The border crossing at Highgate Springs in Vermont separates miles of sparsely populated Vermont farmland from, well, miles of sparsely populated Quebec province farmland. It’s a common but bucolic crossing for NH businesspeople traveling to the state’s prime trade partner and vice versa.
While the landscape may be similar on either side of the border, there are some stark differences, starting at the border itself where American customs officials are known to be less welcoming, a fact reiterated by NH business people who regularly travel north. When I traveled to Canada last spring with NH business recruiters Michael Bergeron and Benoit Lamontagne, I experienced this after we innocently switched from a longer line to one with fewer cars on our way back into Vermont at Derby Line.
This March, I crossed the border in a tour bus with executives from chambers of commerce around the state and state economic development officials. Entering Canada took a long time, but that was because we stopped to tour both sides of the border. Standing in a room where agents store confiscated materials and inspect incoming loads, Assistant Port Director Eric Laroche of U.S. Customs explains the role of border agents. “Do I want you to be too comfortable? No, not really. The sign of a good officer is you make them feel a little uncomfortable, but they give you more information than they think,” says Laroche. The reason for the concern, he says, is 9-11. “We have 30 to 60 seconds to make sure they won’t do anything to you or anybody else. Everything that gets through is coming into this country.”
But there are changes brewing to make the lives of business people and frequent border travelers more pleasant. It’s called a NEXUS card and while Laroche says “way less” than 1 percent of people crossing at Highgate Springs have one, this is slowly changing. The NEXUS trusted traveler program is a bi-national program jointly administered by Canada Border Services Agency and U.S. Customs and Border Protection for low-risk, pre-approved travelers into Canada and the United States.
The program was piloted 14 years ago and reached widespread implementation just three years later. Last year, it surpassed 1 million members, up 50 percent since 2011.
With that card, drivers use a separate lane with a video camera and are greeted remotely by a customs official who sits at a computer in the customs building. Drivers show their card to the camera so custom officials can verify their identity. Outdoor cameras then sweep the vehicle to check who and what is in the car. These exchanges take less than a minute.
The Trade Landscape
Canada is NH’s biggest trade partner, with exports for 2014 totaling $783.5 million, or 18 percent of all NH exports. That was down 38 percent from 2013 due to a large drop in crude oil. New Hampshire’s top exports to Canada include optical, medical and precision instruments ($41 million), plastics ($33 million) and softwood lumber ($22 million).
Bruce A. Heyman, the U.S. ambassador to Canada, looks at these numbers and sees opportunity. “The obvious trading relationship is next door,” Heyman says in a phone interview from Select USA, an economic development and investment summit held in Washington D.C. in late March. He notes the percentage of foreign-bound goods to Canada could be significantly higher. “I see opportunity to increase the percentage of foreign-bound goods sent to Canada.”
During the tour of the U.S. Customs in early March, Heyman touts the trusted traveler program. “We are always looking for ways to make it easier for small businesses to export and do business across the border,” he says.
The border may be an annoyance for businesses looking to move goods, but the real challenge for NH when it comes to trade is money to help businesses export and to attract Canadian companies to invest in NH. Adding to that challenge is the steep difference in energy costs. During the March bus tour, our first stop on the second day of the tour in Montreal is Hydro Quebec headquarters. Quebec is unique in that 97 percent of its energy is provided by hydropower, and the main shareholder in Hydro Quebec is the government. About 75 percent of Quebec households heat with electricity because it’s cheap. Electricity in Quebec cost between 4.5 cents and 9 cents per kilowatt hour in 2014 depending on usage; New Hampshire rates are now between 13 cents and 19 cents per kilowatt hour depending on usage as of April, close to three times that of Quebec.
During the tour, it quickly becomes obvious Canadian officials are investing substantially more in trade efforts. Investissement Quebec provides experts and services to help international businesses locate to Quebec. It has 12 offices in Europe, Asia and the Americas. Montreal International has a budget of about $9 million and 60 employees, says Elie Farah, vice president of Investment Greater Montreal for Montreal International. The majority of its funding is from the government, with only 10 percent from the private sector. The organization attracts $800 million to $900 million a year in foreign direct investment, money spent by foreign companies in Greater Montreal, which is home to 4 million people. Recruitment efforts are focused on IT (where the Quebec government provides a 24 percent tax credit to keep IT jobs), manufacturing and life sciences.
Courting on the Cheap
Walking out of the meeting at Montreal International, Carmen Lorentz, state economic development director, shakes her head in disbelief. “We have no budget for recruiting,” she says. (In fact, the visit by chamber executives was paid for by the office of the Canadian Consulate General in Boston.) The NH Division of Economic Development had no money for out-of-state travel in the two-year budget ending this month, though Gov. Maggie Hassan requested $107,000 in the next two-year budget for out-of-state travel so state officials can increase their efforts to attract businesses to NH. Budget negotiations underway at press time had not decided the fate of this line item.
“Canada is a strategic market for us from an international trade perspective,” says Jeff Rose, commissioner of the NH Department of Resources and Economic Development. “It’s also a strategic market for job recruitment as well as travel and tourism. We have a plan in place depending on the level of funding we receive.” Rose did not elaborate on what the different plans entailed, but NH recruiters now raise funds from private businesses to pay for recruitment efforts.
The good news is Canadian investment efforts could also land NH more business. The Federation of Quebec Chambers of Commerce launched COREX Opportunities in March, a new online B2B networking platform to help Canadian companies connect with Northeastern United States trade partners. The online platform allows businesses to post and search for opportunities for trade in goods and services. The Quebec federation includes more than 140 chambers and 1,100 corporate members.
Gov. Maggie Hassan continues to reach out to Canadian leaders to strengthen economic ties. She hosted an annual meeting of the eastern Canadian premiers and the New England governors last July and is traveling to Newfoundland this summer for that same meeting, where trade is a key topic. “We continue to work closely with our Canadian neighbors. It is important for the travel and tourism relationship and the economy,” Hassan says.
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