US embassy cable - 05HALIFAX210

UNCLAS SECTION 01 OF 02 HALIFAX 000210 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL, ETRD, PGOV, ASEC, ENRG, CA 
SUBJECT: ATLANTIC CANADA:  PREMIERS TALK TO THE AMBASSADOR ON 
REGIONAL ISSUES 
 
REF: A) HALIFAX 176; B0  HALIFAX 190; C) HALIFAX 209 
 
1.  (U)  SUMMARY:  The Ambassador's trips to Atlantic Canada 
have now given him the opportunity to meet with each of the 
region's four provincial Premiers.  All profess interest in 
strong and close trade relations with the U.S. and all have been 
active in engaging their American counterparts in state 
governments on bilateral concerns.  Key issues for the Premiers 
include softwood lumber and their perception that tightening 
border controls are hurting trade and will harm traditions of 
cross-border cooperation, cutting travel and tourism in both 
directions.  END SUMMARY. 
 
THE ATLANTIC PREMIERS 
--------------------------- 
 
2.  (U)  Ambassador Wilkins has made five trips to Atlantic 
Canada during his first few months in office, meeting a lot of 
people with each visit, including the four provincial Premiers. 
The region's historic ties of family and commerce to the U.S. 
have been brought out by the Premiers in their conversations 
with the Ambassador.  They have also given him a flavor for some 
of the issues that confront the provincial governments in this 
"have-not" region of the country.  For each province, relations 
with the U.S. are vital to the economy, whether in the case of 
energy development and exports from Nova Scotia and 
Newfoundland-Labrador, export markets for New Brunswick or 
tourist visits in the case of Prince Edward Island. 
 
3.  (SBU)  Although Atlantic Canada bucked a national tide in 
the last federal election and remained largely loyal to the 
Liberal party, at the provincial level the story is a different 
one.  Each provincial government is led by the Progressive 
Conservative party, something that adds an additional level of 
complexity to already-complicated federal-provincial relations. 
For Atlantic Canadian Premiers the solutions to a number of 
their most pressing concerns -- for example seeking to carve out 
lumber exports from the region from U.S. duties -- lie with the 
federal government and its management of relations with the U.S. 
and are not within provincial jurisdiction.  Issues such as 
ballistic missile defense and participation in Operation 
Enduring Freedom that have contributed to "scratchiness" in 
bilateral relations are likewise out of their control (although 
one Premier, Danny Williams, has been outspoken in his support 
for missile defense).  This can lead provincial leaders -- 
particularly those in the small and relatively poor provinces of 
Atlantic Canada -- to feel regularly buffeted by large and 
rather impersonal forces as relations between Ottawa and 
Washington rise and fall.  Each of the Premiers is usually 
careful to stress that contentious issues are the fault of 
"those guys in Ottawa," not the friendly people of Nova Scotia 
or PEI. 
 
4.  (SBU)  Although the issues of Quebec separatism and Western 
alienation get most of the attention from those who worry about 
the future of the Canadian Confederation, talks with the 
Premiers tend to contain an undercurrent of alienation from 
Central Canada as well.  Because the provinces are so dependent 
on Ottawa and equalization payments derived from the "have" 
provinces, that alienation tends to manifest itself in muttering 
rather than the outright defiance of other places.  As a 
prominent economist in the region said:  "We are as alienated as 
the West, but because we don't have any oil no one pays 
attention."  With the increasing development of offshore energy 
resources may come as well an increasingly assertive attitude 
from the East. 
 
NEW BRUNSWICK 
----------------- 
 
5.  (SBU)  Premier Bernard Lord raised a number of issues with 
the Ambassador during their lunch in Fredericton, first among 
them softwood lumber.  Lord noted the market-based structure of 
the industry in his province and the region, which stands in 
contrast to the provincial "stumpage" regimes in other 
provinces, and urged that the Atlantic provinces be exempted 
from the duties assessed on Canadian lumber.  As the only 
Premier in the region whose province shares a border with the 
U.S. Lord also drew attention to proposed changes in border 
crossing documentation requirements, noting that requiring a 
passport would cut travel significantly and in the process harm 
good relations built up over generations in small towns all 
across the border. 
 
