Meagre document praised as a coup
It was interesting to see how a meagre 191-word document signed by all premiers on internal free trade was lauded as a major coup for our confederation.
The Canadian Free Trade Agreement was signed recently at the annual premiers’ summit in Whitehorse. It might take months before we know what products are included in the deal, and what is not. For years, restrictions amongst provinces have prevented food products such as dairy, wine and beer from flowing freely through our country.
We can certainly celebrate the goodwill of our provincial leaders, but we should all remain cautiously optimistic.
The intent of the deal signed in Whitehorse is to revitalize the ineffective Agreement on Internal Trade that was originally signed in 1994, at the beginning of the Chrétien era. After defeating the Conservatives who were in power for nine years, the Chrétien government was beginning a new mandate.
There was a sense of rejuvenation within the confederation. The political atmosphere was different at the time, and provincial leaders signed the agreement with confidence. A little more than 22 years later, under a new Liberal government, we are witnessing the second coming of a serious determination to deal with our internal trade quarrels.
In 1994, several events took place soon after the deal was signed that changed the political spectrum. People around the table changed, and the overwhelming pleasant sentiment disappeared.
Quebec elected a separatist government, and transfer payments were reduced to a point that Ottawa abruptly ended its honeymoon-esque period with the provinces.
As the political landscape changed, so did internal economic priorities. Nothing can prevent something like this from happening again. This time around, with Brexit, Trumpism and continuing disturbing terrorist attacks affecting many countries, the world is a much more complicated place. One can easily see how CFTA can be forgotten.
The hard truth is that Canada is simply not a trade-focused nation, particularly in agriculture and food. We trade with the world despite ourselves. With our rigid quota-based schemes, tariffs on imports, provincially based marketing boards and liquor boards, trading food products can be challenging in our country.
Internal trade strains in Canada speak to a significant constitutional paradox. While our confederation is certainly complicated to manage, our constitution is fairly easy to interpret. In fact, our constitution, which was signed more than 149 years ago in Charlottetown, offers provisions for enhanced internal trade. Yet our forefathers never anticipated provinces being in contempt of our own constitution.
In Whitehorse this year, the premiers basically agreed to agree, and nothing more. We might see an agreement in the future or we might not. Exploring options through a consultative process will bring us to where we need to be.
However, we should not be surprised that details coming out of working groups will likely become points of contention.
Keep in mind that consultations related to this trade deal will be added to the 150 consultations on various issues that are already taking place in Ottawa. To say that Ottawa loves to consult these days would be an understatement.
In recent years, most of our traderelated attention was given to major international trade deals. Years of work were dedicated to the signature and potential ratification of such agreements. Yet due to uncontrollable factors, agreements such as the Trans-Pacific Partnership now seem uncertain.
Time can be better spent on interprovincial trade, where the economic terrain is less choppy. More internal trade is desirable for all regions, all provinces, and a renewed economic focus amongst provinces is economically indispensable. A deal can provide a better chance for local knowhow to shine across the country.
In fact, the Canadian trade agreement has the potential to create significant wealth in regions. It could even be more economically influential than our current equalization-payment scheme, which has proven over the years to support fruitless policies.