Unleash Canada’s full potential now
The Canadian Free Trade Agreement was supposed to liberalize trade between provinces in 2017. However, most provinces have since made no progress in reducing interprovincial trade barriers. Now more than ever, with Canada’s damaged economy, action must be taken.
There are various barriers to trade: differences in regulations, certification requirements for professions, and provincial monopolies over the distribution of alcohol, to name a few. Each province has unique policies, which hinder trade, lower productivity, reduce worker mobility and raise prices for goods and services.
If we were to tear down internal trade barriers, Canada stands to add an $80-billion-a-year stimulus to its economy at absolutely no extra cost. The International Monetary Fund estimated that administrative barriers to trade of goods across provincial borders cost the country the equivalent of 4 per cent of annual gross domestic product. Removing them would create more than $2,000 per person.
Imagine the frustration from our wineries, for example, that have an easier time trading with their American counterparts than with other Canadian provinces. To characterize this as absurd is an understatement.
My colleague Dan Albas presented a Private Member’s Bill, which I seconded, on this exact issue, providing a solution via direct consumer purchases through Canada Post. Conservatives recognize the potential that Canada has within its own borders to help Canadian entrepreneurs and consumers. The online environment today gives the federal government an opening to find creative solutions. Only four provinces currently allow direct-to-consumer shipping of alcoholic products: British Columbia, Manitoba, Saskatchewan, and Nova Scotia. Many provinces, like Québec and Ontario, are highly protective of their sectors and their state monopolies. This PMB would require them to explicitly step out of the agreement to stop such practices- a move they will have much difficulty justifying.
But why even jump through all these hoops? There is an even easier solution: political goodwill. Experts agree that the entirety of the problem can be fixed within a weekend.
Some provinces have taken measures together. The New West Partnership Trade Agreement (NWPTA) between British Columbia, Alberta, Saskatchewan and Manitoba is a perfect example.
The agreement is a standard for how provinces can remove trade barriers by establishing groups to deal with labour mobility, financial services, government procurement, alcoholic beverages, and more. It has led to a deal to harmonize construction codes by 2025 to make it easier for builders and suppliers to do business across the country. This alone may produce economic gains of up to $1 billion by 2028. It has also moved to harmonize quality inspections for apples, potatoes, and blueberries, for example, which can differ from provincial inspections. Its guided provinces to adopt common standards within occupational health and safety rules for items like first aid kit contents, and life jackets. These are amazing steps that provinces can take to create jobs, grow the economy, make the lives of Canadians better.
With that said, all provinces can and should act unilaterally to reduce trade barriers. The Alberta government, for instance, unilaterally removed 8 of 14 remaining exceptions to the Canadian Free Trade Agreement. Other provinces should also follow suit.
The COVID-19 pandemic has stunted Canada’s economy. More than ever, we need common sense solutions to maximize Canada’s potential and secure our future. And we need them now. We can no longer afford to procrastinate. Canadian jobs and our economic recovery from COVID-19 is counting on it. Let’s get it done.