Canadian official touts free trade

Minister of industry says NAFTA nations should act as bloc

By David Milstead, Rocky Mountain News (Contact)

Monday, May 19, 2008

Jim Prentice's visit reflects state's growing link with Canada.

In a year when U.S. politicians are focusing more on the downside of free trade in North America, the conservative government to the north is singing its praises.

Jim Prentice, the Canadian minister of industry, said at a stop in Denver on Monday that his country should join the U.S. and Mexico in preparing for competition from other, unified blocs of nations.

"The three NAFTA partners must work together to ensure that the economy of this region is capable of taking on the economies of other regions," Prentice said. "We should stop thinking of competition and jobs in terms of the United States versus Canada or versus Mexico. The real competition is between North America and other economic regions, including Asia."

Canada is enjoying perhaps the healthiest economy in its history. That was unthinkable 20 years ago when the heated debate on free trade with the U.S. prompted suggestions of a loss of Canadian sovereignty and permanent colonial status to the superpower to the south.

The country's natural-resources boom - from oil, gas and hydroelectric power - is well-known. Less understood by foreigners is a 20-year trend of reducing the country's debt, once 75 percent of gross domestic product, down to less than 30 percent. The country and its provinces are now in budgetary surpluses, not deficits.

That's enabled Canada to sell itself as a place to do business, with an ever-declining federal corporate income tax rate that should drop to 15 percent in 2012. (The U.S. federal corporate rate can stretch to 39 percent.)

"From this position of strength, we have taken decisive action to build a tax advantage," Prentice said. "Between 2006 and this year, we are providing $21 billion in incremental tax relief to Canadians and Canadian businesses. That's the equivalent of about 1.4 percent of Canada's GDP."

His visit is the first for a Canadian Cabinet minister since the country opened a consulate, a special trade office, four years ago.

It reflects the growing Canada-Colorado connections in the energy industry. Encana, Suncor, Petro-Canada and Enerplus have all located their U.S. headquarters in the Denver area.

Prentice's trip includes meetings with Canadian companies doing business here, American companies considering doing business in Canada, as well as meetings with Gov. Bill Ritter and another about renewable energy.

Finance Editor David Milstead can be reached at milstead@RockyMountainNews.com or 303-954-2648.

• May 20, 2008

  8:53 a.m.

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  jackwoehr writes:

  Prentice is right on. The USA by itself is looking smaller and smaller as the rest of the world catches up technologically and economically. We need to think of North American Union like the European Union.