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Knocking down interprovincial trade barriers

February 8, 2022


At ground level, we think of Canada as an open country with highways rolling to the prairie horizon and beyond distant mountain ranges. As we travel across the landscape, we enjoy uninterrupted vistas with nothing to block the views. When we look on a map, though, the geographic border lines are closer to depicting the interprovincial trade story of differences and barriers that impact business and our economy.

Interprovincial trade is multi-dimensional in complexity and includes the movement of goods, services, workers, and investment. Regulations, licences, laws, and other rules governing these sectors vary across jurisdictions, impacting business operations and international competitiveness. There are different provincial regulations affecting the transportation sector, for example, separate dairy and poultry marketing boards, and barriers to labour mobility. There are also barriers to individual import of wine, beer, and spirits that hinder the tourism industry. Collectively, non-geographic internal trade barriers amount to 3.8 per cent of Canada’s real GDP, according to Deloitte. That corresponds to $80 billion or $2,130 per person.

After decades of effort on the issue, the 2017 Canadian Free Trade Agreement (CFTA) was a considerable advancement with a structured process to eliminate trade barriers. However, many still need to be addressed and the impacts are particularly felt by small and mid-sized producers. In an ideal scenario, removing non-geographic trade barriers would see estimated increases in provincial GDP of $11 billion and provincial tax revenues of $1.8 billion. Regardless, governments positioning for economic recovery from the pandemic should prioritize eliminating these barriers to reap the much needed and significant benefits including increased productivity and labour mobility.

Aggressively dismantling interprovincial trade barriers is a top priority that we advocated for in our Federal Election Platform 2021: From Challenge to Change. Combining forces with the Calgary Chamber, we provided next steps to the federal government with a view to eliminating trade barriers and driving economic growth. We continue to advocate strongly for business in the Edmonton Region.

We want the government to prioritize and continue working to remove interprovincial trade barriers through the CFTA while accelerating the elimination of trade barriers through the Regulatory Reconciliation and Cooperation Table. Given the potential positive benefit for the economy, we encourage cooperation with provinces and territories for the greatest results.

A focused approach involving the establishment of a task force that would give direction and strategic support to provinces in dismantling interprovincial trade barriers and pursuing bilateral or multilateral trade agreements is recommended.

We also recommend working with private industry and provinces to replicate the successful Red Seal Program. This would facilitate the free movement of all types of skilled labour by developing consistent and harmonized recognition for professions with specific certifications across provinces.

We urge the government to leverage existing agreements such as the New West Partnership Trade Agreement between the provinces of British Columbia, Alberta, Saskatchewan, and Manitoba. These provinces demonstrated their openness to internal trade with the lowest numbers of CFTA exceptions in Canada. Alberta has the fewest after eliminating 21 CFTA exceptions in 2019.

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