NEW PUSH TO CUT INTERNAL BARRIERS
Ottawa, provinces to announce free-trade commitment
• The federal government and the provinces will announce Tuesday a commitment to create a Canadian free-trade zone by removing many of the internal barriers to transporting goods and services between provinces.
James Moore, the industry minister, will join provincial and territorial economic development ministers in Toronto to give a progress report on the move toward a common market within Canada. It will be the first meeting in four years of federal, provincial and territorial ministers responsible for trade.
At a meeting last year in Charlottetown, P.E.I., the premiers stated their intention to renew the 20-year-old Agreement on Internal Trade (AIT), aimed at lowering interprovincial barriers, but the four-member working group did not subsequently meet face to face. Provincial officials in Ontario said the “historic” meeting Tuesday would provide some muchneeded momentum.
Ottawa and the provinces agree that ambitious new international trade agreements signed by the federal government have overtaken the existing AIT and businesses complain that it is now often easier to export to the United States and Europe than it is to ship to other Canadian provinces.
Perrin Beatty, president of the Canadian Chamber of Commerce, has said the “balkanized 13 markets” across Canada hits consumer choice and drives up prices, as provinces seek to protect local businesses from competition. “It’s lose, lose, lose,” he said.
Internal trade accounts for 20 per cent of Canada’s GDP, or $366 billion. But interprovincial barriers and restrictive regulatory regimes have frustrated the intention in the Constitution that there be an unimpeded market of “articles of growth, produce or manufacture” across the country.
We have enough runway to do something big and significant for Canada
A year ago, Moore took aim at trade barriers estimated to cost the country $50 billion a year last year, stating a new Agreement on Internal Trade was his “No. 1 priority.”
He said then that the election of business-friendly governments across the country, including in Quebec, had created a “once-ina-lifetime opportunity” to make progress.
In tabling the federal budget in April, the Conservative government announced the creation of an Internal Trade Promotion office within Industry Canada to support the negotiations.
Federal officials have stressed that progress is being made on the internal trade front.
The New West Partnership is a tripartite trade agreement between British Columbia, Alberta and Saskatchewan, which uses a negativelist approach that considers all sectors to fall within the terms of the deal unless they are specifically carved out of it.
There has also been some progress in the East, where Ontario and Quebec have agreed to align government procurement with the terms of the trade deal with the European Union, to avoid the prospect of provincial contracts being opened up to European companies but not Canadian firms from out of province.
The communiqué, to be issued by the chair of the premiers’ working group, Ontario’s Brad Duguid, is likely to put forward the deadline of spring 2016 for a completed deal.
Critics point out that may be ambitious, given how deeply protectionism is ingrained in many provinces.
Saskatchewan won a case to ship vegetable oil “dairy analogues” (such as margarine) into Quebec last year — but Quebec is now appealing that ruling, nearly a decade after losing a previous case that required margarine sold in Quebec to be paler than butter.
In another case, Ottawa lifted a ban on inter-provincial wine exports, prompting some provinces to introduce their own restrictive rules limiting interprovincial exports, so that they could still claim the taxes.
In terms of labour mobility, in occupations as diverse as insurance, hairstyling and dentistry, there is a lack of common Canadian certification.
However, officials said they are cautiously optimistic that the deadline of spring 2016 can be met.
“We have enough runway to do something big and significant for Canada,” said one federal official.