Border tensions run high, America’s new Arctic ambassador

Here’s what we’re following in cross-border news this week, including rising tensions around migrants entering the U.S. from Canada, new?developments in critical minerals and?America’s very first Ambassador-at-Large for Arctic Affairs.

Pressure on the border

U.S. Customs and Border Protection says a record number of migrants are crossing into the United States from Canada. American politicians are sounding the alarm, and the pressure on the northern border has the potential of becoming a significant irritant between Ottawa and Washington regardless of who wins the presidential election in November.?

The border agency reports 19,498 “encounters”?with migrants between official posts on the northern border between October 2023 and July 2024. That’s more than twice the number in the same period the previous year.?

Donald Trump has warned of an “invasion” ?across the northern border, and the latest numbers are bound to ramp up concern among American lawmakers who are pushing for greater surveillance of the border with Canada.??

They’ve also sounded warnings about potential terrorists crossing from the north. The arrest of a Pakistani national near the border in Ormstown, Que., on Sept. 4 set off alarm bells; he’s charged with plotting to cross into the U.S. to attack Jewish targets in New York City.?

Most migrants crossing the Canada-U.S. border are now from India , and there’s mounting evidence that an informal economy has sprung up to help Indian nationals enter the United States illegally from the north. Radio-Canada reported that smugglers are using TikTok to market their services to Indian citizens trying to get across the border.??

One of its reporters posed as a potential migrant and held conversations with a smuggler offering a trip of “40 minutes through the jungle”?—?the woods along the border south of Montreal —?for $5,000. Smugglers have posted videos on TikTok promising safe passage into the U.S. from Montreal, Toronto or Surrey, B.C. Some carry testimonials in Punjabi.??

Migrants are advised to report to a U.S. border post once across the frontier and are told they will be released and can make their way further south. The U.S. border agency has denounced the practice, saying “transnational criminal organizations”?are “claiming the borders are open and offer the northern border as a way to enter the U.S.”?

Mike Blanchfield, PPF’s Director, Energy Policy and Global Security, adds this: “One of the great advantages Canada enjoys with the United States is that our shared border poses few, if any, real problems. The U.S. appreciates that because it has enough headaches on its southern border with Mexico. The U.S. generally views its Canadian border as a positive, peaceful and prosperous place, where the legal movement of goods and people flow seamlessly to our shared economic benefit. Joe Biden drove that message home in his address to Canada’s Parliament last year.?

Anything that recasts the American view of the 49th parallel as a serious security problem —?anywhere approaching the hot-button issue that illegal immigration continues to be between Mexico and the U.S. —?will hurt Canada.?

The Canadian government needs to stem the tide of illegal crossings before it becomes a U.S. election campaign issue. A security threat —?real or perceived —?will trigger consequences from a Harris or Trump administration. But only one of those presidents would be inclined to build a new border wall.”

A crucial step on crucial minerals

Saskatchewan has taken a significant step towards countering China’s strategic advantage in mining and processing rare earth minerals. The Saskatchewan Research Council last week opened the first commercial venture in North America that will process rare earths from Australia, Vietnam and Brazil until large-scale mines are open.?

China controls about 60 percent of the world’s rare earth mining and about 90 percent of their processing. The Financial Times reported the opening of the operation in Saskatoon this way: “The SRC Rare Earth Processing Facility marks a small but important step in western countries’?efforts to undermine China’s dominance in the critical minerals industry.”

The new $100-million facility will process enough rare earth inputs for about 500,000 electric vehicles a year, according to Mike Crabtree, its chief executive. It’s expected to be fully operational by next year.?

China last year imposed an export ban on its technologies for processing rare earths, a series of 17 elements that are common but difficult to extract in large quantities at an affordable cost. Building that capacity outside China —?and especially in North America —?is a key part of reducing dependence on Beijing.

Fall Lecture 2024: This year’s much-anticipated PPF Fall Lecture features five incredible speakers on Canada-U.S. relations. Hear from Kelly Craft?and?Gordon Giffin, former U.S. Ambassadors to Canada, Clifford Young, President of IPSOS U.S. Public Affairs, Janice Stein,?Belzberg Professor of Conflict Management and the Founding Director of the Munk School of Global Affairs & Public Policy, and Edward Greenspon,?PPF?President and CEO. Join us in Ottawa on Oct. 24.?

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‘Mattering more’ on critical minerals

PPF’s report on how Canada can ‘matter more’ ?in the world?—?and especially with its key ally, the United States —?says this country should do much more to leverage its reserves of critical minerals.?

Those minerals —?including cobalt, lithium, copper, nickel, graphite and rare earths —?are key to the production of clean energy, electric vehicles and military technology. But at the moment China is the dominant global producer of more than 20 critical minerals.?

Canada, the report argues, is one of the few market-based democracies with abundant deposits of many critical minerals and can play a key role in reducing reliance on China. PPF urges Canada to forge an “Auto Pact of Critical Minerals”?—?a joint U.S.-Canada approach to mining, processing, transporting and using these strategic resources.?

