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In a significant gathering, Prime Minister Mark Carney is set to convene with Canada’s provincial premiers to address the pressing issue of interprovincial trade barriers. Industry analysts suggest that while some progress has been made, the bulk of the work remains at the provincial level, highlighting a slow and complex road ahead for achieving true free trade within the country.
The Urgency of Change
University economist Moshe Lander of Concordia University noted that the urgency for reform has escalated over the past year, but he remains sceptical about immediate advancements. “It’s just become a little more pressing in the last year. But I don’t see any great advancement that would make us feel like the end is near,” he stated.
Following the 2022 expansion of the Canadian Free Trade Agreement, which removed some federal restrictions on interprovincial trade, many barriers still persist. Ryan Greer, senior vice-president at Canadian Manufacturers and Exporters, emphasised that most obstacles are entrenched at the provincial level, stating, “The real heavy lifting is to be done at the provincial level.”
Recent Developments in Trade Agreements
One of the notable achievements in the quest for smoother trade came in November 2022 when all provinces and territories, along with federal representatives, signed the Canadian Mutual Recognition Agreement on the Sale of Goods (CMRA). This agreement permits goods that are legally sold in one jurisdiction to be sold in another without facing additional requirements.
Corinne Pohlmann, executive vice-president of the Canadian Federation of Small Business, pointed out the inherent challenges: “Everybody thinks that their rules are the best rules. But if you mutually recognise, say, OK, you keep your rule, and I’m going to keep my rule, but we’re just going to agree that the rules are sort of equal.”
However, the agreement has notable exemptions, particularly for food, beverages, and other consumer goods, which complicates the trading landscape. For instance, Ontario wineries currently find it easier to export to markets in the UK and Asia than to sell within Quebec. “Clearly this limits consumer choice and runs counter to the spirit of a truly open Canadian market,” remarked Michelle Wasylyshen, president and CEO of Ontario Craft Wineries.
Transportation Challenges
Transportation remains a crucial aspect of free trade, with Ontario Premier Doug Ford recently announcing substantial increases in the export of Ontario goods through Port Saint John. He reported a staggering 153 per cent increase in the movement of key products such as vehicles and agricultural goods over the past year.
Nevertheless, as Greer pointed out, trucking regulations illustrate the slow progress. “Trucking is a good illustration of how slow and difficult this work was,” he said. The retail sector bears the brunt of inconsistent provincial rules that require trucks to stop at borders to adhere to different regulations.
Matt Poirier, vice-president of the Retail Council of Canada, highlighted the systemic issues: “When a province has different rules than another province that would require trucks to stop at the border, change loads, change trucks… it really falls apart quickly.”
The Labour Mobility Landscape
In the realm of labour mobility, the federal government’s introduction of Bill C-5, the One Canadian Economy Act, aims to dismantle barriers for workers across provinces. While it facilitates labour movement in federally regulated sectors, legal experts warn that the act’s applicability is limited.
According to a report by Miller Thompson, “The Labour Mobility Act only applies to federal projects,” meaning provincial regulations continue to govern local projects. The ongoing need for certification across provinces can delay employment, with Pohlmann noting that the process can take anywhere from six months to a year.
Despite these challenges, some provinces are beginning to adapt. “If you come to Ontario and you need to get certified, you can go through that process, but you can also start working much more quickly,” Pohlmann explained.
Why it Matters
As Canada continues to navigate the complexities of interprovincial trade, the outcome of these discussions will have far-reaching implications for the economy. The removal of trade barriers is vital not only for boosting economic growth but also for enhancing consumer choice across the nation. The ability of provinces to collaborate effectively on these issues will determine the success of Canada’s aspirations for a truly unified market, ultimately impacting businesses and consumers alike.