On Wednesday, Prime Minister Justin Trudeau called for a Canada-U.S. economic summit in Toronto to discuss diversifying where we buy and sell goods and services.
U.S. President Donald Trump’s on-again, off-again threat to impose tariffs on Canadian goods has boosted the old idea of breaking down interprovincial trade barriers in this country to drive economic growth.
On Wednesday, Prime Minister Justin Trudeau called for a Canada-U.S. economic summit in Toronto to discuss diversifying where we buy and sell goods and services. The one-day meeting on Friday is “bringing together partners across business, civil society and organized labour” to discuss making it easier to trade within Canada’s borders.
Here’s what to know about trade barriers between the provinces:
Why do they exist?
Every province has rules that limit what services, labour and goods can cross into its jurisdiction from another province. Some are clear, such as rules forbidding the sale of alcohol from another province to ensure a monopoly in their market.
Other barriers come in the form of onerous paperwork or requirements to meet industry rules in another province. These can curb the movement of labour between provinces, from drivers to nurses, and prevent the building of national projects or trade channels. They include needing to register with multiple workers’ compensation boards or complying with a separate set of occupational health and safety standards, plus the cost and time associated with applying for varying licences.
What has Premier Eby said?
David Eby told Postmedia News in late December that there was a working group looking at a pilot project to recognize all these standards and rules across all provinces. It would be focused on finding a way to remove some of the barriers to trade between the provinces in sectors, such as trucking.
He has since spoken again in the context of the Trump tariffs about “getting rid of those barriers that stop Canadians buying goods from each other.”
In a 10-point tariff response plan, B.C. Conservative Leader John Rustad listed immediately negotiating a Canada Wide Free Trade Agreement with an “open flow of all goods and commodities, including energy, to (help) offset our dependency on the U.S.A.”
It’s not a new concept and a Canadian Free Trade Agreement was signed in 2017, which replaced an Agreement on Internal Trade that had existed for over two decades, but has hundreds of exceptions.
Are there any examples of reducing barriers?
In early January, B.C. and Alberta launched a direct-to-consumer program that allows wineries in B.C. to sell wine in Alberta. They report sales and make payments to the Alberta Gaming, Liquor and Cannabis agency. It’s a one-year program that will be evaluated for its effectiveness. Buyers in Alberta can order wine from more than 300 wineries and the Alberta government gets its share of applicable taxes.
“By working collaboratively with Alberta, we’re supporting economic growth and strengthening ties between our provinces,” said Eby at the time in a news release.
Dan Paszkowski, CEO of Wine Growers Canada, said Tuesday that he had no new information on a national initiative for interprovincial trade barriers to be lowered. He added that while he has heard that removing more barriers to alcohol sales was supposed to be discussed at a previous meeting, he hasn’t yet heard any further details.
He thought the best approach could be to expand a reciprocal deal like the one between B.C. and Alberta, so that it includes other key provinces, such as Ontario and Nova Scotia, since working toward a full national deal has proven challenging.
What is the cost of interprovincial barriers?
Jasroop Gosal, policy and research manager at the Surrey Board of Trade, said Surrey is also focused on restrictions on agricultural products between provinces. In particular, there are regulations that could be “harmonized across provinces” for dairy, meat, fruits and vegetables, and also cannabis, where rules for collecting, retailing and processing products can vary a lot.
“Bringing down these barriers is one ingredient to a recipe for reducing reliance on a single, large trading partner,” said Gosal.
Interprovincial trade barriers add up to 14 per cent of the cost of goods, meaning they cost the Canadian economy between $50 billion and $130 billion a year, said Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade, who is also sitting on the province’s trade and economic task force to bring together business, labour and Indigenous leadership in response to Trump’s tariffs.
“Just for B.C. alone, if we could remove the internal trade barriers, we would see our GDP grow by $8 billion, so that’s important for businesses, families, individuals, but also adds revenue for governments for really important social programs, whether we’re talking about health or education. So, it isn’t a small topic, but a complex topic.”
Where are some obvious steps to take?
The provinces have good intentions in protecting what each considers high standards or certifications or regulations, said Anderson.
“But now is the time where we should be coming together as a country and looking at the greater good,” she said.
There has to be some political will for mutual recognition, which is a way to see that if one standard is good enough in one province, it’s likely to be good enough for most or all provinces, said Anderson.
Anita Anand, federal cabinet minister and minister of transport and internal trade, said Wednesday that based on an emergency meeting last week between Trudeau and the premiers, she was optimistic that many existing barriers could be removed.
With files from The Canadian Press
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