Provinces move to reduce trade barriers between them after Trump tariff threats

Experts say different provincial trade rules cost the country $200 billion per year. CTV News Edmonton's Nav Sangha reports.

One result of U.S President Donald Trump’s threats to place tariffs on Canadian goods: addressing rule differences between provinces to streamline and increase trade between them.

“The threat of Trump tariffs suddenly galvanized the federal government and the provinces into trying to act on this,” Mike Holden, the Business Council of Alberta’s vice-president of policy and chief economist, told CTV News Edmonton on Wednesday.

“That’s great news.”

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Trump took office on Jan. 20 and has been openly taunting Canada for months by suggesting it should become a U.S. state and has repeatedly threatened to impose broad tariffs on Canadian products.

Experts estimate interprovincial trade barriers, which come from each province and territory having its own sets of rules and regulations, hurt the Canadian economy.

The federal Committee on Internal Trade has said that the elimination of the hurdles -- the ones affecting Alberta the most are alcohol sales, transportation and construction -- could boost it by $200 billion.

Holden said one study suggests the interprovincial trade snags added up to the equivalent of a seven-per-cent tariff.

“The provinces have to come together and agree to either some sort of common standard, in some cases, or even agree to mutually recognize one another standards,” Holden said.

“You’ll never be able to eliminate all of them, but any progress is good progress.”

The Committee on Internal Trade, made up of a group of provincial economic development ministers, met virtually last week and plan to meet in person in Toronto on Friday.

A statement from federal Minister of Internal Trade Anita Anand on Feb. 21 said the virtual meeting focused on steps being taken to eliminate exceptions to the Canadian Free Trade Agreement, making it easier for businesses to access financial services, removing administrative barriers and making it easier for workers to move between jurisdictions.

“The discussions between the provinces and territories are energetic, and we are working at an unprecedented rate towards removing barriers to internal trade and labour mobility, for Canadian workers and businesses to succeed,” Anand said.

Diana Gibson, British Columbia’s economic development minister, said her province plans to go to the meeting prepared to make “substantive changes.”

Gibson said if there is a national commitment to reduce barriers, B.C. will “do whatever is necessary” and put forward legislation if that’s what is required.

Nova Scotia’s government on Tuesday introduced a bill aimed at reducing interprovincial trade barriers, but provisions in the bill would only be extended to provinces or territories that adopt similar legislation, said Premier Tim Houston.

B.C. is also looking at tabling such legislation. Premier David Eby on Wednesday said his province could enter agreements with a “coalition of the willing” provinces to recognize each other’s regimes for trade and professions, if an agreement can’t be reached by the federal government.

Interprovincial trade expert Ryan Manucha, a research fellow at the public policy think-tank C.D. Howe Institute in Toronto, said an important starting question for the governments is: Can they agree on a shared economic vision?

“An important part is growth, but then, like some folks may see it, the reason why this whole Canadian project is able to succeed and we’re able to retain national unity is because provinces are able to regulate in light of local concerns and considerations. That’s important for them,” Manucha told CTV News Edmonton.

“I don’t think we’re ever going to get to a zero-trade-barrier situation, but ... can we get somewhere closer to that?”

With files from CTV News Edmonton’s Nav Sangha and The Canadian Press