Canada: A Compendium

The United States and Canada have extensive ties that encompass a number of areas, including trade, security, the environment, and international affairs. The two countries cooperate widely in international security and political issues, both bilaterally and through numerous international organizations. Since September 11, 2001, the United States and Canada have cooperated extensively on efforts to combat terrorism Canada’s foreign and defense policies are usually in harmony with those of the United States. Areas of contention are relatively few, but sometimes sharp, as was the case in policy toward Iraq.

Border security is a major concern in the post-9/11 world. The two countries have launched a number of initiatives that attempt to better secure the common border without unduly disturbing legitimate travel and commerce. Under the Bush Administration, the United States, Canada, and Mexico created the Security and Prosperity Partnership, which was intended to provide security for the continent against criminal activities and external threats, while easing the flow of goods and travelers who cross the borders. It also aimed to boost prosperity through promoting cooperation in a number of areas, such as regulations.

The United States and Canada maintain the world’s largest trading relationship, one that has been strengthened over the past two decades by the approval of a bilateral U.S.-Canada Free Trade Agreement and the trilateral North American Free Trade Agreement (NAFTA). Aspects of the NAFTA may be reviewed by the Administration and Congress as U.S. trade policy comes under increased scrutiny. Although commercial disputes may not be quite as prominent now as they have been in the past, the two countries in recent years have engaged in difficult negotiations over items in several trade sectors, affecting only a small percentage of the total of goods and services exchanged. The issue that is currently causing the most controversy is the “Buy America” provision that was added to the U.S. economic stimulus package (American Recovery and Reinvestment Act of 2009, PL 111-5). The measure essentially would require that public works projects paid for by stimulus funds be completed with raw and manufactured materials of U.S. content. While the United States maintains that this provision is being implemented consistent with U.S. trade obligations, Canadians object that the provision is protectionist, and is contrary to U.S. obligations under the WTO Agreement on Government Procurement, and the NAFTA. Canada is the United States’ largest supplier of energy—including oil, uranium, natural gas, and electricity—and the energy relationship has been growing.

The U.S. and Canada work together on environmental matters. The effects of the extraction and processing of Canada’s oil sands are an issue of concern. Among other effects, the U.S. and Canadian environmental and scientific communities are concerned about the potential risk of oil sands development for migratory birds. The two countries also have been discussing restoration of the Great Lakes, as well as the possible impact that climate change might have, including alteration of habitat for marine wildlife. Also, global warming is forecast to open a channel through Canada’s northern archipelago, creating a so called “northwest passage” that Ottawa holds would be a Canadian inland waterway and the U.S. and other nations hold would constitute an international strait, open to international navigation. Canada’s sovereignty claim raises commercial, environmental, and security issues..


Date of Report: October 23, 2012
Number of Pages: 277
Order Number: C-12008
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