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Alberta's bold move a first step toward free trade in Canada

By Keyli Kosiorek

Published in the Edmonton Journal on July 19, 2019. 

The Alberta government made a bold move last week. At the Council of the Federation meeting in Saskatoon, Premier Jason Kenney announced that Alberta would be unilaterally dropping half of its exceptions to the Canadian Free Trade Agreement (CFTA), and committed to reviewing the remaining ones.

Since the initial signing of the CFTA in 2017, provincial and territorial governments have been slow to make meaningful progress to reduce barriers to trade and commerce within Canada.

As currently written, the agreement allows each government to make a list of “exceptions” that excludes sectors, like energy, fisheries and agriculture, from the provisions of the pact, largely for reasons of protecting developing industries. This is a protectionist excuse that has been abused by provinces and territories since the conception of the CFTA. It is these exceptions that undermine the intention of the CFTA and make it nothing more than a piece of rhetoric.

By removing half of its exceptions, all related to procurement, Alberta sends a strong message that it is committed to achieving the goals of the CFTA. The removal of these exceptions also opens Alberta up to more competition, meaning higher-quality and lower-priced goods and services for our province’s taxpayers.

While Alberta has made great strides towards improving free trade and competition through the removal of these exceptions, this is only half the battle. Countless regulatory barriers and irritants still remain in place, especially in areas such as labour mobility, transportation, and construction. Without action, these barriers mean that layers of red tape will continue to cause grief for entrepreneurs, working people, and other Albertans.

Regulatory barriers are an issue of particular importance for Canada’s business community. Today, small businesses are prevented from growing because the taxation rules between provinces are too complicated, the requirements for multiple permits are too costly, and because there are too many conflicting rules and regulations standing in their way.

Survey data from the Canadian Federation of Independent Business shows that 87 per cent of Canada’s entrepreneurs agree that provincial and territorial premiers should commit to reducing barriers to the flow of goods and services.

To become the true economic union that was originally envisioned for Canada at the time of Confederation, the Alberta government, along with all other provinces and territories, must take immediate steps towards removing these long-standing irritants.

How can it be anything but embarrassing for Canada when people and businesses in the European Union can seamlessly transfer goods and services across the borders of their 28 member countries, but it makes national headlines when a Canadian citizen brings a case a beer across provincial borders?

Breaking down interprovincial barriers will benefit all Canadians. A recent report from the International Monetary Fund showed that reducing internal trade barriers for goods has the potential to result in nearly four-per-cent additional GDP growth in Canada, and three-per-cent growth in Alberta.

This would be a huge boost to our economy. For small businesses, this means potential growth and innovation. For everyday Canadians, it means the creation of new jobs and new opportunities.

Fortunately, there is hope. During that meeting in Saskatoon last week, some multilateral movement was made to reduce barriers and streamline rules. All members committed to recognizing professional credentials obtained in other provinces or territories. Additionally, all members agreed to remove a stipulation in the CTFA requiring unanimous approval from member governments when retracting exceptions. While these are positive changes, they are really only drops in the bucket.

To make free trade a top priority, there are three important steps for our country’s elected officials to take next. First, all provincial and territorial governments should follow Alberta’s leadership to review and remove their exceptions. Next, all governments should take more meaningful efforts to reduce regulatory barriers that currently prevent growth and opportunity. Finally, internal trade should become a standing item on the Council of the Federation agenda, and they should report annually on their progress.

It is only once these three steps are taken that the CFTA can become more than just empty rhetoric that disguises protectionism as free trade, and Canada can move closer to becoming a true economic union the founders of our country originally envisioned. Without change, Canadians will continue to miss out.

Keyli Kosiorek is the Alberta policy analyst for the Canadian Federation of Independent Business. Follow her on Twitter @keylikosiorek.

July 19, 2019

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