$21M to Fight Interprovincial Trade Barriers — A Win for the Canadian Confederation
The Canadian project’s never-ending campaign against interprovincial trade barriers has received fantastic news.
Canada’s #Budget2021, released on April 19, 2021, pledged $21M over three years to curb interprovincial trade barriers. This is a significant announcement. Not only does it offer fuel to build upon the progress that has already been achieved on the interprovincial trade file, but it also signals heightened attention and focus on the part of the federal government.
The budget provided that“[r]emoving barriers to trade between provinces and territories will help build a more prosperous economy.” Indeed, remedying the regulatory disharmony found across the country, in areas ranging from gas technician licensing to drug scheduling, will help ease burdens faced by business. Canadian economists have been quantifying the economic damage that results from interprovincial trade barriers in earnest since the 1980s; an often-cited IMF publication from 2019 estimates that domestic trade barriers impose the equivalent of a 7% tariff on goods crossing provincial boundaries. And in a post-COVID Canada, a nation battered by the fallout of the pandemic, economic growth is as powerful an argument as it has ever been to rally against domestic trade frictions.
According to the budget, the monies that it pledges are earmarked for the Canadian Free Trade Agreement’s (CFTA) Winnipeg-based Internal Trade Secretariat (ITS), as well as creating for the creation of a repository of open internal trade data that will help identify trade obstacles. Bolstering the capacity of the ITS will go a long way in supporting a sustained ground war against interprovincial trade barriers. A drive for more data will also help make trade barrier debates more salient and visible.
One item of particular interest is a vaguely-worded statement, suggesting that some of the monies will be used as transfers to provinces and territories in order to “[p]ursue internal trade objectives.” When translated to common English, it would seem that the federal government would be open to paying provinces and territories to remove trade barriers. It’s no secret that many trade barriers are a result of vested special interest; perhaps federal money may be sufficient incentive to overcome certain lobbying forces that provincial and territorial governments encounter.
Interprovincial trade barriers could not be less terrified in the wake of this budget announcement. Vitally important now is convening Canada’s provinces and territories to the discussion table.