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Trade Barriers Policy Paper
Domestic businesses try and fail to send locally-produced goods or provide professional services to partners in neighbouring provinces. Why? Because interprovincial trade barriers prevent it.
Trade Barrier Opinion Summary
The Canadian Global Cities Council (CGCC) is a strong voice for national policies that build competitive and sustainable urban economies. The CGCC unites Chambers of Commerce and Boards of Trade from across Canada’s major urban centres as a champion for domestic free trade and cross-provincial partnerships. The overarching objective is to build necessary infrastructure to foster commercial growth across Canada. These policies help to strengthen Canada’s position as a competitive economy in the international market.
Until political leaders are ready to prioritize pro-business and pro-economy trade liberalization across provincial boundaries, Canada’s economy will continue to be held back from reaching its full potential. The fact that it’s easier to do business with Texas than another province does not make sense and is hurting local business, regional economies, and Canadians.
Does Trade Barrier Policy Add More Regulations?
Policy does not always mean making more rules and regulations. Sometimes, good policy involves removing regulations that hinder economic development. For example, when navigating red tape becomes too costly it may deter business and stunt economic prosperity.
The Cost of Inter-provincial Trade Barriers
A 2020 news release from the Ottawa Board of Trade highlighted key drawbacks and losses stemming from current Canadian trade barriers. The organization is a non-partisan, non-profit, independent organization with a mission to create prosperity through advocacy, collaboration and leadership. And, the Ottawa Board of Trade is the latest member organization to join the CGCC.
Below are key findings regarding issues and lost opportunities resulting from current trade barriers:
- Over $80 billion in economic potential each year is lost because of outdated internal trade barriers.
- Internal trade costs add nearly 7% to the costs of goods.
- About 9 in 10 Canadians support free trade between the provinces.
- Free trade in Canada could raise the country’s gross domestic product by 4% – more than the gains from any recently signed international trade agreement.
Given the significant economic loss from trade barriers and the considerable support for less restrictive trade between provinces—it is surprising that trade barrier policy has yet to be reformed.
Internal Trade Liberalization as Part of Economic Recovery
The CGCC and its member organizations represent the interests of all businesses at all levels of government on issues that reduce barriers to doing business and create new opportunities. Patrick Sullivan, the Chair of the CGCC and President and CEO of the Halifax Chamber of Commerce, has spoken out against the restrictive trade barriers in the context of COVID-19 economic recovery:
“There is nothing stopping ambitious Premiers from showing leadership and taking actions on their own to dismantle their own trade barriers. Removing these restrictions will strengthen Canada’s economy during and after COVID-19 recovery by lowering costs for Canadian businesses, boosting competitiveness and encouraging domestic investment.”
The COVID-19 health and economic crisis has added to ongoing global trade tensions and created significant disruptions in global supply chains, making it difficult for many businesses to both access materials and supplies they need and ship goods across borders. It is time to focus squarely on what can be done domestically to stimulate economic growth and build resilient supply chains. International supply-chains are no less important but given the greater volatility and predictability of the global market it is imperative to create domestic economic safeguards.
A Step Towards Stronger Interprovincial Trade
The core of the Canadian economy is built on trade. As a resource rich country with diverse and technologically advanced industries it is essential that Canadian trade policy reduces the barrier of trade to ensure greater access to these goods. Canada generates the majority of its GDP from supplying crucial resources between provinces and around the world. The CGCC advocates for policies to remove inter-provincial and international trade barriers which limit potential trade surplus from more fluid trade.
“For instance, Canada’s interprovincial trade barriers prevent many businesses from building relationships with domestic partners. The fact that it’s easier to do business with Texas than Alberta just doesn’t make sense – not to our business members and not for our economy.” —Stated by Jan De Silva, President and CEO of the Toronto Region Board of Trade.
As provincial and federal leaders continue to discuss measures to boost Canada’s economy, interprovincial trade needs to be a priority. While cross-country collaboration is occuring, Premiers need to take additional unilateral steps to remove barriers to Canadian goods in their own market – including mutual recognition of inconsistent standards with an emphasis on the reconciliation and removal of duplication.
Reducing Trade Barriers — Call to Action
Representing more than half of Canada’s GDP and population, the CGCC collaborates to influence policy that negatively impacts the economic competitiveness of domestic business. As one of the most influential commerce interest groups responding to the adversities facing businesses, the CGCC acts as a catalyst for Canada’s economic growth agenda.
Reach out to your the CGCC member Chamber of Commerce or Board of Trade representing you and your business and share your experiences navigating navigating cross-provincial policies and regulations so that the CGCC can properly represent your interests on a national level.
