Binkley on internal trade

Alex Binkley is a foremost political and economic analyst, whose website is Readers will be aware that his columns in True North Perspective have foreseen political and economic developments in Canada. This week in ...

The Binkley Report

Domestic trade deal needs details

By Alex Binkley
True North Perspective

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October 2014 The Harper government has unveiled a proposal for putting teeth into the Agreement on Internal Trade (AIT) without providing many details on how it is supposed to be all tidied up in time for the country’s 150th anniversary in 2017.

Basically the government’s message is that for a country trying to conclude a free trade deal with Europe and participating in negotiations on a sweeping agreement covering the Asian Pacific region, we ought to be able to accomplish as much at home.

Although the AIT was signed two decades ago, it appears to have amounted to a paper tiger in terms of reducing trade barriers in Canada. Trade Minister James Moore says “Persistent barriers to internal trade, including regulatory differences, inconsistent standards, and restrictions on the free movement of people, goods and services, fragment our economy and put Canadian firms at a disadvantage. The result is a weaker Canadian economy, lost jobs, and a less united Canada. We owe it to Canadians to take action by breaking down the barriers to building a modern economy. Together we can achieve our common goal of one nation, one national economy.”

If you have heard this kind of cheerleading before, it’s because it sounds so much like the way the Harper government promotes the Europe and Pacific deals. Lots of big talk and not many details.
The examples cited for tackling these barriers are nutty provincial liquor and labour mobility laws and regulations. In other words, Ottawa wants to lean on the provinces to clean up their act. This is the same government whose prime minister won’t meet the provincial premiers as a group, which is the kind of forum where such a discussion should start.

The first step for the government should be producing a full list of all the provincial trade barriers and how their removal will benefit us. After all, the AIT has been in force for 20 years and the problem areas should be well known by now.

A thorough discussion about internal trade roadblocks would a good move but let’s start with the federal government spelling out the details. After all, the feds won’t have to do much. All the changes will have to be made by the provinces.

The federal government has the authority to regulate trade and commerce while the provinces oversee important economic areas such as to starting and running a business, obtaining professional accreditation, and ensuring consumer safety. Critics complain with justification that this results in a multiplicity of laws, regulations and policies across Canada. Moore’s announcement says in part that “Within this complex environment, cooperation between levels of government is the best way to promote economic growth and safeguard the interests of Canadians.” Co-operation of course is a two way street and not just the feds pontificating at the provinces.

In addition to actually talking to the provinces about instead of just making speeches to business groups, the feds should appoint someone acceptable to the provinces with sufficient clout to lead the discussions.
Alex Binkley