As we watch the Brexit turmoil in Europe, Canadians might be tempted to feel pretty good about the economic and political stability here. However, Europe has managed to accomplish something we still haven’t figured out in Canada – developing a single economic market.
The greatest benefit of European Union membership is access to the single economic market comprised of all 28 member nations, which allows for the free movement of goods, capital and services between countries. Even those who led the victorious ‘leave’ campaign in the United Kingdom say they would like to maintain this privileged economic access to the European market.
Yet, over here, Canada remains a collection of 13 regional markets separated by a myriad of competing rules and standards that weakens economic growth by increasing costs and limiting choice for consumers, business and governments. It is astonishing that 28 independent countries can collectively lower the economic barriers between them while Canada has been unable to do so between 13 provinces and territories.
What’s even more astonishing is that Canada’s carefully-nurtured, archaic internal barriers will make it easier for foreign companies to do business in Canada than it is for Canadian companies. For example, once the Comprehensive Economic and Trade Agreement (CETA) with the EU is ratified, European companies could have better access to provincial procurements in Alberta than companies in other provinces would. And, because other jurisdictions may retaliate by blocking Alberta businesses, everyone loses. That’s what happens when governments forbid free and open competition: less choice.
This wasn’t how it was supposed to go. In 1994 the federal, provincial and territorial governments signed Canada’s Agreement on Internal Trade (AIT) with the objective of lowering these economic barriers in Canada and ‘fostering improved interprovincial trade by addressing obstacles to the free movement of persons, goods and services within Canada.’ They had the novel idea that, 117 years after Confederation, we should follow our country’s founders’ idea that we were one nation, with the ability to move freely across provincial and territorial boundaries.
The agreement has fallen well short of its promise. Although there has been some progress improving the AIT, governments have also been heaping countless new regulations on business, many of them inconsistent from province to province, creating ever-higher barriers. This lack of progress, which has been a continuing frustration for the Canadian business community, was captured in a report issued last month by the Senate Standing Committee on Banking, Trade and Commerce, “Tear Down These Walls: Dismantling Canada’s Internal Trade Barriers.” The report is the latest to call on the federal, provincial and territorial governments to take urgent steps towards creating a single Canadian market.
However, we may finally have reason to be hopeful. At an August 2014 meeting in Charlottetown, the Premiers made a bold commitment to negotiate a new internal trade agreement by March 2016. While the March deadline was missed, internal trade Ministers from across the country are meeting in Toronto on July 8 to finalize a new agreement.
There is still hope that this meeting will be more successful than previous efforts to remove interprovincial trade barriers. For one, the provinces have finally acknowledged that the fundamental architecture of the AIT is broken. Most provinces recognise that opening their markets and freer trade across the country can help grow the Canadian economy and assist our businesses to compete with global giants.
When Ministers meet in Toronto this week they must remember their collective responsibility to act in the national interest. How can we expect more Canadian companies to become global champions when we make it this difficult to become Canadian champions?
Negotiating small, incremental reductions in internal trade barriers has failed. The provinces must be big in their thinking and bold in their approach.
As we prepare for next year’s 150th celebrations, why not act as one country where all Canadians are treated equally? Let’s eliminate these barriers now.