Maddening trade barriers cost billions for provinces
Regulation differences could steal $130B from economy each year, Senate study finds
“Mind-boggling” differences in provincial regulations cost the economy as much as $130 billion a year in lost trade opportunities, according to a Senate report released Tuesday.
The Standing Senate Committee on Banking, Trade and Commerce report found that there are “far too many unnecessary regulatory and legislative differences exist among Canada’s jurisdictions.” The barriers include differing rules on everything from truck tires, to alcoholic beverage sales, to carbon emissions.
“They are very frustrating for business people and they limit accessibility to market easily because they require different production techniques,” said Sen. David Tkachuk, chairman of the committee.
The report, called “Tear Down These Walls: Dismantling Canada’s Internal Trade Barriers” comes as members of the House of Commons debate an Opposition motion calling on the federal government to refer a recent ruling on cross-border beer shopping in New Brunswick to the Supreme Court for review. The Conservatives say a New Brunswick judge’s decision to toss out charges against Gerard Comeau for illegally importing alcohol from Quebec has implications for interprovincial trade.
The motion calls on the House to recognize that it is a constitutional right for Canadians to trade with Canadians.
The Senate report agrees with the need to remove internal trade barriers. It suggests that international trade agreements have made it easier for global companies to do business in Canada than for domestic businesses in one province or territory to trade in another.
While there is a lack of research on the economic costs, the committee agreed with witnesses who estimated the barriers amounted to $50 billion to $130 billion each year in lost gross domestic product.
The committee said a timeline for a renewed Agreement on Internal Trade, due in March, has lapsed. The Senate committee is calling for a new proposal by July 1, 2017, in time for Canada’s 150th birthday.