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For Canada and the United States, this is the watershed year.

On the surface, this week's Three Amigos summit produced nothing but boilerplate. Below the surface, relations are tense. Every major file is on the cusp of decision. If those decisions go Canada's way, then Barack Obama and Stephen Harper will be able to take credit for the most productive relationship between a president and a prime minister since the days of Ronald Reagan and Brian Mulroney.

If things go badly, relations will freeze so deeply that it will take a new president and/or a new prime minister to thaw them.

Obviously, Keystone XL is key. In the years leading up to this year's presidential decision on whether to permit the pipeline from Alberta to the Gulf, the Americans expected Canada to be much more accommodating. They wanted to see made-in-Canada initiatives to reduce carbon emissions from the oil sands and elsewhere, which would have provided the President with cover for approving the pipeline despite intense opposition from environmentalists.

According to those close to the situation, the Americans were surprised and annoyed when, instead of offering concessions, Mr. Harper declared that approving the pipeline was a "no brainer" and that, on Keystone, "you don't take no for an answer" – all of it accompanied by threats that Canada would sell its oil to Asia if the Americans didn't want it. None of this went down well in the West Wing.

Nonetheless, every report that has landed on the President's desk recommends approving Keystone. If Mr. Obama finally gives the go-ahead, then what will be remembered is the approval, not the years of aggravation leading up to it.

The other crucial issue is the Trans Pacific Partnership. Trade ministers are meeting in Singapore this weekend in an effort to nail down a final agreement among the 12 Pacific Rim nations involved. Mr. Harper fumed when the Americans imposed onerous conditions before allowing Canada to join the talks. Those who know say that bad blood over the TPP accession talks seriously strained relations between the Harper government and the Obama administration.

But again, results are all that matter. If TPP gets signed and ratified, the Conservatives will be able to trumpet Canada's involvement in a landmark agreement that will, at a stroke, put this country firmly inside the Asia-Pacific trading sphere.

Finally, there's the border. Progress on a new bridge to link Windsor and Detroit, North America's busiest crossing, continues its two-steps-forward-one-and-three-quarter's-step-back crab walk. At the crossing near Niagara Falls, trucks crossing the Peace Bridge will be pre-cleared on the Canadian side of the border in a pilot project starting next week that aims to reduce congestion and fumes from idling trucks. So the Beyond the Border accord is finally starting to show results.

Put it all together and what do you get? Approval for a pipeline that will allow continued expansion of the Alberta oil sands. A landmark trade agreement that updates the North American Free Trade Agreement while also re-orienting Canadian trade toward the Pacific. And major new infrastructure projects to ease cross-border traffic. Tensions? What tensions?

Or, President Obama vetoes Keystone. The Trans Pacific Partnership talks fall apart. Legal challenges and opposition from Homeland Security scuttle border improvements.

And Canada-U.S. relations enter a deep freeze.

In the good-news scenario, Barack Obama will be able to devote several paragraphs in his memoirs to how he improved relations with Canada from the bad old days when George Bush was president, Jean Chretien refused to help in Iraq, and Paul Martin berated the United States for neglecting climate change as badly as Canada had neglected it. Stephen Harper will campaign in the next election on his proven ability to protect Canadian jobs and grow the Canadian economy by getting pipelines approved and by negotiating Atlantic and Pacific trade agreements.

In the bad news scenario, both countries hang up the phone and wait for the next president and maybe the next prime minister to hit reset.

Let's hope the good news scenario prevails. It's never a happy day for Canada when things go badly with the United States.

John Ibbitson is a CIGI senior fellow, an award-winning writer and leading political journalist in Canada. Currently on a one-year leave from The Globe and Mail, John is researching, writing and speaking on Canadian foreign policy at CIGI while he works on a new book.

Along with other CIGI experts, Mr. Ibbitson will be contributing at, where this post was originally published.

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