Trump’s trade war not the only one hurting Canada

To a person, Canada’s premiers recognize the importance of relatively free trade. They would speak in one voice about the foolishness of Donald Trump’s escalating trade war with American allies and with China. No one wins.

So you would think those same premiers would also recognize the importance of the free flow of goods and services across provincial boundaries. Interprovincial trade, after all, is a huge part of our economy. International trade is approximately equal to 30 per cent of Canada’s Gross National Product. The value of trade between provinces is about 20 per cent of GDP. That’s about $400 billion.

For all of the premiers’ righteous rhetoric about robust trade, they haven’t been good about facilitating it in Canada. It’s easier to slam Trump than to acknowledge the scale of the internal problem. How big is it?

As usual, it depends on which economist you ask.

But credible, middle-of-the-road economic estimates suggest the cost of trade restrictions is in the tens of billions of dollars nationally, and possibly more than $100 billion. A report from Canada’s Senate a few years back stated internal trade barriers may shrink Canada’s economy by between three to seven per cent. That’s a range of $60 billion and $130 billion per year. These are big numbers.

Given that, and given we’re facing the economic impact of Trump’s destructive trade policies, you’d think the premiers would be chomping at the bit to improve trade between provinces. But you’d be wrong.

At their meeting last week, the premiers did address domestic trade barriers. There was an expectation they could at least achieve a modest step forward with personal exemption increases on the amount of wine and beer we can buy in one province and transport to another.

They couldn’t even do that. The best they could deliver was a vague commitment to “significantly increase personal-use exemption limits when crossing provincial/territorial boundaries.” That’s the smallest of baby steps, when what Canada needs is a giant leap.

The aforementioned Senate report called in 2016 for two major changes the premiers could still enact. One, agree to harmonize and recognize all standards, regulations and certifications. A standard in B.C. is the same as a standard in Ontario. Two, establish an infrastructure corridor to house pipelines, power transmission lines, fibre optic highways and railways. Streamline implementation and use of the corridor, as opposed to the current ad hoc approach.

Let’s give the last word to Manitoba Premier Brian Pallister, who said it well when he said: “We are a trading nation and we have to demonstrate that we understand the benefits to the Canadian family of trading more effectively within our own boundaries if we wish to make the case to others that they should pull the wall down between us and them.” Amen.