That would involve according each other national treatment on use of critical minerals; levering Canada's position as upcoming chair of the G7 to accelerate a “critical minerals pact”?among friendly nations; defending against China’s efforts to depress prices and slow development; and developing informed consent for mining from Indigenous communities. The whole report can be read here .

The risks of Trump 2.0

A second Trump presidency would be bad news for Canada, especially if November’s U.S. election gives Republicans control of Congress. Oxford Economics calls this the “Full-Blown Trump Presidency Scenario,”?and says it “would result in weaker growth, higher inflation, and tighter monetary policy in Canada and globally.”?

Canada’s GDP would be 0.9 percent lower than current baseline estimates by 2029, due largely to the across-the-board tariffs of at least 10 percent on all imports that Donald Trump promises to impose. “The Canadian economy would be hard hit in a full-blown Trump presidency,”?it concludes.?

The report is by Michael Davenport, an economist with Oxford Economics, and Tony Stillo, its director of Canada economics. They paint a troubling picture for both Canada and the wider world if Trump makes it back to the White House. The U.S. economy would strengthen initially if Republicans went ahead with promised tax cuts and new spending, they write, but inflation would quickly increase and growth would slow as Washington re-ignited a trade war with China.?

Canada would be particularly hard-hit, given its close ties with the U.S. Inflation would increase and the loonie would weaken, prompting the Bank of Canada to raise interest rates by 125 basis points by early 2026. Consumer spending would weaken and business investment would fall. Heavy manufacturing —?including refined petroleum products, autos and basic metals —?would be the sectors hardest hit.?

A Kamala Harris presidency, by contrast, would be basically business-as-usual for Canada. If Harris wins and the Democrats control Congress, Oxford Economics predicts, there would be small, temporary boosts to GDP and inflation on both sides of the border which “would largely dissipate by 2029.”?A Harris presidency, they say, “would likely mean a continuation of the current status quo for Canadian policymakers,”?although protectionist trends in the U.S. would probably continue.?

This week on WONK:?Raven Lacerte on leading a national movement to end violence

A friend in a high place

It makes a big difference when the president of the United States is willing to go to bat for you. The “two Michaels”?are marking the third anniversary this week of their release from prison in China, and it turns out the key factor in securing their freedom was a personal intervention by President Joe Biden.?

PPF’s Mike Blanchfield and Fen Osler Hampson of Carleton University write in The Hill Times that while many people worked tirelessly to free Michael Kovrig and Michael Spavor, it was Biden who turned the tide. He held a 90-minute phone call on Sept. 9, 2021, with Chinese President Xi Jinping and “went to bat for the two Michaels.”?

On Sept. 24 of that year, the U.S. justice department announced it had reached a deal to resolve its case against Huawei executive Meng Wanzhou, and the next day the two Michaels flew back to Canada after two and a half years in captivity. “It was only after Biden put his shoulder to the boulder that Kovrig and Spavor were able to see the light of day again as free men,”?write Blanchfield and Hampson.?

They are co-authors of The Two Michaels: Innocent Canadian Captives and High Stakes Espionage in the US-China Cyber War. ?

A line in the sea

Canada and the United States are going to have another go at resolving a boundary dispute that goes back all the way to 1825.?

The two countries announced they’ve created a joint task force to negotiate their longstanding dispute over a section of the mostly frozen Beaufort Sea, north of Alaska, Yukon and the Northwest Territories. They have overlapping claims over a narrow, wedge-shaped slice of the seabed that may be rich in oil and gas and is of growing strategic importance as the Arctic warms.?

The argument over the boundary stems from conflicting interpretations of the 1825 Treaty of St. Petersburg between the Russian Empire and the United Kingdom. After Russia sold Alaska to the United States in 1867, the U.S. took over the Russian position and Canada is the successor state in the area for Britain.?

The dispute itself is almost as arcane. Canada argues the boundary should continue into the sea along the 141st meridian line of longitude while the U.S. takes the position that the border should be perpendicular to the coast. The result is an area where both countries claim jurisdiction — and potentially the riches beneath the sea. The task force has the thorny task of trying to settle the matter once and for all.?

Cold diplomacy

The above dispute?could be a job for America’s very first Ambassador-at-Large for Arctic Affairs . Dr. Mike Sfraga?was recently confirmed to the position. Sfraga was the founder of the Wilson Center’s Polar Institute.?

“He has been very clear about making sure that U.S. interests in the Arctic are protected and defended — against Russia, against China and anybody else that would encroach on our sovereignty,”?said Lisa Murkowski, a Republican senator for Alaska. ?

The little-covered announcement could have big implications. The job, according to the U.S. Department of State, is to lead and coordinate “the advancement of U.S. interests in the Arctic related to safety and security, sustainable economic growth, and strengthening cooperation among Arctic States to perpetuate and defend the rules-based order in the region.”?

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