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During the 1980s, the United States and Canada generally enjoyed very good relations. The early 1990s brought new governments to Ottawa and Washington, and although Canada's Liberal Party emphasized its determination to act independently of the United States when necessary, relations between the two countries continued to be generally cordial. Canada's new Conservative government, under Prime Minister Stephen Harper, is regarded as more philosophically in tune with the Bush Administration than the Liberals were; some observers believe that this compatibility may facilitate bilateral cooperation. The two North American countries continue to cooperate extensively in international security and political issues, both bilaterally and through numerous international organizations. Canada's foreign and defense policies are usually in harmony with those of the United States. Areas of contention are relatively few, but sometimes sharp, as has been the case in policy toward Iraq. Since September 11, the United States and Canada have cooperated extensively on efforts to combat terrorism, particularly in Afghanistan. The United States and Canada maintain the world's largest trading relationship, one that has been strengthened during the past fifteen years by the approval of two multilateral free trade agreements. Although commercial disputes may not be quite as prominent now as they have been in the past, the two countries in recent years have engaged in difficult negotiations over items in several trade sectors, including natural resources, agricultural commodities, and the cultural/entertainment industry. However, these disputes affect but a small percentage of the total goods and services exchanged. Also, the United States and Canada work together closely on environmental matters, including monitoring solid waste transfers, and protecting and maintaining the quality of border waterways. Many Members of Congress monitor U.S.-Canada environmental, trade, and transborder issues that affect their states and districts. In addition, because the countries are similar in many ways, lawmakers in both countries study solutions proposed in the other to such issues as federal fiscal policy and federal-provincial power sharing. This report provides a short overview of Canada's political scene, its economic conditions, and its recent security and foreign policy, focusing particularly on issues that may be relevant to U.S. policymakers. This brief country survey is followed by several summaries of current bilateral issues in the political, trade, and environmental arenas. The report is updated annually.< [ABSTRACT FROM AUTHOR]

The article presents an outlook on the political performance of Canada for 2008 to 2009. It is projected that the Conservative government and Prime Minister Stephen Harper will remain in power until 2009 but series of scandals have impact their public image. The administration of Prime Minister Harper is making efforts to improve Canada's relations with the U.S. government.