FORSETH – Interprovincial trade remains tangled in protectionism

 

NOTE: The following column by Alan Forseth was first publish on March 4, 2019. He says that “Since then, there’s been little done to ensure that trade between provinces can have impediments removed. With ever increasing threats of tariffs on our products, it is more important than ever that ‘talk’ ends, and that instead, we see actual ‘results’.

IN JUST 29 WORDS (Constitution Act Section 121) the Fathers of Confederation managed to state that:

“All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”

And as the Huffington Post commented:

How beautifully succinct; how pellucidly clear. No need for clumsy jargon about “growing the economy,” gauzy “visions for promoting trade,” or cross-fingered promises of “working groups” to “explore opportunities.” And the best part: it’s already part of the supreme law of the land.

Year after year after year, however, both provincial and federal politicians have huffed and puffed about removing inter-provincial trade barriers.  Still 150 years later we have yet to see, or find, one news story announcing an end to these barriers.

We in Canada’s two most westerly provinces (British Columbia and Alberta) approve by a majority of over 60 per cent the removal of barriers to freer trade between provinces … not surprisingly, protectionist Quebec has residents at the lowest end, with just 43 per cent agreeing to lowering of trade restrictions.

The +60-per cent figure for British Columbia makes sense given we are a trading province, and as the B.C. government stated last September, this is especially important considering that about 40 per cent of Canada’s trade takes place within its own borders.

Two stories from CBC News seemed to capture things rather succinctly, however, when it comes to the lack of headway on breaking down barriers:

CBC NEWS …  June 24, 2017

Canadians, after all, can’t be allowed to just run around Canada willy-nilly, buying whatever they want … is there any economic good in them (our interprovincial trade barriers) … “No. The answer is no.” (Daniel Schwanen, at the C.D. Howe Institute)

CBC NEWS … July 16, 2018
Everyone loves to talk about interprovincial trade – but tangible progress is scarce … all the provincial and territorial trade ministers were given a symbolic pair of golden scissors to remind them to start cutting interprovincial trade barriers … the trouble is, they aren’t using them.

So, what is happening?

Not a damn thing really.

While the federal government continues to work on negotiating international free trade agreements … we have yet to see headway being made here in our own country.  That, despite agreement that it needs to happen.  Here in British Columbia a government news story from last fall (Sept 10) indicated that:

“Improving the flow of goods and services helps to create a strong and diverse economy, allowing B.C. companies to grow their business and create good jobs and opportunities in every corner of the province.”

Still, just two and a half months ago the Vancouver Sun brought us this ridiculous statement:
… examples of Canadian companies finding it easier to import goods and services internationally than trading with their neighbouring provinces are far too plentiful — and frequently absurd …

Someone, however, seems to be attempting to restart discussions on freer inter-provincial trade.

At the end of February, Manitoba Premier Brian Pallister commented on the tremendous cost of internal trade barriers to the economy and to households across Canada, and called for a grand bargain to bring collaborative action in the national interest.

“Our commitment to a national vision has eroded over the past few decades.  We have taken some small positive steps but we need to think bigger and move faster,” Pallister said.  “We need leadership in order to rediscover the blueprint for Confederation.”

In his release to the media, Pallister commented that he has sent a letter to fellow premiers seeking their support for a proposal to address two of the most important issues before Canadians:  sustainable and predictable federal support for health care, and reduction of inter-provincial trade barriers.

“I am proposing that we seek a commitment for stable federal health-care funding in return for our support for federal legislation establishing a Canadian economic union,” said Pallister.

Most Canadians will be surprised to learn just how much the tangle of red tape, that ties up free trade between provinces, costs each and everyone of us.  According to Pallister, “… trade barriers cost Canadians the equivalent of a seven per cent sales tax.”

Pallister noted that while our premiers have … recently made some modest progress on reducing trade barriers, we need to think much bigger in order to achieve the real results we all desire.

Reaction from the B.C. government, and in particular Minister Bruce Ralston’s Ministry of Trade, Jobs, and Technology, regrettably is not forthcoming on this topic.

Hoping to see where the B.C. government is on taking down barriers, and perhaps getting a response to Premier Pallister’s recent remarks, I commented to his Ministry:

The issue of trade across provincial borders seems to come up on a fairly regular basis, and so I am wondering what specific steps the BC government is taking to try and have rules, regulations, and red-tape reduced so that freer trade across Canada is available, and to make it easier for Canadian producers and manufacturers have better opportunity to sell to our own citizens.

The answer I received was, “Unfortunately, we don’t have anything we can share on this at this time.”

I honestly do not know if I was being told that Ralston’s Ministry actually did indeed have no information on the topic, or instead that they were unable to provide answers to what I requested.

They are, in my opinion, indeed two separate things.  That said, I have to believe work is being done not only by our government in B.C. … but across the country on this topic.  Either that, or Manitoba Premier Brian Pallister’s words are falling on deaf ears, at least here in B.C.

He is stating that there needs to be discussions and proposals for federal legislation to establish the principle of free flow of goods and services within Canada.

Furthermore, he believes that while provinces would retain the ultimate responsibility for removing barriers that fall under exclusive provincial jurisdiction, federal legislation would empower Canadians to challenge all barriers that obstruct their right to buy, sell, work and invest in every part of Canada.

“The grand bargain we envision with the federal government would allow us to pursue real nation building,” said Pallister.

He also remarked he was looking forward to hearing the thoughts and feedback of his provincial and territorial colleagues on the topic.

Hopefully he’ll have better luck than I, as a British Columbian, did when asking that very thing of my own government

As Brian Lee Crowley, managing director at the Macdonald-Laurier Institute said, “(Brian Pallister) is issuing a constructive challenge to his fellow premiers to move beyond entrenched positions and work together to make progress on two issues that matter enormously to Canadians.  That’s leadership.”

And as a story from Macleans magazine last October observed … a solid majority of Canadians wants to see those impediments to the free flow of goods and services inside the country eliminated … inter-provincial trade barriers should be scrapped because they “restrict choice and competitiveness in Canada’s consumer markets …

And finally, I do indeed hope to hear back from the B.C. government on what is being done with regards to making inter-provincial trade between provinces easier – it’s an important topic – one that while help grow the economy, create more jobs, and save with reduced costs for each of us.

I look forward to clarity on their answer … and a reconsideration of providing a response on this topic.

I’m Alan Forseth in Kamloops.  Please take a moment to share any thoughts you have on this commentary in the Comment Section below.  And as always, I encourage you to pass this on to any you feel may be interested.

Alan Forseth is a Kamloops resident. For 40 years he has been active, in a number of capacities, in local, provincial and federal politics, including running as a candidate for the BC Reform Party in the 1996 provincial election. He is secretary of the Conservative Party of B.C.