Viewing cable 03OTTAWA374, AMBASSADOR'S LUNCH WITH TRANSPORT MINISTER

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 OTTAWA 000374 
 
SIPDIS 
 
STATE FOR OES-JULIE KARNER; WHA/CAN-PATRICIA NORMAN AND 
ERIC RUNNING 
STATE FOR EB/TRA-JOHN BYERLY, SUSAN PARSON AND DEB ELLIOT 
USDOT FOR JEFF SHANE AND MARY STREET 
OFFICE OF HOMELAND SECURITY FOR CHRIS HORNBARGER 
 
E.O. 12958: N/A 
TAGS: EAIR SENV ECON CA
SUBJECT: AMBASSADOR'S LUNCH WITH TRANSPORT MINISTER 
COLLENETTE 
 
 
¶1. (U) THIS MESSAGE IS SENSITIVE, BUT UNCLASSIFIED. PLEASE 
TREAT ACCORDINGLY. 
 
SUMMARY 
--------- 
¶2. (SBU) Transport Minister Collenette indicated to 
Ambassador on January 31 that the GOC is ready to start 
"exploratory talks" on further aviation liberalization with 
the United States. Collenette admitted that his government 
sees little in cargo co-terminalization for Canada - too many 
small cargo jobs would be lost and Hamilton's future as the 
cargo hub in Canada would be threatened. He suggested two 
longer-range topics: how to deal with the EU and what the 
"North American air zone" is likely to be ten years from now. 
 When pressed, however, Collenette said that there was no 
aviation issue that the GOC would preclude from discussion. 
In sum, talks should start with no preconditions. After all, 
the Deputy Transport Minister added, in the two years leading 
up to the current Open Skies agreement, there were 
far-ranging talks that helped to lay the groundwork for the 
quick successful agreement we did reach. It seems we are 
ready to embark on a similar period now, Ranger concluded. 
 
¶3. (SBU) On other issues, Collenette agreed with the USG that 
the European Commission's recommendation to have Galileo use 
the same frequencies as those used by the military makes no 
sense and the GOC will support our efforts to counter the EC. 
 There was also a brief discussion of infrastructure issues 
at major land border crossings, with Collenette remarking 
that more inspectors are needed to help reduce line-ups. End 
Summary. 
 
¶4. (U) Canadian Minister of Transport David Collenette hosted 
Ambassador Cellucci over lunch on January 31. His Deputy 
Minister Louis Ranger and Chief of Staff Sue Roland joined 
Collenette. DCM and Econ MinCouns accompanied the Ambassador. 
 
Galileo 
--------- 
¶5. (SBU) Ambassador began the working lunch with a short 
explanation of why the USG is deeply concerned with the 
European Commission's recommendation that Galileo uses the 
same frequencies as those used by the military. The Minister 
said he was very familiar with the issue and could not agree 
more with the US position. While he does not have the lead 
in Cabinet on this, other ministers are aware of the problem 
and all are united that the Europeans should abandon it. 
 
Homeland Security 
----------------- 
¶6. (SBU) Collenette then went on to say that he and other 
senior GOC officials are quite anxious to get to know the new 
USG Homeland Security team. At various times during the 
lunch, the Minister explained the excellent state of working 
relations with USG officials over the years and his desire 
(along with other Cabinet members) to establish the same with 
Homeland Security. Ambassador encouraged Collenette in this 
regard, but suggested he wait until after March 1 to allow 
DHS time to complete its first organizational tasks. 
 
Aviation 
--------- 
¶7. (SBU) Then a long discussion of aviation issues ensued. 
The Ambassador started with suggesting that exploratory 
discussions of where we might make further steps in 
liberalization could start. "We ought to start talking," the 
Ambassador said. In response to Collenetee's questions, the 
Ambassador acknowledged that cabotage remains a tough issue 
for us. The Ambassador then highlighted the benefits to both 
sides of cargo co-terminalization. Collenette described the 
benefits of the current cargo system - small Canadian 
carriers, operating out of the hub in Hamilton - and how if 
Canada were to grant co-terminalization, these jobs would be 
lost and the Hamilton hub (now the largest cargo hub in 
Canada) will cease to exist. The uproar just caused by 
Culture Minister Sheila Copps (MP from Hamilton) would be 
enough on its own to stop co-terminalization in its tracks. 
While later admitting to the Ambassador that real benefits 
would accrue to small and medium size Canadian business from 
such a liberalization, the polit 
ical costs would just outweigh any benefits, he concluded. 
 
¶8. (SBU) That said, Collenette then went on to describe the 
benefits of the open skies agreement of several years ago. 
Canadian carriers were the big winners (which they never 
thought they would be - at one point they even asked 
Transport for a 15 year phase in period, Collenette 
chuckled), and while the issues now before us are tough nuts 
to crack, both sides should be prepared to talk. Air Canada 
is "very competitive" and therefore would benefit from 
further liberalization, explained the Minister. However, the 
smaller Canadian carriers, such as West Jet, "could go 
belly-up." Louis Ranger said that before Open Skies was 
successfully negotiated, there were at least two years of 
preliminary meetings. Ranger wondered if we were not at the 
same starting point right now - while both sides sees little 
interest in catering to the other's needs, now is the time to 
start "exploratory talks." When pressed by the Ambassador 
for advice, the Minister was unable to suggest any Canadian 
business group whose endorsement of further liberalization 
would give the Liberal Government "political cover." In 
fact, Collenette opined, the probable successor to the 
current PM - Paul Martin - is probably less likely to support 
further liberalization ("more nationalistic") than the 
present administration. Two specific agenda suggestions of 
the Minister were: how to deal with the EU, and what the 
"North American air zone" is likely to look like ten years 
from now. 
 
(Note: in a February 5 meeting with senior UPS officials, the 
Ambassador asked them about the effects of liberalizing air 
cargo on the future of the Hamilton hub. They quickly 
replied that UPS had invested quite a bit in Hamilton and it 
would continue to be an important part of UPS's cargo 
operations. In fact, they said that if liberalization were 
reached, Hamilton would likely to grow in investment and 
jobs. Toronto Airport has too many flight restrictions and 
no room for cargo expansion. End Note) 
 
St. Lawrence Seaway 
------------------- 
¶9. (SBU) Ranger then switched topics to the St. Lawrence 
Seaway. There was a request made to the IJC to investigate 
deepening of the Seaway - it was to cost US$20 million - half 
paid by each government. Where did it stand? We did not 
know, but said we would get back to the Minister. Collenette 
said that he recently had meetings with the Georgian Bay 
residents who are very concerned about water levels. 
 
Border infrastructure 
-------------------- 
¶10. (SBU) A short discussion of truck and road issues ensued, 
with Collenette explaining that Windsor, Ontario is not 
really interested in increasing truck traffic - and no 
interest in expanding current infrastructure. Rather, said 
the Minister, US Customs needs to increase the number of 
inspectors in the booths - at present Collenette said the GOC 
estimate the U.S. booths run at only 55% of capacity. 
Ambassador replied that Customs has, in fact, hired more 
inspectors, but those extra folks are now only working their 
way through the training cycles. Both agreed we need to keep 
our options open regarding use of the Detroit-Windsor 
railroad tunnel and more highways. 
 
¶11. (U) Collenette concluded the luncheon by explaining he 
will be at an "inter-modal" conference in Denver in April 
during which he will make a keynote speech. He is also on 
the board of the International Center at Stanford, and hoped 
to travel to Stanford around the time of the Denver meeting. 
KELLY