Canada needs free trade—between ourselves at least

The existence of onerous trade barriers between provinces often comes as a great surprise to Canadians. It would seem to suggest that one of the great advantages of Confederation and the birth of our nation 150 years ago would mean that Canadians could largely ignore the borders between our respective provinces, but nothing could be further from the truth.

In the century and a half since the union between Upper and Lower Canada created the Dominion of Canada, each province in the federation has erected literally miles (and after the introduction of the decimal system—kilometres) of red tape and regulations aimed squarely at impeding trade between ourselves.

Rules prevent the movement of labour, alcohol and a host of other products freely across our internal borders, obsessively aimed at protecting local jobs and companies from the pressure of outside commercial interests, but a more cynical view might be that it is really far more likely to be protecting politician’s jobs and the interests of their local fundraising party attendees.

So kudos would seem to be in order for the federal and provincial governments for their forging of a new interprovincial trade agreement, recently signed with some fanfare. But who really knows? The agreement was announced with plenty of fanfare but almost no detail, and as everyone who follows such things knows only too well, the devil is always in the details.

While the new interprovincial free trade agreement is being heralded as a new, streamlined and modern document that will bring interprovincial trade into the 21st Century, it is also already quite clear that this new and improved model will be hampered by the same-old protectionism as usual approach.

The first clue of that is alcohol will still be exempt from the agreement, the second that each province will continue to have its own list of products and services that will not be subject to the agreement. What is on those lists? Your guess is as good as ours, since the provinces and federal government are keeping them close to the chest. What is known is that the provincial and territorial trade ministers have been directed to work through the technical issues that remain.

Internal trade barriers are not something to sniff at. Last month a Senate committee confirmed that the cost to the Canadian economy of navigating the trade red tape steeplechase comes in at several billions of dollars each and every year. This is something we simply cannot afford to ignore. Interprovincial trade barriers are the epitome of cutting off one’s nose to spite one’s face.

If anything, the Trumpian era of protectionist sentiments is heralding a new round of buy local provisions (for example the Alberta NDP government indicated they want to be able to give preference to Alberta businesses and individuals as the western economies continue to tank). The compromise that has apparently been reached in that recent issue is even more troubling to central Canada. It seems to be in the works that BC, Alberta, Saskatchewan and maybe even Manitoba will be exempted from the buy local provisions, and talk is that the Atlantic provinces will also receive a bye, leaving only Ontario and Quebec companies locked out of the bidding on government contracts. It may well be a double-whammy, as the protectionist provisions will not fly in the face of recently negotiated international trade agreements such as CETA (Canada European Trade Agreement). Infractions tend to hit at the federal level, leaving us all holding the bag.

It is long past due that the provinces roll up their sleeves and get to work harmonizing the patchwork of incongruent rules and regulations that act to impede trade. There are still far too many kilometres of red tape lying between Canadians, and no amount of feel good photo opportunities will take the place of real progress in levelling the playing field so that we can all get on with the business of creating a more prosperous country.