Erin McGrath-Gaudet and Jordi Morgan
230 years ago Benjamin Franklin said “No nation was ever ruined by trade.” He added “Even seemingly the most disadvantageous.” As the Atlantic Provinces struggle to kick start sputtering economic growth numbers, it’s critical our leaders apply a laser focus on our own regional interprovincial trade barriers.
While the federal government is making overtures on a national scale, the Atlantic region must begin to show the same common sense attitude we see in the West where premiers are calling for the creation of a domestic free trade zone. While the average Canadian is likely unaware of the barriers to the movement of goods, services and people that exist between provinces and territories, for small businesses looking at markets outside their provincial boundaries, nonsensical trade barriers represent unnecessary cost and lost opportunities.
There are many good reasons for us to be having this conversation now. Canada’s current Agreement on Internal Trade (AIT) is not keeping pace with the changing economic environment. There have been some attempts to create provincial agreements with varying degrees of success – the New West Partnership Agreement between British Columbia, Alberta and Saskatchewan being the most significant- but even its scope is limited.
The recent Comprehensive Economic and Trade Agreement (CETA) with Europe will further highlight the shortcoming of not having free trade within Canada as European companies will now have access to opportunities across Canada that companies in a neighboring province or territory won’t.
So what are some of these barriers?
In many cases, barriers arise from provinces and territories not recognizing each other’s regulations. This often means having to register with the appropriate authorities in each separate jurisdiction, ensuring you are complying correctly with regulations that are slightly different, and paying fees or charging taxes appropriately in different circumstances.
In some cases, governments can outright prohibit the movement of goods. A notable example of this is the prohibition of transporting alcoholic beverages across provincial or territorial borders. The federal government changed this in the case of wine but provinces have been slow to change their own legislation and regulations to permit “cross-border” shipping of wine for personal use.
Many of these barriers will be highlighted in a CFIB report to be released later this fall.
These barriers extend beyond “business” to impact workers directly. A CFIB report released last year highlighted barriers in the area of skilled trades. Of all the trades certified in Atlantic Canada, there is not a single example of apprenticeship requirements being the same in all four provinces. When a Red Seal is obtained, workers are recognized across the country but until a worker achieves that designation, their options for movement, even within the region, are quite limited. While some progress is being made, much more can be done.
Atlantic Canada is facing many significant economic challenges and given our unfavourable demographics, it’s becoming increasingly important that we work together to break down barriers between our provinces to make the best possible use of our economic and human resources.
It’s more important now than ever before to create an environment where Atlantic Canadian businesses have some competitive advantage to counter the environment of high taxes and overly complicated regulation and red tape. Making these moves will require much more effort on behalf of the Atlantic premiers on regional co-operation. As Benjamin Franklin also said, “If we do not hang together, we shall surely hang separately.”
Erin McGrath-Gaudet is Director of Intergovernmental Policy for the Canadian Federation of Independent Business. CFIB represents 11,000 small and medium size businesses in Atlantic Canada.