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U.S. stability key to Canada, McKenna says

Frank McKenna says Republican presidential candidate Mitt Romney ‘knows Canada well and would be very favourably disposed toward our country.’

Chris Young/Chris Young for The Globe and Ma

Canada has never been mentioned more but mattered less.

That is the gist of a prominent critique of Canada-U.S. relations under President Barack Obama. His move to stall the Keystone XL pipeline means Canada's profile has rarely been higher among the general public south of the border. But Keystone's arrested development, the critics say, is emblematic of Mr. Obama's "pattern of neglect" toward America's northern neighbour.

Frank McKenna thinks otherwise. During his short tenure as Canada's ambassador to the United States during George W. Bush's second term in the White House, Mr. McKenna witnessed some of the testiest Canada-U.S. dealings in recent memory. He even sparked a minor diplomatic incident by calling the U.S. government "dysfunctional."

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The current bilateral relationship, Mr. McKenna offers, is one of relative bliss.

"This President has been there [for Canada] when needed," Mr. McKenna said in an interview with The Globe and Mail, during which he added that Canada owes its hard-won participation in ongoing Pacific Rim trade talks to Mr. Obama. "It was the direct intervention of the President of the United States that got the foot in the door for us."

Lest that be construed as an endorsement of the incumbent in the Nov. 6 presidential election, Mr. McKenna, now the Toronto-based deputy chair of TD Bank Group, is quick to point out Mitt Romney's "very affectionate view" of Canada. The Republican nominee grew up in Michigan, spent his summers in Ontario and served as governor of Massachusetts – not far from New Brunswick, where Mr. McKenna was premier for a decade until 1997.

Indeed, the Republican candidate rarely misses an opportunity to mention he would approve "that pipeline from Canada" on Day 1 of a Romney administration. And he has made "North American energy independence" one pillar of his five-point plan to get the U.S. economy on track. The plan involves increasing U.S. imports of Canadian oil to wean the United States off Middle Eastern and Venezuelan crude by 2020.

Mr. Romney's late father, George Romney, was governor of Michigan when the Canada-U.S. Auto Pact was signed in 1965. And Mitt Romney's career running private equity firm Bain Capital has left him with an intimate knowledge of North American business.

"He knows Canada well and would be very favourably disposed toward our country," Mr. McKenna said of Mr. Romney. "But it's much more complicated than that. The president can love you to death, but that doesn't mean you don't have constant harassment from Congress. … The tone at the top helps, but it's not conclusive."

Mr. Obama's enormous popularity in Canada spares Stephen Harper the opprobrium prime ministers have typically faced whenever they cozy up to U.S. presidents, even when it is in our interest to do so. In a BBC World poll this week, two-thirds of Canadians picked Mr. Obama as their "preferred candidate" in the election; fewer than 10 per cent chose Mr. Romney.

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"Bush could be quite pro-Canada. But he was not liked in Canada very much, so it gave governments in Canada limited ability to deal with him," Mr. McKenna noted. "Obama is more liked in Canada, so that gives [Mr. Harper] more latitude."

There is some evidence of that. The Beyond the Border initiative, which aims to relieve trade irritants at the border through a shared approach to security, might have provoked more opposition in Canada had Mr. Obama not been in the White House.

Still, other veterans of the Canada-U.S. file do not share Mr. McKenna's halcyon view of the current bilateral relationship. Former ambassador Derek Burney, who served at the embassy in Washington during George H.W. Bush's presidency, has accused the Obama administration of a "pattern of neglect" toward Canada and blamed the Keystone delay for driving Canada-U.S. relations "to their lowest point in decades."

Mr. McKenna, who recently declined to run for the federal Liberal leadership, counters that the Keystone deferral was driven by local politics in Nebraska, where the Republican Governor blocked the approval process. Meanwhile, he adds, internal problems sparked by the 2008 financial meltdown have monopolized the attention of the Obama administration, leaving some minor cross-border files unattended.

In that respect, the best U.S. election result for Canada might be a decisive one.

"Canadians should be focused not on whether it is a Republican or Democratic label, but on which party can provide the most stable government that can create the conditions for economic growth," Mr. McKenna said. "The ideal situation would be to have a sweep for either the Republicans or Democrats to overcome some of the inherent gridlock and get things done."

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Regardless of the outcome on Nov. 6, Mr. McKenna adds, the fate of the U.S. economy – and by extension Canada's – depends on whether Congress is up to the task of averting the so-called fiscal cliff facing the country on Dec. 31. That is when punishing automatic tax increases and spending cuts are set to take effect unless a deal is reached on a longer-term plan to put the U.S. budget on a sustainable track.

"If they can do that with skill and compromise … you're going to see the excitement of a lot of animal spirits in the United States," said the deputy chair of Canada's No. 2 bank, whose U.S. retail banking operations make it the seventh-biggest player south of the border. "There is a wall of money sitting on the sidelines that would enter the economy if there was confidence that policy makers were making the necessary decisions."

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