Transportation costs the biggest hurdle in interprovincial trade: survey

An aerial view shows container ship Mombasa Express waiting to be unloaded in the Port of Montreal in Montreal on Thursday, Nov.14, 2024. THE CANADIAN PRESS/Christinne Muschi

A national survey suggests transportation costs are the most common hindrance to interprovincial trade for businesses both selling and purchasing goods and services.

Just over one-quarter of goods and services purchased by Canadian businesses came from suppliers in different provinces or territories in the 12 months preceding the Statistics Canada survey, which ran from June to October of last year. Over 22 per cent of all sales in that time were interprovincial.

Pushes for interprovincial trade

As U.S. President Donald Trump’s tariffs cast a shadow over Canada, the federal government is trying to find a way to remove the internal trade barriers between provinces and territories.

The federal Committee on Internal Trade has said that the elimination of these barriers could add up to $200 billion to Canada’s economy and help lower the costs.

Internal Trade Minister Anita Anand told reporters on Feb. 5 it was possible to scrap the interprovincial trade barriers within 30 days.

Just two days before Anand spoke in Halifax, the Ontario Chamber of Commerce (OCC) said it is urging Canada’s premiers to dismantle the internal trade barriers.

In a letter signed by all provincial chambers on Feb. 3, OCC president and CEO Daniel Tisch wrote, “By removing internal trade barriers, our premiers can lead the way in creating opportunities for businesses and lowering costs for consumers in every province and territory.

“It’s hard to call for free trade abroad while maintaining barriers to trade within our own borders.”

Here’s where the challenges lie

While the OCC and Anand suggest changes could be coming, Stuart Trew from Canadian Centre for Policy Alternatives told CTV News that the removal of the barriers will come with its own set of challenges.

“Those barriers include restrictions on the sale of alcohol regulatory standards for industries like trucking that vary by province, as well as labor mobility limitations due to differences in licensing and certification requirements,” Trew said.

The professional credentialing bodies across the country impose different requirements for people in the same professions and usually do not accept other provinces’ certifications.

By sector, wholesale trades and manufacturing businesses were found to be the most likely both to purchase and sell goods and services interprovincially. Regionally, businesses based in the territories purchased the most goods and services from beyond their boundaries, most of all in Nunavut, while those in Ontario and Quebec ranked lowest for interprovincial trade.

Among sellers, the highest proportion of Alberta businesses made sales to other provinces or territories, though in total, over half of goods and services purchased interprovincially came from businesses in Ontario.

The survey showed the highest number of likely customers were from Alberta, followed by British Columbia and Ontario.

International trade more common

In comparison, nearly a third of businesses in the survey indicated they bought goods and services from international suppliers, while only around 14 per cent of businesses sold goods and services internationally.

The wholesale trade industry was recorded as most likely to have made purchases from another country, while the manufacturing industry was the most likely to have sold internationally, according to the survey.

British Columbia businesses were the most likely to have engaged in goods and services from outside Canada.

The biggest hurdles for international trade, according to the survey, were transportation costs, followed by currency exchange.

With files from The Canadian Press