Premiers need to reaffirm commitment to interprovincial free trade

Date: July 8, 2019

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As originally published in The Globe and Mail

Goldy Hyder is president and chief executive officer of the Business Council of Canada. Dan Kelly is president and chief executive officer of the Canadian Federation of Independent Business.

Every day, it seems our politics are becoming more divisive.

Fortunately, there is one area where parties of all stripes can find common cause: interprovincial trade.

The Canadian Free Trade Agreement (CFTA), implemented in 2017, is a shining example of multipartisan co-operation. The initiative was launched by the federal Conservatives and concluded by the Liberals. The provinces around the negotiating table were represented by governments of all stripes.

Although we should celebrate the CFTA as a significant accomplishment, there is more work to be done to enable trade and harmonize regulations across our provincial boundaries. The current agreement still contains hundreds of exemptions, including for such mundane things as the sale of bullfrogs in Ontario and fur-harvesting licences in Nova Scotia.

Labour mobility continues to be restricted by provincial authority control over occupational standards and licensing. Moving from one province to another is still unnecessarily difficult for dental hygienists, nurse practitioners, paramedics, lawyers and social workers, to name a few.

The Regulatory Reconciliation and Co-operation Table created by the CFTA has had some early successes, including progress on critical items such as tires, first-aid kits and hearing-protection standards. An ambitious work plan has been laid out by the provinces, but its success will depend on unwavering political support.

Another area where some progress has been made is on alcohol trade, with a few provinces increasing personal importation limits. But, rather than increasing the limits, why not remove them altogether and allow for direct-to-consumer sales of wine across the country?

Recently, the International Monetary Fund concluded that reducing internal trade barriers in Canada could increase real gross domestic product by almost 4 per cent – a much larger gain than expected from recently signed international trade agreements. With our economy in low gear, growing at only 1.2 per cent this year, boosting growth through internal free trade is a natural fit for every party’s platform.

This month’s Council of the Federation meeting, a biannual gathering of Canada’s premiers, is an ideal opportunity for the provinces and territories to reaffirm their support for the CFTA and commit to addressing remaining trade barriers. One way to show their support would be to make internal trade a standing agenda item when premiers gather. Even more ambitious would be a commitment to eliminate all exemptions in the agreement by 2030.

If there is opposition from some provinces to these measures, there is nothing stopping ambitious premiers from moving unilaterally to dismantle remaining trade barriers once and for all. Other provinces could follow suit later.

This is not just about boosting the Canadian economy. Businesses of all sizes and the millions of Canadians they employ in communities across the country stand to gain from efforts to remove remaining barriers to trade. Antiquated rules and regulations make it difficult to move across Canada for a new job opportunity, narrow choices for consumers, stifle competition and ultimately make Canada less competitive on the world stage.

A fragmented market also makes it difficult for businesses to expand and have global success. This will be critical if we truly want to diversify our trade outside of North America.

Going global is challenging, regardless of company size. For small companies, which represent nearly 98 per cent of all businesses in Canada, it can be particularly difficult to find new customers in far-flung markets.

How can we expect a company to be successful in Sapporo if they can’t reach customers in Saskatoon? Dismantling internal trade barriers will help companies expand and succeed in Canada first, boosting confidence and giving them a better shot at winning in foreign markets.

We urge premiers to act decisively on this issue and bring interprovincial trade into the 21st century.

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