The U.S. is in a foul mood at home and abroad. Embassies have been shuttered in an unprecedented fashion. The economy continues to limp forward and the political polarization of Washington is more intense than ever. Both Congress and the administration undoubtedly welcome the summer break.
For his part, President Obama is on the speaking circuit acting for all intents and purposes as if the 2012 campaign is still running. His rhetorical lunges even include occasional swipes at Canada.
U.S. attempts to wield influence around the world have been blocked on many fronts — from the Snowden episode and other disputes with Russia to the unravelling of events in Egypt, the steady deterioration of the civil war in Syria and, of course, the nuclear ambitions of Iran. Most serious at the moment is the spat with Russia, which undoubtedly will cloud consensus at the forthcoming G-20 summit in St. Petersburg.
In addition to granting asylum to Snowden — and presumably gaining access to whatever “intelligence” he has not already leaked — Vladimir Putin, for added insult, sent a guided missile warship on a visit to Cuba. So much for that “reset”; America’s relationship with Russia is now, as Michael Crowley observedin Time Magazine, “about as warm as a pool party in Siberia” in the depths of winter. And there is not really much that President Obama seems able to do about any of it.
The problematic state of America’s relations around the world do not improve closer to home. The president’s continuing procrastination over the Keystone XL pipeline lurched sideways yet again last week when he fabricated low employment numbers for the project out of whole cloth, ignoring substantially higher numbers from his own State Department. The president’s assertion that oil via Keystone is “going to be piped down to the Gulf to be sold on world markets” is wrong, in fact and in U.S. law. (The U.S. Export Administration Act explicitly restricts the export of crude except to Canada and Mexico.) His latest comments on Keystone earned him two ‘Pinocchios’ from the Washington Post fact-checker. His remarks are not worthy of a neighbour and ally.
The U.S. also continues to stonewall over labels on Canadian beef, ignoring rulings by the WTO, and now demands that its pre-clearance Customs agents operating in Canada to facilitate travel and tourism to the U.S. do so without adhering to Canadian law. We continue to get the short end of the stick from the auto bailout, as the share of Canadian vehicles shipped to the U.S. market has shrunk by 25 per cent in recent years. Adding insult to injury — and showing how little we count in the affections of the White House — the administration has not yet announced who the next ambassador will be to Ottawa, notwithstanding the fact that appointees are in play for every other G8 country.
All of this negative behaviour makes the Canadian government’s open door policy toward U.S. telecom giant Verizon all the more puzzling. Why — and why now? The ostensible reason is to induce greater competition in Canada’s wireless market; in reality, it’s a Hail Mary gesture to patch up the mess created by rules and decisions which earlier favoured the entry of several small fly-by-night players who are, in one way or other, now heading for the exit.
There is a decided mix of perception and reality in this debate. It is no surprise that Canadians generally are reluctant to pay monthly bills for anything like telecom and Internet service, especially when the bills often can only be deciphered by trained accountants. But it is not true that the prices in Canada are, as asserted by some critics, the highest in the world. Independent studies suggest, in fact, that pricing in Canada is in “the middle of the pack among OECD countries“, higher than in the U.K. but lower, much lower, than in the U.S.
There is also a perception abroad that the Big Three Canadian telecoms — Rogers, Bell and Telus — stifle competition from smaller players, most of whom offer service by piggybacking on the networks of the Big Three and have invested little more than advertising costs in launching operations in Canada. But there are more than three successful players in the market — Eastlink, Videotron, MST (Manitoba) and SaskTel being among them.
In fact, if either perception were true, these would be issues more appropriate for the Competition Bureau and possibly the CRTC to address. Instead, we have seen a patchwork of rulings, counter-rulings and decisions by the government intended to gerrymander the system to favour new entrants, including giants like Verizon, in order to induce more competition in our market.
The politics of ‘fighting for consumers’ has obvious attractions — but when the consequences do not deliver and when governments repeatedly try to manipulate rather than regulate markets, the outcome is universally negative. Shareholders, employees and company executives are united in expressing concern with the federal government’s approach, and have gained broad support for their position. The government should reflect carefully on what its decisions to date have wrought and what its real objectives are before proceeding further in the same erratic direction.
This is certainly not the time to grant special access to a giant U.S. telco, access that no Canadian telco could ever expect to get in the U.S. market. Instead, we should be signalling clearly to Washington that actions against substantial Canadian interests carry consequences — not rewards.
In an increasingly turbulent world, the U.S. has few friends as reliable as Canada but reliability needs to run both ways. We should not have to emulate Mr. Putin to make the point.