Can bolstering provincial trade help thwart Trump's tariffs? Ontario looks at reducing barriers
Doug Ford has promised legislation to address trade barriers coming next month
Doug Ford says pulling down internal trade barriers will be among his first orders of business when Ontario's legislature resumes next month, and experts say the premier should start by addressing rules that make it difficult for workers to move seamlessly between provinces.
Ford told reporters last week that a bill to tackle interprovincial trade walls will be coming soon, but provided few details on his way into a meeting with Prime Minister Mark Carney and the rest of Canada's premiers. He has praised Nova Scotia's recent bill that offers mutual recognition of labour mobility, goods and services with other provinces.
"We're getting rid of all the exemptions when we get back in the legislature," Ford said last week. "That's kind of the first piece of legislation. I know Premier (Tim) Houston has done it, and hopefully all the other premiers are going to follow, because it's going to benefit everyone in Canada."
Removing interprovincial trade barriers has become a topic of increased focus as a possible strategy to mitigate against the losses caused by U.S. President Donald Trump's tariffs on Canadian goods. The barriers are most often represented as individual standards, rules or educational qualifications required in different provinces that slow or prevent trade.
Last week, Carney pledged to have "free trade by Canada Day" and said removing barriers to the free movement of workers, goods and services would increase the size of Canada's economy by $250 billion — equivalent to more than $6,000 for every Canadian.
Daniel Tisch, the CEO of the Ontario Chamber of Commerce, said that group has been urging the Ford government for years to remove as many barriers as possible. They've been closely watching the premier's comments on the issue and would like his legislation to allow free flow of workers and remove costs from businesses.
"We're certainly expecting to see legislation tabled as a high priority in Ontario that would effectively enable mutual recognition of credentials in other provinces," he said.
"This could be very powerful because we have labour shortages in some areas and there's no reason why a credential that's recognized in Quebec or Alberta or British Columbia or anywhere else, shouldn't be recognized in Ontario."
Ontario needs 26,000 registered nurses and the profession is just one of many bogged down by red tape on certifications between provinces, according to the CEO of the Registered Nurses Association of Ontario. Doris Grinspun said harmonizing credential recognition and lowering registration fees to help nurses move and work across the country should be part of Ford's legislation.
"Let's solve the issues of human resource challenges that we have, whether it is in the health-care sector or in other industries," she said.
Removing homegrown barriers part of the solution: CFIB
The Canadian Federation of Independent Business said it too is closely watching what Ontario does, hoping that it joins Nova Scotia in offering up mutual recognition of credentials and product standards with other provinces. Meeting individual standards to open up a new provincial market can often be time consuming and can hike costs for businesses, said CFIB's director of provincial affairs for Ontario, Julie Kwiecinski.
"This is something we can control and all provinces should follow suit," she said. "We've been fighting for this for years — mutual recognition. It's the easiest way to go about this, to let people and goods flow freely across Canada's provinces."
Daniel Teeter, who studies interprovincial trade at Queen's University, said he thinks Ford could immediately remove a series of exemptions under the Canada Free Trade Act that require businesses in some industries to be located in the province or use locally-produced materials or components.
"When it comes to these exemptions, there are several that can be easily removed but also have a very low impact on the economy," he said.
Teeter also cautions that some of the large numbers quoted by politicians during this debate about the impact on Canada's economy need more context. Realizing that large-scale economic benefit would require the removal of most of the barriers to achieve them, which may not be possible, he said.
Opening up alcohol sales and the regulated dairy markets, which constitute some of the barriers across the country, could prove thorny issues, he said.
"A lot of this evidence comes from certain assumptions, (which are) perhaps unrealistic," Teeter said.
Possible gains could be overstated, economist says
Marc Lee, a senior economist at the Centre for Policy Alternatives, said potential gains from eliminating interprovincial trade barriers could be overstated. That's because Canada has done work over the past few years to harmonize requirements and rules, he said.
"To the extent that there's low hanging fruit here, that fruit was harvested a long time ago," he said.
Lee points to a series of trade agreements, including the Canadian Free Trade Agreement inked in 2017, as the culmination of work being done to harmonize regulations and rules.
Lee said he also doesn't want to see an erosion of safety standards or requirements in the name of free trade. Some trucking rules are often cited as interprovincial trade barriers and they dictate load size and weight that can be hauled in some regions, he added.
"The reason why we have different standards in British Columbia is because we have mountains, we have big climbs and we have big descents," Lee said "So, having the type of trucking regulations that make sense in Saskatchewan, where the terrain is relatively flat, simply you can't do it in British Columbia."
Lee said he hopes that the provinces produce concrete examples of trade irritants that can be eliminated, rather than just empty statements.
"I think Canadians need to dampen their expectations of what's likely possible from this conversation," he said.
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