6.  (SBU)  Lord, who is often cited as a potential Conservative 
leadership contender should Steven Harper leave the job, 
stressed the importance that he and his province attach to 
friendship with the U.S.  He offered to help the Ambassador 
better understand some of the complexities of Canadian 
federal-provincial politics and said he would be happy to offer 
his thoughts on bilateral issues whenever they might be useful. 
(COMMENT:  Lord's is definitely a phone number to keep handy in 
the Rolodex.  END COMMENT.) 
 
NOVA SCOTIA 
-------------- 
 
7.  (U)  John Hamm told the Ambassador when they met that 
softwood lumber was a key issue for Nova Scotia.  Like his 
counterparts he stressed the need to keep the border open and 
the trade flowing.  He expressed satisfaction at the resolution 
of the restrictions on Canadian beef imports and noted the major 
role that U.S. trade and investment has in the Nova Scotia 
economy, particularly in the offshore energy sector and the 
pipeline that runs across the province taking Sable Island 
natural gas to markets in the Boston area.  Hamm has frequently 
stressed the warm relations between the people of the province, 
particularly Halifax, and those of Boston; the province sends a 
Christmas tree to Boston every year as a token of thanks for the 
immediate assistance provided after the Halifax explosion of 
1917 killed nearly 2,000 and devastated the north end of the 
city. 
 
8.  (SBU)  Hamm's just-announced plan to retire once his 
successor is chosen should not affect our relations with the 
province.  (See ref C.) 
 
NEWFOUNDLAND-LABRADOR 
--------------------------------- 
 
9.  (SBU)  Premier Danny Williams's top issue when he met with 
the Ambassador was training by U.S. military and National Guard 
units at 5 Wing Goose Bay in Labrador.  More than other 
Premiers, Williams has focused on defense and security issues, 
calling publicly for the federal government to support missile 
defense and increase coastal patrols by the military and the 
RCMP to keep out drug smugglers and potential terrorists. 
Williams said he appreciated USG forthrightness in discussing a 
satellite launch that appeared to have the potential to drop 
debris near offshore oil facilities and force their shutdown. 
In addition to 5 Wing he also appealed for USG support to 
prevent overfishing and depletion of fish stocks on the Grand 
Banks. 
 
10.  (U)  Williams was clear on the importance of the U.S. to 
Newfoundland-Labrador and on his desire to establish a good 
relationship with the Ambassador.  He was particularly impressed 
that the President brought up the issue of overfishing when 
Williams saw him during the December visit to Halifax.  Williams 
clearly understands the importance of the U.S. market for 
Newfoundland-Labrador's current and potential energy exports, 
both offshore oil and hydroelectric power from the proposed 
Lower Churchill Falls hydroelectric development, as well as iron 
ore and nickel exports from Labrador. 
 
11.  (U)  Perhaps more than other Premiers, Williams stressed 
the personal side of his province's relations with the U.S., 
recalling the significant numbers of U.S. military personnel who 
were stationed in Newfoundland-Labrador both before and after 
the province joined Confederation.  He highlighted the 
importance of family ties, in particular the numbers of 
Newfoundland women who married Americans and moved to the U.S., 
as well as the numbers of Americans who settled in the province 
after their marriage to Newfoundlanders. 
 
PRINCE EDWARD ISLAND 
------------------------ 
 
12.  (U)  Premier Pat Binns told the Ambassador that the free 
flow of trade was essential for PEI, particularly agricultural 
trade such as potatoes.  He said that, with tourism a major 
source of employment on the Island, anything that would slow 
down or deter tourists from the U.S. would have a negative 
impact on the economy.  Unlike his counterparts, Binns had no 
specific current problems to raise; the province has little 
forest land and no significant softwood lumber production. 
 
COMMENT 
----------- 
 
13.  (SBU)  Although the four Atlantic provinces are different 
in many respects, they all share longstanding ties to the U.S. 
that in many cases predate the establishment of both countries. 
They also share a reliance on U.S. markets and tourists for 
economic growth.  In their talks with the Ambassador the four 
Premiers have all been careful to highlight the positive while 
noting areas of concern like softwood lumber and tightening 
border controls. 
 
HILL