WASHINGTON—Four days into the U.S. government shutdown, the Blame Canada meme popped up Friday with suggestions Ottawa may be meddling in Washington’s fiscal nightmare to advance its perennial quest for a new oil pipeline.

The inference came in a letter to Prime Minister Stephen Harper from Tom Steyer, the San Francisco hedge fund billionaire and vocal opponent of Trans Canada Corp.’s Keystone XL project.

Specifically, Steyer wants to know more about a possible Canadian role in the placement of approval of the pipeline in a laundry list of Republican demands to end the crisis, which has thrown all but “essential” federal workers out of work — some 800,000 Americans.

Linking a new pro-Keystone lobbying campaign in Washington to Harper’s assertion last week that Canada won’t “take no for an answer,” Steyer asks “whether your office is working hand in hand with TransCanada to try and exploit the current situation in Washington, D.C., at the expense of the American people.”

Harper, travelling in Asia on a round of Pacific Rim diplomacy, offered no response.

But here in D.C., the suggesting was met with eye-rolls. Not only is the Keystone XL approval process not getting any faster, sources in Washington say, the interaction between Canadian and U.S. officials has come to a standstill.

The good news is that on a day-to-day economic basis, four days of shutdown are adding up to a great big nothingburger for Canada. Trade and travel, the issuance of visas and the flow of trucks remains at pre-shutdown levels.

“So far so good,” is how one highly placed Canadian source in Washington described trade flow.

The bad news is that there’s nothing on the American side to suggest that the shutdown, which will eventually become a drag on Canada’s economy, is anywhere near an end.

With both sides dug in and in the absence of significant developments, the BBC filled the gap with humour, listing Canada at the top of “10 Unexpected Consequences of The U.S. Shutdown.”

The shutdown has forced furloughs upon seven of the eight Americans guarding the 8,891-kilometre Canadian border, the BBC reported with tongue in cheek. “That leaves acting commissioner Kyle Hipsley on his own. Speaking from a field office in Montana, he said everything was under control.”

Yet the truth is the borders are under control. Though U.S. Customs and Border Protection officials have furloughed an estimated 12 per cent of their workforce, trade flows are moving at a pre-Christmas peak. A spokesman for the Canadian Trucking Alliance told The Star “we’re in wait-and-see mode, but as of now we haven’t received any problem calls from our 4,500 carriers.”

That’s the upfront wiring of cross-border interaction. The “hidden wiring,” however, is all messed up, according to number of sources in Washington. Canadian Embassy officials, like those of every other diplomatic mission in D.C., now find themselves with lots of time on their hands, with their American counterparts either off the job or scrambling to keep their own departments running in a short-handed crisis.

“It’s the people behind the scenes doing policy work, economic research and publishing statistics who are just gone,” said one diplomatic source. “The ongoing meetings and engagements that matter to Canada in a whole lot of these areas just aren’t happening.

“But the reality is that what slows them down ultimately slows us down. If a Canadian firm is waiting on a new trade permit, for example, it’s just not clear how quickly it is likely to get processed.”

Laura Dawson, of the cross-border trade consultancy Dawson Strategic, said the status quo also shuts down “almost all the important trade initiatives that Canada is involved with in the U.S.”

Cases in point: Try surfing the U.S. websites for The Beyond the Border and Regulatory Co-operation Council efforts launched with fanfare and handshakes between Harper and President Barack Obama. On Friday, the second greeted visitors with a page reading, “Due to a lapse in government funding, the International Trade Administration website you are trying to reach will be unavailable until appropriates are enacted.”

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“Even though the U.S. is a much larger economy, Canada is tethered to it like a man in at a three-legged race,” said Dawson.

“When the big guy goes down, all of our prospects slow or stall and every day they stay shut down, our recover will be that much harder.”

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