Federal government sets course on eliminating provincial trade barriers

The federal government has hired Ernst & Young to create a tool to identify priority areas for breaking down trade barriers between the provinces.

On December 12, Industry Minister James Moore announced the creation of the Internal Trade Barriers Index, saying it will be a step forward in trying to make it possible not just for goods to be able to freely move between provinces, but also “labour,” which includes professionals. The move potentially affects professionals engineers, who are licensed to practice on a provincial basis.

Originally promised in the federal Budget 2014, the index “will set a baseline for understanding internal trade barriers and how the impacts increase or decrease over time. It will also give policy makers good information to guide decisions on priority areas for action.”

Back on August 20, Industry Canada released a related report, entitled: “One Canada, One National Economy: Modernizing Internal Trade in Canada.” It notes that there is growing support among the provinces for breaking down barriers, citing the New West Partnership Trade Agreement among B.C., Alberta and Saskatchewan, and labour mobility resolutions among Atlantic provinces.

The report points out the anomaly of Canada engaging in a growing number of free trade agreements with other countries, while internal trade barriers exist between provinces. It quotes John Manley, head of the Canadian Council of Chief Executives: “It makes no sense for Canada to provide greater benefits to our trading partners than to companies, workers and consumers within our country. We urge all levels of government to cooperate in the elimination of all unnecessary barriers.”

The report outlines the history of trade in Canada and how the 1867 Constitution of Canada gave provinces the authority to regulate certain important economic areas “such as those related to starting a business [and] obtaining professional accreditation.”

But the result has been: “a multiplicity of laws, regulations and policies across Canada.”

In 1994, the Agreement on Internal Trade (AIT) was signed and is still the framework for reducing trade barriers. But, says the report: “Since coming into force, the AIT has achieved limited success,” and “after 20 years the very architecture of the agreement is out of date, resulting in a patchwork that does not cover all economic activity or even embody a presumption of open trade.”

Now is the time to remedy that situation, suggests the report: “At a time when Canada is entering into new trade agreements around the world that seek to eliminate irritants and barriers to international trade, such inefficiencies within our own borders send mixed messages to our trading partners and undermine Canada’s economic reputation abroad.”

To read “One Canada, one National Economy: Modernizing Internal Trade in Canada,” click here.

To read a press release of Consulting Engineers of Ontario with a different view on the subject, click here.