‘Critical to economic growth’: Canadian trade boosts Western New York

The finished sugar products are then loaded onto bulk trucks or railcars, for delivery and sale to food companies and other customers in both countries. But the molasses that is produced as a byproduct in Canada is shipped to Lackawanna for further sugar extraction to make more products.

It’s all an example of the extensive trade that takes place between the Buffalo Niagara region and Canada, part of an economic relationship that is vital to both partners.

The two refineries benefit from their easy access to the Great Lakes, through Lakes Erie and Ontario, and to their markets in the northeastern United States and Ontario.

But they also benefit from their proximity to each other – just 68 miles apart – and to the international border. That’s why Sucro is expanding operations at both sites.

“Cross-border cooperation between the U.S. and Canada is critical to economic growth,” said Sucro CEO Jonathan Taylor. “The strength of this trade relationship is what attracted us to the Lackawanna location in the first place.” 

Each shipment that crosses the Niagara River is part of a constant flow of commercial truck and train traffic between the United States and Canada that represents just a piece of one of the biggest and steadiest trading relationships around the globe. 

“It’s critical to Western New York’s economy,” said state Sen. George Borrello, R-Sunset Bay, himself a small-business owner and former Chautauqua County executive. “The value of our dollars go up and down, but at the end of the day, they are our greatest trading partner.”

From steel to cars, from electric vehicle production and sugar refining, to food and clothes, an array of products and services cross the U.S.-Canada border every day in a constant stream of activity from manufacturer to customer, from wholesaler to distributor, and even from one part of the supply chain to the next.

“It’s a really important relationship,” said Mary Ng, Canada’s minister of export promotion, international trade, and economic development, who oversees and encourages the cross-border commerce to support Canadian companies and workers. “It’s quite diversified.”

It’s also the largest trade relationship for both countries, with $2.5 billion in goods and services crossing the border each day last year, or more than $900 billion per year in U.S. dollars. 

“There’s no better, closer trade partner than Canada,” said Mo Sumbundu, international trade manager for Empire State Development Corp.’s Global NY program.

It’s even more significant in a border community like Buffalo and Western New York, Ng added, noting that Erie County alone sells $2 billion in goods and services to Canada each year, with $28 billion across New York state. Nearly 14,000 jobs in Erie County alone depend on that trade, she said.

“Canada is the state of New York’s biggest customer,” Ng said. “We buy more from the state of New York than China, Japan and France combined. That’s how big and how important the relationship is.”

But it’s not just the goods and commodities. There’s also trade in business services and financial services, not to mention consumers shopping back and forth. Just mention that you’re from Buffalo while traveling in southern Ontario, and someone will invariably talk about their last trip to Trader Joe’s, Wegmans or Target – or their eagerness for Costco to open in Amherst.

“I remember a time when I used to come over, and it was the time when you didn’t need your passport. Just a driver’s license,” Ng said. “That familiarity of Torontonians and Southern Ontario to Western New York is really just exactly that. We have a deep friendship.”

And, of course, there’s the recreational travel for concerts, shows or sporting events, and the consumer spending that inevitably results. Ng recalls with fondness coming to Shea’s Performing Arts Center, including for concerts.

“So much of our culture is intertwined between Canada and New York, everything from hockey to music and everything else. So it’s important that we understand the value of that,” Borrello said.

Ng highlighted the example of Sucro, a 10-year-old company that opened its refinery in Lackawanna a year ago, a few years after opening its first one in Hamilton.

There’s also Viridi Parente, a renewable energy company that makes lithium-ion-based energy storage systems, at a former General Motors Co. plant on East Delavan Avenue. Besides selling its products into Canada, Ng said the company also represents “a clean technology, clean-energy company that is providing the kind of solution that we’re all working at.”

“The proximity between Buffalo and Southern Ontario is really important,” Ng said, citing companies that start producing in one country, finish in the other, and sell in both. “We build together, we innovate together, and then we sell beyond. Canada very much sees this relationship as a two-way relationship.”

It’s so critical that, while the Covid-19 pandemic created tremendous disruptions in consumer and personal traffic across the international bridges, Ng said it had little impact on trade between the two countries. Rather, the respective governments and border agents worked to ensure that commerce continued mostly unimpeded.

“During a time when the world shut down and we had to do extraordinary things to protect our people on both sides of the border, the Canada-US supply chain, which we rely on, never missed a beat. The cargo flowed, and we were better for it,” she said.

And it’s been increasing ever since, with the restoration of personal travel and consumers. Citing data from the Canada Border Services Agency, Ng said the volume of crossings is “definitely back.”

U.S. businesses that met with Ng earlier this summer also stressed the importance of that flow, both for physical goods but also for the people, and the need to streamline the crossings. That’s true not only for tourists and consumers, but for workers business owners and executives, they told her.

Borrello also said more needs to be done to strengthen that even further, such as opening up more of Canada’s markets to New York farmers.

But the relationship also faced its challenges and threats, particularly from the political realm. Under threats from former President Donald Trump, the former North American Free Trade Agreement from 1991 gave way in 2020 to the renegotiated U.S.-Mexico-Canada Agreement – known in Canada, of course, as the Canada-United States-Mexico Agreement.

The updated free-trade agreement was designed to create a better balance of reciprocal trade among the three countries, while leveling the playing field for U.S. workers, helping agriculture, and protecting intellectual property. It also included provisions for small and mid-sized businesses, to make it easier for them to engage in trade.

But there’s also a history of imposing import tariffs, or import taxes, including on steel, aluminum and lumber. In August, the Commerce Department raised tariffs on Canadian softwood lumber from 8.05% to 14.54%. And the upcoming U.S. presidential election raises the potential that a new administration could re-examine trade issues, although Ng dismissed the likelihood.

“Tariffs would be a concern to Canada, but I also think they would be equally concerning to the American businesses as well,” she said. “It just adds more cost, not just to the Canadians but to the Americans.”