What’s the point of international trade agreements if we can’t agree on free trade within the country? Canada’s premiers met in Whitehorse last weekend and came away with an agreement-in-principle on an internal trade deal they said would help create jobs and improve the economy.
But if the talks bring progress, it will be measured in inches, not miles. There wasn’t an agreement, per se, but only an agreement to work out an agreement. The premiers talked about removing interprovincial trade barriers, but wouldn’t say which barriers would be removed. Creating new exemptions will become more difficult, but provinces and territories will be able to keep exemptions and preferential programs they now have.
A small step forward occurred when B.C., Ontario and Quebec agreed to allow residents of each province to buy wine online from the other two provinces.
Cross-border sales of wine and beer, though, are still severely restricted. A jungle of differing regulations and standards still stands in the way of free trade and labour mobility.
And that jungle costs the Canadian economy about $130 billion a year, says a Senate report released in June.
Titled Tear Down These Walls: Dismantling Canada’s Internal Trade Barriers, the report says that because of international free-trade agreements, it is easier for international companies to do business in Canada than for companies in one province or territory to do business in another.
Or, as one trade lawyer suggests, only half in jest, the best way to do business across Canada is to move your head office to the U.S. so you can have access to every province.
The Standing Senate Committee on Banking, Trade and Commerce report cites a wide array of trade barriers, ranging from trucking regulations to container sizes, that interfere with interprovincial trade.
The committee learned, for example, that “certain truck configurations can only be driven in British Columbia at night and in Alberta during the day, with the result that drivers may have to wait several hours before crossing the border between these provinces.”
Cross-country truckers face a confusion of provincial regulations, such as fuel-saving tires that can be used in some provinces, but not in others.
The B.C. Trucking Association told the committee that in Ontario and Quebec, trucks have to be incapable of going faster than 105 kilometres per hour.
The committee heard of a Nova Scotia brewing company that wanted to expand into Newfoundland and Labrador, but because of differing sizes of beer bottles set by the provinces, the company would have had to set up a separate production system with smaller bottles. Instead of making that investment, the company decided to market in the U.S.
“As a fundamental right, Canadians should be able to practise their profession or trade, operate a business whose goods and services can cross provincial/territorial borders, and purchase goods and services both freely and without penalty anywhere in this great country,” says the Senate report.
“The inability to do any of these diminishes us as a country, and makes citizens and businesses more tied to their region than to their nation.”
The committee has asked federal and provincial leaders to recognize this fundamental right and rid the country of interprovincial trade barriers in 2017, when Canada celebrates the 150th year of its founding as a nation.
“It will make our great nation richer, both spiritually and financially,” says the report.
We doubt that provinces will be able to negotiate away those barriers by then, if ever. Each one wants to protect its own workers, businesses and industries.
The trouble with building a protective wall, though, is that it too easily becomes a prison.
