Canada: Demolishing internal trade barriers

Canada: Demolishing internal trade barriers

Canada urgently needs an internal–interprovincial–free trade agreement.

It’s been estimated that knocking down barriers to interprovincial trade could boost Canada’s economy by up to $130 billion annually, increasing gross domestic product by up to 4%.

Given that number, you would think after 59 years of annual summer meetings of Canada’s premiers, which are now also attended by the nation’s three territorial leaders, there would be more progress on this issue than there has been.

Prime ministers and premiers have talked about eliminating interprovincial trade barriers for decades but as often happens, domestically as well as internationally, everyone’s a free trader until it comes time to open up their own markets.

Conservative leader Andrew Scheer recently stated that if elected PM on Oct. 21, he’ll convene a First Ministers meeting within 100 days to propose a new interprovincial FTA. Yet the reality is that it would be a good idea no matter who wins the general election.


Barriers to growth

Canadian businesses are weighed down by often absurd trade barriers between provinces that impede economic growth.

For example, interprovincial barriers to alcohol sales have long been a standing joke in Canada and are only now, slowly, beginning to ease.

As Ontario Premier Doug Ford said in a speech before heading to the annual premiers’ meeting–also known as The Council of the Federation–this week in Saskatoon, if you want to build a power plant in Quebec, you can’t hire an Ontario company to help.

If an Ontario trucking firm wants to ship across Canada, it has to buy different sets of tires to meet the varying weight requirements in other provinces, no matter how small.

In 2016, the Canadian Senate, in a report titled Tear Down These Walls: Dismantling Canada’s Internal Trade Barriers called the maze of regulatory and legislative restrictions on trade between provinces “mind-boggling.”

Senators cited trucks that can only be driven at night in one province and during the day in another, along with absurd interprovincial restrictions on everything from maple syrup and cheese to the size of beer bottles, dairy creamers, and milk containers.

Small wonder Canadians can’t get their land-locked oil to global markets because of interprovincial squabbling, which alone costs the country billions of dollars annually.

In short, regardless of current international issues and whatever the outcome of the election this fall, Canada could provide a welcome boost to its economy by first acting domestically.


About the Author:

Olivia Toledo
error: Content is protected !!