitments by both countries to address acid rain and ground-level ozone. Under the agreement, the United States and Canada also cooperate on science and research topics such as wildfires, ammonia, and methane as an ozone precursor.

Problems of the Canadian-American relationship

Though generally close, relations between the US and Canada have changed over the past three decades. The two North American countries cooperate widely in international security and political issues bilaterally and through numerous international organizations. Canada’s defense and foreign policies are usually in harmony with the United States. Areas of contention are relatively few but sometimes sharp, as in policy toward Iraq.

Canadians are far more concerned by what they perceive to be American paranoia. Clearly, Canadians cannot afford to ignore the American state of mind. The Canadian economy, which is tightly linked to the US economy, is influenced by decisions made in Washington, and many Canadians are vulnerable to ideas and emotions of fear emerging from the US.

To sustain a viable relationship with the US, the Canadian government adheres to the notion that Canada should not be a source of uneasiness and concern for the American government and its people. As a result, Ottawa ensures that no anti-US organization exists within Canada. This is the price Canada pays if it wants the Americans to leave the border open for trade and refrain from interfering in Canadian domestic security problems.

In fact, it is debatable whether the damage to Canadian identity is greater than the challenge to sovereignty. To summarise, Canada, with an economy and society inextricably linked to those of the United States, cannot afford to disregard American concerns and must, with prudence and clarity, put measures in place to cope with what Washington regards as threats.

Furthermore, the political focus of the United States is moving from the Northeast to the South and Southwest. With a reduced (if not eliminated) need to depend on Canada to defend US soil from a Russian missile attack over the North Pole, Washington increasingly treats Canada as a nation just like others. It also, and more importantly, indicates that Mexico’s relevance has grown in the eyes of the United States. The signing of NAFTA has hastened this process, the inclination to focus on the South and the United States’ relationship with Mexico.

The numbers suggest a strong reason for this change in emphasis. Mexico’s rapidly growing economy is home to more than 100 million people – over three times the size of Canada’s population and Spanish is quickly becoming the unofficial second language of the United States. The statistics point to a solid basis for this shift in emphasis. The same is true for Mexico and Canada; the United States has become an overwhelmingly significant market, accounting for about 90% of its exports. Mexico’s economic revival will increase competition for companies from Canada exporting to the United States.

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