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Fewer Fences, Better Neighbours: Jackman-Atkinson

June 10, 2017 8:00 AM | Columns

By Kate Jackman-Atkinson, myWestman

Transport Warehouse

NEEPAWA, Man. — Canada is a vast country. While distance may limit a person’s ability to see all of it, for most Canadians, provincial borders are nothing but a big sign, some nicer pavement and maybe a rest area; there are no border guards, checkpoints or fences. But the same doesn’t apply to businesses and their products.

The average Canadian gives little thought to interprovincial trade, we just assume it’s as easy for products to cross provincial borders as it is for people. After all, Section 121 of Canada’s founding document, the 1867 Constitution Act, talks about interprovincial trade, reading, “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.” For businesses, working across borders isn’t nearly as simple as it should be.

But that’s about to change.

On July 1, the long-awaited Canada Free Trade Agreement (CFTA) will come into effect, making it easier for goods and services to move across provincial borders. Last July, Canadian premiers met and hammered out the agreement, which at the time, they called, “unprecedented.”

CFTA is a big deal because currently, almost every province has their own regulations when it comes commerce, including transportation, packaging requirements, food safety regimes, workers’ compensation legislation and recognition of workers’ qualifications. In many cases, it’s easier for a European company to trade into a province than it is for a Canadian company the next province over.

Last June, the Canadian Senate looked at interprovincial trade. Their official report described it as, “Mind-boggling rules, duelling bureaucracies, and maddening regulations.” Strong language from Canada’s house of sober second thought. Not only are the regulations a challenge for businesses, the Senate report estimated that they cost the Canadian economy at least $1 billion a year, but probably more.

Interprovincial trade flow is extremely important to Canadian businesses and in a 2015 survey conducted by the Canadian Federation of Independent Business (CFIB), 87 percent of small business owners said that premiers need to reduce trade barriers between provinces. CFIB has been collecting examples from members outlining the challenges they have faced when it comes to interprovincial trade and there are many of them. For example, if a pharmaceutical or medical product is deemed safe in one province, it must undergo nearly identical testing in each province where it’s to be sold. Additionally, differing standards for container sizes make interprovincial trade in products such as milk, creamers and beer unnecessarily difficult.

One of the key needs put forward by the senate report and CFIB’s lobbying efforts was the idea of a negative list. This means that the trade agreement will cover all people, good, services and investment, unless they are specifically excluded and placed on a negative list. This is something that didn’t exist in previous agreements, which meant that unless a specific agreement was in place for something, there was no free trade. The negative list is one of the key components of CFTA, which will also open up $4.7 billion in procurement opportunities to companies across Canada and make it easier to hire workers from outside the province.
There are times when provinces need different regulations, especially when it comes to safety, but these cases should be the exception rather than the rule. Canadian governments are working hard to open more international markets and preserve international agreements already in place, opening provincial doors for Canadian businesses should be of equal importance. Trade needs to be as easy as possible in order for Canadian companies to grow and what could be easier than trading with your neighbour?