Kenney takes on trade
Vows to scrap barriers
ottawa • Alberta Premier Jason Kenney is promising to scrap over half of the province’s regulatory barriers to interprovincial trade, part of what he calls a wider effort among premiers to eliminate roadblocks that have snarled the movement of goods in Canada for years.
Kenney said on Wednesday he would immediately remove 13 of 27 so-called “exceptions” under the Canadian Free trade agreement, and launch a review of the remaining 14, as a way to cut down on trade barriers between provinces. Exceptions are essentially regulatory carveouts that allow provinces to protect certain goods and services, particularly procurement contracts for infrastructure projects or government grants, among other things.
his promise to cut the regulations comes amid a gathering of all 13 provincial and territorial premiers this week in saskatoon, where some of the discussion has been focused on improving interprovincial trade.
“there has been some progress in recent years on greater free trade within Canada, but our government is ambitious to put that on hyper drive,” Kenney said in an interview with the national Post Wednesday. “I concluded that the best way to do that would be to lead by example.”
the move could help nudge provincial leaders toward improving the flow of goods, materials and procurement contracts between provinces — an issue that has been a sticking point among premiers for decades. Provinces have repeatedly announced lofty plans to improve trade flows only to struggle to nail down the details of those plans.
such efforts could provide a sizable economic boost.
In May, the International monetary Fund estimated that eliminating trade barriers in Canada could raise GDP by four per cent, well over any economic gains attributed to a renegotiated free trade agreement between Canada, the u.s. and mexico. statistics Canada has said provincial trade restrictions across the country amount to a 6.7 per cent tariff on the movement of goods.
Kenney said other leaders, including Manitoba Premier Brian Pallister and Nova Scotia Premier Stephen Mcneil, have also taken steps in recent years to eliminate trade exceptions. he acknowledged that untangling the complicated thicket of protectionist regulations in each of the provinces and territories would require a monumental effort.
“this stuff is not simple,” he said. “It took the European union decades to get to its current level of regulatory and market harmonization. a lot of this is a slow, technical grind.”
restrictions to trade can include anything from limits on which companies can bid on certain contracts to tax incentives favouring local firms. the lack of regulatory consistency between provinces — like wildly divergent rules around standards for home builders, for example — has also impeded the flow of new technologies across borders. Provinces have likewise fought over trade restrictions on beer, cheese and other food products.
nine of the 13 exceptions Kenney plans to cut in alberta were imposed by former premier rachel notley, according to a list of exceptions shared with the national Post. Some of the 13 cuts include procurement protections over the alberta utilities Commission, the provincial power regulator.
Kenney’s plan also involves inviting other provinces and territories to join the New West Partnership, signed in 2010, which currently includes B.C., alberta, saskatchewan and manitoba. Kenney likened the partnership to the “Cfta on steroids” for its openness to freer trade.
Kenney is part of a conservative bloc of premiers including Pallister, Saskatchewan Premier Scott Moe, and Ontario Premier Doug Ford.
“We have a very strong group of provincial governments right now who get it,” Kenney said, talking about free trade ambitions. “I’m not hearing much resistance.”
Except in the province next door. alberta has been locked in a standoff with B.C. Premier John Horgan over the trans mountain pipeline. alberta has threatened to choke off supplies of petroleum products to B.C. after it launched a legal challenge against the project.
Canadian provinces have a long history of trying and failing to improve trade ties between neighbours. In 1995 premiers signed the Agreement on Internal trade, which sought to loosen regulations and laws that had hampered trade between
It took the eu decades to get to Its Current level of ... harmonization.
provinces. years later, in 2017, provincial leaders agreed to the Cfta, which outlined similar ambitions.
But those efforts have largely failed to bring about meaningful alterations to how goods and materials flow from one province to another, and have even reinforced some barriers.
“the nation’s 25-year trial with domestic trade agreements has taught us that mere political agreements in the spirit of co-operative federalism, while a noble effort, simply do not work,” ryan manucha wrote in a recent essay for the macdonald-laurier Institute.
While Canada’s Constitution protects against explicit tariffs between provinces, manucha said, it has not been modernized to account for the “far more insidious and discrete” patchwork of regulations and laws that effectively protect domestic industries. Critically, he said, Canada lacks a dispute mechanism that adequately holds provinces to account for trade protectionism.
In an open letter to premiers ahead of the meeting, Canadian Chamber of Commerce CEO Perrin Beatty urged leaders to make meaningful progress toward improving trade.