TREASURY SECRETARY SNOW VISIT TO CANADA

C O N F I D E N T I A L SECTION 01 OF 03 OTTAWA 002109

SIPDIS

DEPARTMENT FOR EB/IFD, EB/OMA, WHA/EPSC, AF, AND WHA/CAN
STATE PASS FEDERAL RESERVE BANK FOR CHUGH
STATE PASS SEC FOR TAFARA
TREASURY FOR DAVID NAGOSKI

E.O. 12958: DECL: 07/07/2015
TAGS: EFIN ENRG EAID ETRD KTFN ECON CA JA NI
SUBJECT: TREASURY SECRETARY SNOW VISIT TO CANADA
DEMONSTRATES OUR STRONG POSITIVE RELATIONS WITH CANADA

REF: A. OTTAWA 2108


B. OTTAWA 3434 (SINGLE REGULATOR)

C. (OTTAWA 3433 (BANK MERGERS)

D. OTTAWA 1968 (FATF)

Classified By: Classified by Ambassador Wilkins. Reason: 1.4(b) and (
d).

1.1. (SBU) Treasury Secretary John Snow met with Canadian
Minister of Finance Ralph Goodale in Calgary on July 9 to
discuss a range of bilateral and international economic
issues. Ref A provides more details of the July 7-9 visit
and reports on the points that were made during press
conferences July 8 and July 9. This message reports points
of interest to other agencies that were not made public. The
list of participants is at the end.

IFI Strategic Review and G-8 follow up
--------------

2. (C) Secretary Snow opened the meeting by asking Minister
Goodale about GOC views on how to advance strategic reform at
the IMF and World Bank. The U.S. and Canada share similar
objectives and should work together to advance the process,
which has been languishing for 18 months. It was agreed that
it would make sense to work closely with Japan.


3. (SBU) They also touched on follow-up to the Gleaneagles
G-8 summit and future meetings of the G-7 finance ministers
and referred to their discussions the previous day on
bilateral trade disputes and the financial sector elements of
the Security and Prosperity Partnership (SPP).

Tax Treaty
--------------


4. (SBU) In his opening statement to the press on July 8
and 9, Minister Goodale announced that Treasury and Finance
are committed to finalizing revision of the bilateral tax
treaty by the end of the year, probably by fall. Note: The
tax treaty has not, to our knowledge, been reported by any
media but the embassy did notify the American Chamber of
Commerce in Toronto and individuals who have approached us
about the treaty of the announcement. End note. During the
July 9 bilateral meeting, Minister Goodale explained that the
GOC has a domestic technical issues with some non-arms-length
transactions, but he does not expect that to derail a
possible signing this fall.

Corporate Governance
--------------


5. (SBU) Secretary Snow asked if the GOC has had complaints
about the extra-territorial elements of the Sarbanes-Oxley
Act (SOX). The GOC pointed out that large Canadian firms
that list on U.S. exchanges are the equivalent of small and
medium firms in the U.S. context and the SOX requirements can
add significant cost. Secretary Snow described steps the SEC
is taking to review the differential burden on SMEs and
invited the GOC to participate in the SEC comment process,
which Goodale said they would do.

Commission for Africa and development assistance
-------------- --------------


6. (SBU) In response to a question from Secretary Snow,
Minister Goodale said the Commission for Africa had not
looked beyond Gleneagles, as future activity will be driven
by decisions that were made at the Summit. (Note: Minister
Goodale is a member of the Commission. End note.)


7. (SBU) ADM Paul Boothe noted that the Millennium
Development Goals define widely accepted development
outcomes, and it might be helpful if we frame discussions on
development assistance levels in terms of how our efforts are
advancing the MDG. The GOC also favors broadening the
definition of assistance, noting the Canada and the US spend
significant amounts on activities such as peacekeeping that
are critical to development but are not counted as
development assistance.

Nigeria/GOPAC
--------------


8. (C) The Canadian side asked about ways in which we could
support Nigerian reformers and show that there are benefits
to the risks they are taking to fight corruption and improve
corporate governance. The Canadian side is looking a
barriers that make it more difficult for their private sector
firms to invest in Nigeria. They described plans by GOPAC
(the Group of Parliamentarians Against Corruption) to find a
credible sponsor in Africa that would let them work more
closely with and show more support for African counterparts,
especially in Nigeria. They agreed that it would be helpful
for US and Canadian legislators to cooperate in this effort.

Summit of the Americas draft text
--------------

9. (C) Secretary Snow asked Minister Goodale to involve
Finance Canada officials more closely in the Summit of the
Americas preparation, noting that the draft text seems to
have lost a focus on good economic policy and be drifting
towards unacceptable language on income inequality. Finance
Canada will follow up with Foreign Affairs Canada.

Single National Securities Regulator and Bank Mergers
-------------- --------------


10. (SBU) Minister Goodale and his top officials have
brought new commitment to the quest for a single national
securities regulator in Canada (Ref B). (Currently there are
13 -- one in each province and territory -- and Canada has no
single voice internationally.) He spoke strongly about the
need for a single regulator and mused about the possiblity of
recruiting provinces other than Ontario to the cause.


11. (C) Goodale did not raise bank mergers, but his chief of
staff said later ("for this room only") that we could expect
action, although not necessarily approval, by the end of the
year. Canada's six national banks have been anticipating
authority to merge for years but have been cautioned that
they would not receive approval from the Minister of Finance
(Ref C). Goodale was expected to take quick action when he
took office , but a firm decision has been delayed by the
political brinksmanship of minority government.
FATF
--------------


12. (SBU) In closing, Minister Goodale asked if there are
activities the U.S. would like the Financial Action Task
Force (FATF) to be more active in promoting. Snow responded
that we would like further multilateralization and stronger
designation regimes. Canada assumes the chairmanship of FATF
next summer (Ref D).

Comment
--------------


13. (C) This meeting was the first of what is intended to be
an annual bilateral consultation and both Secretary Snow and
Minister Goodale repeatedly described the strong and positive
relationship between the U.S. and Canada. There was great
appreciation for the fact that Secretary Snow is the first
U.S. cabinet-level official to visit the oilsands. The
success of this visit, coinciding with the positive press
surrounding the Ambassador's arrival in Canada, has changed
the tone of the relationship and helped kill the pervasive
view, fueled by the media, that there is a chill over the
bilateral relationship. Our two financial systems are deeply
integrated and almost completely conflict free and it is good
to showcase the positive aspects of the U.S-Canada
relationship and to show that we share many of the same goals
bilaterally and internationally.

Participants
--------------

US: Secretary Snow
Ambassador David Wilkins
Randy Quarles, Acting Under Secretary for International
Affairs
Chris Smith, Chief of Staff
Lucy Abbott, Notetaker

GOC: Minister Goodale,
Paul Boothe, Associate Deputy Minister
Patrick Tobin, Chief of Staff
Ron McMorran, Financial Attache, Washington
Sheila MacDonald, Chief, International Policy Analysis
Visit Canada's Classified Web Site at
http://www.state.sgov.gov/p/wha/ottawa

DICKSON